Gann 3 Day Swing Chart

[Twyla Plack]

TheGann Swing Chart moves to the high for the period on an up bar and keeps moving higher until a reversal is recorded. A reversal would come in the form of a down bar (or an outside bar). On a three bar swing count, a down-swing will be displayed following three consecutive lower bars. It will only be reversed after three consecutive up bars.

Copy Data to Clipboard: Copies the raw data values from the Gann Swing Chart to your clipboard, which can then be used in other programs (such as Notepad, MS Excel, etc). Note that the values copied will be in the timeframe of the chart, so a weekly chart will copy weekly values.

Restore Default Settings: Click this action if you have adjusted the default settings of the Gann Swing Chart, and wish to return to the standard properties originally installed with Optuma.

Relative Index: Use this option to create a relative strength chart. Type the symbol of the index or other security, eg SPX from World Indices to see the chart relative to the S&P500 index.

Date Range: This setting allows you to choose how much historical data is displayed on the chart. By default, all data contained in the data file is displayed but this option can be used to limit the amount of data in the chart, eg Last 10 Years, or from a user-defined date or range of dates.

Default Price Unit: Used to set the Price Unit various Gann-based tools will use by default when applied to the selected chart. For example, setting the Default Price Unit to 0.01 will set any Gann Fan applied to the chart to use 0.01 as its price unit. For more information on the Price Unit, please see here.

Show Single Session - For codes containing two sessions in a single day (e.g. Session 1 = Day, Session 2 = Night). Ticking this checkbox will allow you to view only one of those sessions on the chart, with data from the other session being hidden from view. Requires a real-time datafeed.

Swing Count: Sets how many time periods (bars) must take place in the same direction for the swing to turn. For example, if set to three there would need to be three successive higher bars before a down swing would turn up.

Blank Bars: The number of blank bars to the right of the current price action. After the last bar, there will be an area of blank charting space used for plotting tools and indicators into the future. Increasing this value will increase the amount of blank space.

Text Angle: If the Show Labels option has been enabled then the Text Angle property allows you to change how they are displayed - either horizontal (0 degrees) or vertical (90 degrees).

Tool Transparency: This slider bar is used to adjust the transparency of the chart itself. Moving the slider to the left will increase the transparency of the chart. Moving the slider to the right will increase the opacity of the chart.

As I undestand it, Optuma currently includes a swing high and a swing low on the oustide bar which results inthe swing chart cutting across from the low (or high) of the neighbouring bar rather than extending down (or up) to the bottom (or top) of the outside bar - see screenshot 1 attached.

In the first highlighted area in screenshot 1, the subsequent bar is lower, so the swing should have carried on across the top of the outside bar and then swung down to the lower bar ultimately ending up at the 1826 level.

The second highlighted area is a little trickier as there is an outside, an inside, another outside before a lower bar forms, confirming the previously established turn down from the lower bar prior to the cluster of outsides and insides. Heere the swing should have started at 2342 and swung down to 2004 in one swing, not two.

Screenshots 2 and 3 show another, clearer example with the swing as drawn by Optuma and with how I would draw it by hand shown by the changes in yellow. The settings for the swing chart are: 1 bar, Use Next Bar, Cluster=False, Use Breakout=False.

One of the core principles of technical analysis is that prices move in trends. Subsequently, the goal of technical analysts is to identify the trend in its very early stages of development. While experienced traders may nod their head in agreement, often beginners face difficulties identifying the trend on the price chart. Lack of experience and practice is to blame, of course. Trend is identified once the turning points of the market are spotted. The technique of spotting the tops and the bottoms on the chart is not clear to everyone and the procedure can become an unpleasant process of trial and error for newbies.

William Delbert Gann is considered by some to be one of the greatest traders of stocks and commodities of all time. He correctly forecasted that the 1909 September wheat price would reach $1.20, Black Friday of 1929 and the 1930s Great Depression, just to name a few of his calls.

Gann was fond of mathematics and as a result he spent many years studying the subject in England, India and Egypt. He believed that the markets follow the laws of mathematics and that there is a relationship between price and time. He later formulated his theory into what is known as the squaring of price and time. Even though he went on to develop many complicated concepts and theories, the Gann Swing Charts remains perhaps one of the easiest to understand.

Many find trading the Gann Swing Charts easier as the entry and the stop loss are clearly identified on the price chart. The potential profit levels can be spotted using different theories. You can use the Fibonacci price extension levels (for example, 1.618, 2.618 and 4.236), altering the Fibonacci levels according to your trading profile.

Additionally, one may choose to keep a trade open, trailing the stop loss at subsequent swings until a swing in the opposite direction is identified. This is common practice in trading the financial markets. Caution should be taken; while the trailing stop may safeguard potential profits, at the same time it may prematurely exit a profitable trade.

On the other hand, keeping a fixed stop loss expecting a swing in the opposite direction to book potential profits may result in more profits, but equally it might turn a winning trade into a losing one. The choice is yours!

Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

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Analysing price action from chart patterns could be a difficult task. Spotting trends early on as they develop takes experience. Moreover, this analysis is subjective. Not all traders have the same technique to identify trends, leading to inconsistent decisions. This is where swing charts can help.

Swing charts remove unnecessary noise from price charts, so that the interpretation of price action becomes easier. Trends can be spotted by looking for progressively higher highs or lower lows. By using them with other technical indicators, traders can make decisions regarding stop-loss and take-profit points. One of the earliest swing chart strategies was created by William Delbert Gann, a renowned 20th century market theorist.

A trend line indicator moves from highs to highs on each up day in an uptrend, until a reversal occurs. When that happens, it would qualify as a down day or an outside day. The trend line has to move in 3 up days consecutively, to qualify for an uptrend. Similarly, in a down trend the trend line moves from lowest lows of one down day to the next. This happens until an up day or an outside day happens.

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