GANN used to trade based on Swing Charts. He described swing charts as the best way of making maximum money from stock markets.

I trade swings that are identified as trading opprotunities in market and for identification of these trades comes from reading swing charts.

[Bear in mind that these articles on this blog are in a particular sequence and aimed at providing basic understanding of stock markets leading to advanced techniques and ability to forecast the markets.

Thus far we have covered basic psychology required for trading (Risk Vs Risky), basic terminology of stock markets (including bar charts), effectiveness of GANN techniques, and importance of using STOP LOSS. Understanding of these basic concepts are crucial for studying the stock markets.

I would recommend you to go through these articles once now (again if you have already gone thru them) to have a better understanding of these basics.

Please write to me at sumit@sumprati.com if you need any further help on topics already covered]

The term Swing has the same meaning as is generally understood. Movement from one position to another or one point to another. We see markets / stocks moving up and down and each such movement may be termed as a SWING.

Gann believed that there are swings in the market and if one studies these swings, then he / she can make lots of money trading stock and commodities. Gann did!

According to him these swings are caused due to law of vibrations. If you look at a pendulum, it swings from one end to another. The principles of law of vibrations are used in the pendulum clocks. I am no scientist or technical person (at least as far as clocks are concerned) but know this from Gann’s study.

Our aim in trading is to identify a swing before it starts and take maximum advantage of the swing. How we can identify a swing before it starts? For this, we will presume that history repeats. so, once we see a swing in the market, we will presume that the same swing shall be repeated again.

For calculating the value of a swing, we need to learn how to prepare a Swing chart. I will cover construction of a swing chart in the later articles. Here I will cover only some of the basic terms that are required to understand construction of Swing charts.

We first need to learn what a bar chart is and how it is constructed. We then need to learn the terms UP DAY and LOW DAY.

In the bar chart pic given below, note the HIGH and LOW of the day.

Bar Chart pic



The difference between HIGH and LOW is called the Range of this bar. The bar can be for any period day, week, or month.

In next article, I will cover the terms UP day, LOW day and construction of a