You make money on the stock market by buying low and selling high. This is often difficult, as you may believe that a stock will keep rising and you don’t want to miss out on more profit.
However, remember the diversification rules: do not have more than 5% of your capital in one stock and keep to the criteria you set for stocks. If a stock at the 5% limit suddenly starts moving up strongly, you should sell a number of shares to keep the position within the maximum limit.
Successful and disciplined investors who employ stock-picking systems portrayed on this platform typically require two factors before they sell a position.
Following only the first rule is prudent, but can create a situation where one sells a stock too early, just when it finally starts a strong upward move. To solve this problem, we can employ a simple price rule devised by stock operator William D. Gann in the 1930s.
Gann found that stocks that are in a strong position and show a good up trend seldom ever react into the third month.
The past two months consecutively closed lower than the previous month and the daily closing price (anytime during the third month) breaks below the previous month low price
The third consecutive month closes negative again
To make life easier for platform users, our system calculates this Gann rule too and displays the status for each monitored stock daily by green (rule not violated) or red (Gann’s selling rule has been triggered) dots.