Just like in any other market, traders who make use of the Gann Trading Technique also have to apply the price patterns as well as the price action in relation to the time factor when they trade in the Forex market. What traders have to determine is the point where the three factors are considered to be in a perfect balance. They may also be able to gain more profit if they are able to confirm their projections by studying carefully the real market conditions that correlation to the patterns that they see on their charts.
Traders may observe that prices of the currencies in the Forex market rise and fall from time to time. The Gann Trading technique suggests that the movements of prices follow a definite pattern which can be determined through the use of this market trend analysis tool. It may be a little difficult for new traders but once they get to learn the basics, they may be gaining more from their Forex trading activities. New traders have to familiarize themselves with the different ways how they can make use of the method appropriately and effectively.
Traders can check the patterns through the swing charts or through the use of the angles that are being formed. The balance points may be determined by squaring the price and the time factors. However, traders will have to take note of the time when there are large movements in the market. People can learn how to use the Gann method by developing their commodity software that show the pattern, the price and the time at the same time.
Next they can build their swing charts in order to determine the trends that show where the market is going. As they analyze their swing charts, they may be able to mark the angles by connecting the tops and the bottoms. These are used to determine if they have market support or market resistance. Using the same data, they can predict the future direction that the prices will be taking given the constant speed as indicated by the angles.
Traders can also identify and plot where the retracement levels are. They can concentrate at the 50% price level since this point may determine whether the market is strong or weak. Price action above this level may indicate a strong market while those that fall below it may show a weak one. A good understanding about the data on the swing charts will be very helpful even to new fibonacci trading who are trying to make their way through the market where they are trading various currencies of the world.