William Gann's trading rules

The page is a day late this week because I wanted to dig out and write down for you (paraphrased) William Gann's 24 rules for trading from his 1930 classic"The Wall Street Stock Selector". Run (don't just walk) to Amazon or Barnes & Noble and buy this book if you don't have it!

Never risk more than 1/10th of your capital in one speculation. (*)

Use Stop Loss orders

Don't overtrade.(*)

Never let a profit run to a loss.

Don't buck the trend.

When in doubt, get out.

Trade only in active stocks. (*)

Spread risk among 4-5 issues - not just one.

Never fix your price, trade at market. (*)

Don't close positions without a good reason.

Build an emergency fund.

Never buy to get a dividend.

Never average a loss.

Never get out because you've lost patience with a position.

Avoid taking small profits and big losses.

Never cancel a stop order once you make a trade.

Avoid getting in and out too often.

Be just as willing to go short as long.

Never buy because a price is low, or sell because a price is high.

Be careful about pyramiding at the wrong time.

Select stocks with a small volume of shares outstanding to pyramid on the buying side, and the ones with the largest volume of stock outstanding to sell short.

Never Hedge. Get out instead.

Never change a position without a good reason.

Avoid increasing your trading after a period of good trades.

(*) These are areas where I have violated Gann's rules and have lost money as a result.

Good Trades be


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