Table of Content

28 Golden Rules of W.D. Gann for Trading

Read the markets correctly and make profitable trades with the 28 Golden Trading Rules from the master of the investment world, William Delbert Gann.


William Delbert Gann embraces the philosophy that “Nothing can be obtained without a cost. Whatever you desire, be it money, time, or knowledge, you must pay for it”, as the main key to success. In addition to his methods, he has also explored the psychological dynamics behind people’s behavior in the market. Gann observed that individuals often buy at low prices and sell at high prices in financial markets such as stocks and commodities. As a solution to this, he attempted to teach people entry and exit timing in the market through disciplined and systematic approaches. Gann’s views and methodology focus not only on the technical aspect of trading but also on understanding the impact of human behavior on markets. Now, let’s take a closer look at these concepts:

28 Golden Trading Rules from the perspective of W.D.Gann

1. Divide your capital into 10 equal parts and never risk more than 10% of your capital in a single day.

2. Always set a stop-loss level.

3. Never overtrade. This would be violating your capital rules.

4. Absolutely avoid turning profits into losses.

5. Stay away from the market when you’re unsure about the direction and strength of the trend.

6. Close your position immediately in case of losses and do not add more capital in a losing situation.

7. Trade in active markets and stocks.

8. Distribute your risk equally across markets and stocks. Trade in two or three different commodities, if possible. Avoid tying up all your capital in any one commodity

9. Do not close your position without a valid reason.

10. Keep your gains in a separate account.

11. Never aim to make a profit out of excessive greed.

12. Do not exit a position due to distractions or enter a position out of boredom.

13. Prefer selling over buying.

14. Avoid cutting costs excessively.

15. Don’t let small gains result in significant losses.

16. Maintain your stop-loss level after taking a position.

17. Avoid frequent trading.

18. Aim to profit in both directions.

19. Never trade stocks solely based on their expensive or cheap prices.

20. Don’t hesitate to slowly buy a stock that breaks resistance levels and zones.

21. Gradually acquire stocks in a strong trend.

22. Do not change positions without a good reason.

23. Do not attempt to rescue a losing position; cut the loss.

24. Avoid trading immediately after significant gains or losses.

25. Don’t chase peaks and bottoms.

26. Do not fall for advice from individuals you don’t trust.

27. Reduce your position after the first loss; never increase it.

28. Do not enter or exit the market at the wrong time; or exit at the wrong time after entering at the right time. This mistake leads to doubling down.

These 28 rules are the fundamental principles to bear in mind while engaging in trading. Whenever we decide to make a trade, we must ensure that we do not violate W.D. Gann’s 28 golden rules. This will make us more successful and experienced traders in the financial markets. Everyone can make mistakes, but what matters is learning from our mistakes. If you close a trade at a loss, review these rules and determine which one you violated, so that you can avoid repeating the same error. While crafting your trading strategies, these 28 rules guide you on the path to success, solidify your trading discipline, and improve your risk management. Understanding human psychology is one of the essential sciences that must be learned. Grasping the essence of human nature provides a valuable insight into knowing when the majority will throw in the towel. Through Gann’s adopted approaches and methods, he enabled market investors to engage in secure and timely purchases, rather than trading based on hope and fear.

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