| Vol. 1, No. 9 |
August 6, 2002
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[The following is a reprint of an article in 'The W. D. Gann Technical Review', written by Billy Jones in July 1982.]
FINDING A PLAN THAT WORKS
Trading commodities and stocks is like any other business you may decide to undertake. To become successful at it you must have a good plan and most important of all, be able to follow it.
All of us know this, yet we tend to stray away from our guidelines which dooms the intended outcome to failure.
We tend to look the world over in search of the perfect trading system, then after finding a plan that works, fail to follow the rules that make the plan work. The reaction to this is to blame the plan or system.
Human nature, being what it is, works in strange ways. One of these is the fact that we can see the faults or mistakes of others and are blind to the same events in our self.
It is much easier to find fault in the system or indicators we are using than to admit that failure was due to a mistake on our won part.
Experience is gained from the mistakes and blunders we make. If you have the tendency to blot them from your mind, you'll commit the same mistake over and over.
Start right now and treat your trading like a successful business. Keep books on your trading. Have a reason for everything you do in the market. When you are wrong, admit it and correct it. Keep track of your mistakes. Recognize them and you won't make the same mistake again.
I am aware of the fact that this subject is one most of you have heard before and consider it a moot point. Like most, you'd rather hear of some exciting way to determine market tops and bottoms, and needless to say, I'd rather write about technical aspects.
At some point in the future, these markets are going to start moving higher. They always have and they always will.
When they do and you have entered the markets you trade, keep track of everything you do and why you did it. If you do something wrong or make a mistake, figure out what you did wrong and make a point not to do it again.
Use W. D. Gann's methods of trading by entering the market when your proven system gives you a signal. Place your stops and stay with your trade until you have good reason to get out. The fact you have made a small profit doesn't mean to get out.
How many times have you got out of a trade only to turn around and get back in?
Remember reactions are normal in a bull market just as rallies are normal in a bear market.
Staying with the long haul and adding to a position is one of the hardest things to do because human nature tells us to take profits no matter how small.
Traders who manage to trade long term, building their positions and not worrying about intermediate reactions are few and far between.
How many times have you looked back at a previous bull market on your charts and noted the ease with which you could have traded it, adding to your position and selling out near the top and thought how simple this would be to do?
How many times have you charted a market on a day to day or weekly basis without actually trading it but making decisions just the same as if you were actually buying and selling?
Again, you've noted how easy it was to make correct decisions - and money.
Then you actually put up the money in your account and enter the market only to make mistakes in judgement you never realized possible.
It may be that you need to approach your trading differently if these problems persist in your trading.
You may have to enter the market with the plan in mind to stay away from price quotes on the commodity or stock you are trading, or at least to not keep up with the markets so closely.
Place your trades in advance including stops and leave the tickers, quote machines and brokers alone. If you are wrong you get stopped out. If you are correct in your analysis of the trade, your profits will take care of themselves.
Orders can be placed to handle everything.
Remember one thing - you are usually right in your long term analysis of the market. It is short term movements that cause you to run from a trade.
If you are not there you can't run.
After you see results of this long term trading you'll never trade short term again.
You will end up actually making fewer trades in a year's time which will be more profitable.
As I said earlier, we are always going to have bull markets and bear markets. They always come no matter how difficult things look at present.
When they do come, be ready for them just as Gann was. The methods that worked in the past will work just as well in the future. Be prepared for them by making the necessary changes in your plan and in your mind that prepare for success.
In W. D. Gann's book, "How to Make Profits in Commodities", is a section that requires reading occasionally (Pages 1 through 20.).
Actually, reading through the course [the W. D. Gann Commodities Course and/or the W. D. Gann Stock Market Course available from www.wdgann.com ] occasionally is a great help as it seems something new is picked up each time.
The Gann chart pictured this month explains itself. It is the trend line indicator with Gann's notations on how it should be traded. This is a very long chart and only a small portion is printed. This is one of the more interesting charts in his collection.
[Unfortunately, the quality of the reproduced chart is not good. The original chart is one of the many original charts hand drawn by W. D. Gann that will be on display at the next W. D. Gann Experience.
For more information on how to prepare your all-important trading plan, please see 'Development of a Market Master - Part IV, under 'Articles' at www.lambertganneducators.com ]
DISCLAIMER:
Every effort has been made to ensure that the content and conclusions presented in The New W. D. Gann Technical Review are complete and accurate.
No part of The New W. D. Gann Technical Review contains trading advice - stated or implied, nor is an invitation to trade. The directors and associates of Lambert-Gann Educators, Inc. are NOT licensed trading or investment advisors. Lambert-Gann Educators, Inc. is an organization designed to assist traders and investors to become more knowledgeable and independent.
The giving of advice is therefore contrary to the very objectives of Lambert-Gann Educators, Inc.
Traders requiring trading or investment advice should contact a licensed advisor.
Stockbrokers and futures brokers are licensed advisors.
Neither Lambert-Gann Educators, Inc., nor anyone else involved in the production of The New W. D. Gann Technical Review, will be liable for any liability, loss or damage directly or indirectly caused, or believed to be caused, by The New W. D. Gann Technical Review.
Traders, to be successful, must take full responsibility for their own actions.
With respect to trading results, past performance is not necessarily an indication of future performance.
By maintaining your subscription to The New W. D. Gann Technical Review, you acknowledge that you understand and accept the contents of this disclaimer.
Lambert-Gann Educators, Inc.
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Copyright © 2002, by Lambert-Gann Educators, Inc. All rights reserved.
All of Mr. Gann's books and courses are available from the Lambert-Gann Publishing, Inc.
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