Ask Colin

You say your are not a fan of Fibonacci. What are your thoughts on Gann?

You say your not a fan of Fibonacci. What are your thoughts on Gann? What doesn't appeal to me is that they create expectation levels, whichmay not be met.I feel because of this if they were used it may bring irrational thinking into chart interpretation & hence distort objectivity.

The reason I do not like to use Fibonacci and Gann methods that try to predict market turns is, as you say, because they interfere with our ability to see the chart objectively. There is a great danger that we trade towards these levels, maybe hanging in too long after a top is made or holding off too long after a bottom has been made. They are a particular danger if we have used them to make predictions to other people, because it introduces pressure on our ego.

However, this does not apply to everything Gann wrote. Much of it is sound trading common sense. Also his swing charts are a valid method for representing the underlying trend in price action.

My problem is only with methods that impose an internal order to the markets. I personally find that the disadvantages outweigh the advantages. However, I do recognise that it is possible to trade them profitably. In saying this, I am recognising that a good trader can probably trade any method.

Keywords: