📖William Gann

Percentage Retracements

🌿 Intermediate★★★★☆

Markets retrace 50%, 33%, or 25% before continuing trends. Gann found these mathematical ratios consistently attracted price action Look for buying opportunities at 50% retracements in uptrends Natural retracement levels provide reliable entry points in trends Key insight: After a significant move, markets typically retrace a predictable percentage before resuming the original trend. Start with a minimal checklist: Is my stop-loss in place?; Will I honor it when hit?; Is my capital protected?. A process is like a pilot checklist: discipline prevents simple mistakes when pressure rises and keeps outcomes more repeatable.

  • Is my stop-loss in place?
  • Will I honor it when hit?
  • Is my capital protected?
  • Always use stop-loss orders

Avoid misuse: Having opinions without execution criteria

💬

Markets typically retrace 50%, 33%, or 25% of a move before continuing. The 50% retracement is the most important level for support and resistance.

— 45 Years in Wall Street，1949

🏠 Everyday Analogy

A process is like a pilot checklist: discipline prevents simple mistakes when pressure rises and keeps outcomes more repeatable.

📖 Core Interpretation

Natural retracement levels provide reliable entry points in trends
💎 Key Insight：After a significant move, markets typically retrace a predictable percentage before resuming the original trend. The 50% retracement is most common and powerful, followed by 33% and 25%. These levels represent natural profit-taking and re-entry zones. Traders use these retracements to identify low-risk entry points in the direction of the main trend.

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❓ Why It Matters

Gann found these mathematical ratios consistently attracted price action

🎯 How to Practice

Look for buying opportunities at 50% retracements in uptrends

🎙️ Master's Voice

Use stop-loss orders to protect your capital. This is the most important rule.
Gann repeated this rule constantly because it is the most important. Stops protect you from catastrophic loss. Without them, one bad trade can destroy years of gains.

⚔️ Practical Guide

✅ Decision Checklist

  • Is my stop-loss in place?
  • Will I honor it when hit?
  • Is my capital protected?

📋 Action Steps

  1. Always use stop-loss orders
  2. Place stops immediately after entry
  3. Never trade without protection

🚨 Warning Signs

  • Trading without stops
  • Removing stops during trades
  • Ignoring stop-loss discipline

⚠️ Common Pitfalls

✕Having opinions without execution criteria
✕Reviewing outcomes but not decisions
✕Abandoning rules during volatility spikes

📚 Case Studies

1
Dow Jones Crash and Gann Retracements (1929)
After the 1929 peak near 381, the Dow plunged and later retraced key Gann levels, notably around the 50% and 62.5% zones, signaling potential resistance and trading opportunities for disciplined followers of percentage retracement rules.
✨ Outcome：Traders using Gann retracements managed risk, capturing partial rebounds while avoiding full re-entry before a durable long-term bottom.
2
Post‑Crisis S&P 500 Bottom and Recovery (2009)
Following the 2007–2009 bear market, the S&P 500 bottomed near 666, then advanced and repeatedly respected Gann-type retracements around 33%, 50%, and 62.5% during the early recovery phase, offering structured buy‑the‑dip entries for systematic traders.
✨ Outcome：Investors applying Gann percentage retracements scaled into the new bull market with defined risk, improving entry prices versus chasing breakouts.

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