In trading, it’s easy to become overwhelmed by the sheer number of markets, time frames, techniques and strategies that we have available to us. The first thing to acknowledge is that you will NEVER be able to incorporate all of them into your trading plan, so relax! The second thing to acknowledge is that we didn’t get into trading to become the smartest or most knowledgeable or most technically advanced traders in the world, or to have the most complicated and clever systems – we got into trading to make money. When you shift your focus away from the vast, overwhelming number of choices, and onto the task of making money, you can develop some simple, easy to implement strategies for trading profitably in the market.

In this article, I want to use an example on a stock that we have followed on and off in our coaching programs over the last couple of years called Wisetech Global (WTC.ASX). I have been calling this market up ever since the middle of last year and it hasn’t disappointed, with some terrific bull runs over the last 12 months. Using Wisetech as an example, I will show you how to build a very simple strategy that you can use on any market, on any timeframe moving forward.

We will begin with WD Gann’s 50% rule. Gann says on page 36 of How to Make Profits in Commodities that “you can make a fortune trading this one rule alone.” In Chart 1 below, you can see the 50% retracement into the June, 2022 low.

Chart 1 – 50% Retracement

Now some people point to a chart like this and say “see, Gann works!”. Other people will go and find another example where the 50% retracement did NOT hold up the market and they will say “see, Gann DOESN’T work!”. For me, I agree with Gann – if you just focused on 50% retracements, and only took trades with a high Reward to Risk Ratio, you could do quite well! However, I would add the phrase “and built your trades around these 50% levels” to Gann’s work. That’s the trick – you’re not JUST trading on the 50% alone – you are BUILDING your trading around that 50% milestone! If there is no trade, then in most cases there will be no signal to trade, and you will let that one go.

Let’s continue building around this setup on Wisetech. As many of you would be remember, there was a repeating 100% monthly swing range into this 50% retracement. This is shown in Chart 2 below.

Chart 2 – 100% Repeating Monthly Range

Can you see how it’s not just a 50% retracement – there is more harmony there? There is a third piece of price harmony around that low, but I will let you discover that for yourself.

Really, at this point in time, you have enough to make a trading decision. Either this setup will hold, and you will have a trade with a high potential Reward to Risk Ratio, or the level will be broken and you will lose one unit of risk if you chose to enter the trade. You have a simple system to work with, and you can apply that to as many markets as you care to follow. You might even like to pause your reading of this article for a moment to look for similar setups on some of the markets that you are following. You might like to try one of the big four banks. Which bank? Well, I’ll leave that up to you. (There’s a clue there for our older readers like me!).

Back to Wisetech, let’s now add in a simple timing element. The market touched the 100% milestone on the monthly chart on June 17, and made a higher daily swing bottom on June 22. This time in the market should be INSTANTLY recognizable as one of Gann’s key Seasonal Dates. You wouldn’t just trade on the date alone, but you would be looking for potential turns. Not just a daily swing turn, but a turn lasting perhaps six weeks or more. This seasonal date becomes an extra piece in the puzzle. And if you look back over the previous 12 months, you will notice major turns at all of the 90-degree points. While this doesn’t guarantee that our date will work, it is good confirmation that we are in tune with the rhythm or vibration of the market, and that our setup is unfolding at a good time in the market.

We could continue on with our analysis, looking at time counts, angles, squares, fourth dimension, boxing the market, square of 9 and all sorts of techniques, however at this point, we have a reliable setup, and it is occurring around a time vibration in the market that has been calling major turns. And that, my friends, is what I call a ‘Simple Strategy’. Start with your Ranges, and slowly add techniques to build your understanding of what the market is doing.

Take it from someone who has bought more trading books and courses than most – sometimes, less analysis is more!

Wisetech is continuing to run up as I write this on 14 June. Since it is up at an All-Time High, there is no way that we can use a 50% retracement for the foreseeable future. However, we can use our ABC Milestones on some of the larger ranges, and I would encourage you to do this. Then, I would encourage you to ask the question: WHEN is the market turning each month? We’ll be discussing that question, and a whole lot more, in our upcoming Trading With Time series beginning next month. See you there!

Keep it simple!

Mat