will feel in control. Your losses will not paralyse you. You willhave insight into both profits and losses and, to paraphase Kipling, you will treat those two12
Introduction
imposters the same (no, not really, but you will at least be sanguine about losses).No doubt there are a few canny investors who are able to trade swings based purely on theirreading of the mood of the market, but it is a rare (and, I suspect, transient) skill. Sentimentindicators are successfully based on the very idea that the majority are overly bullish at the highsand overly bearish at the lows.My approach to swing trading is purely as a chartist. When you use a chart at least you get tosee a picture which sums up the judgments, beliefs and expectations of all the marketparticipants. It seems to me that not to use a chart is deliberately to give up a useful piece ofinformation.Of course, since I read and view the financial news, I can hardly avoid having an opinion on thepresent and future state of the economy, but I try to suppress these opinions. Analysing swingcharts, point & figure charts and using the tools I enlarge upon in this book means that you neednever take any meaningful account of fundamental information again. Your value judgmentswill be a backdrop to your trading, but they will not mislead you in the way that they so oftendo. Of course if you prefer to use fundamental information in addition to charts, that is a matterfor you.
The logic underlying the use of chartsHere I intend to be brief. My publisher has rightly told me not to bore readers by indulging inlengthy academic discussion, and defending the use of charts is something that has come toexhaust me. Too many people, including some very bright friends of mine, have an obduratevisceral response to charts. I am convinced it is because they elect not to think in this respect.Perhaps their minds close because they fail to realise just how limited and modest are the claimsof the thinking chartist. For example:• All chartists accept that the chart describes past price action, the relevance ofwhich may yield to future events.• No-one sensible suggests that charts foretell the future. The chartist accepts thislimitation, but since second sight is not yet commercially available, there are nottoo many alternatives.• When an unforeseeable event occurs, it was not ‘foreseen’ in any way by thechart. It is pure coincidence if a disastrous event occurs in the middle of a bearmarket.• Point & figure charts and swing charts do not predict what will happen to theshare price. They merely portray an imbalance of supply and demand which it isassumed is likely to continue until a new balance is found.13
Marc Rivalland on Swing Trading
• Charts do not work because a pattern which occurred in the past is occurringagain. That is just the sort of nonsense that makes people dubious about charting.It has nothing to do with history repeating itself. How could it? Everyone knowshistory does not replicate itself exactly (same demographics, same climate, sameproduct, same demand, same supply). Broad themes may repeat themselves, butthat’s about it.A chart is simply a pictorial representation of the forces of supply and demand. Thoseforces are not static. What makes share prices move? It is disequilibrium. If there were exactequilibrium between buyers and sellers of a share, the price would stand still.Of course exact equilibrium is of no interest. It is periods of broad equilibrium which are mostrevealing. When buyers step in to reverse a fall in price, one can infer that the dominating viewof the market is that the shares are cheap at that point. When sellers or buyers dominaterepeatedly at the same level, a relevant inference may be drawn. The battle lines between theforces of supply and demand emerge. When one side is overwhelmed, you will see it in thechart. Join the winners.Naturally future events are going to have an impact upon the share price. But the process offinding a new equilibrium, either higher or lower, tends to be an evolving one. Take a look, forexample, at Investors Chronicle. Each week it publishes the views of various brokers andinvestment houses on a particular share. Usually three different views are given. Quite often theviews cover the entire spectrum. One brokers says buy, the other broker says hold, and the thirdsays sell. What do you think happens when the price starts going up? The clients and/orfollowers of the broker who said buy are filled with confidence, and may buy more. The clientsand/or followers of the broker who said sell are filled with doubt. If they are short they may lookto cover. If they are not short or if they are underweight they may look to re-balance theirportfolios. The pressure to do so grows as the price advances. And so it is seen that apart fromshock announcements, prices adjust by a process of evolution, not by step-change.It is that evolutionary process which the chartist is relying upon when he acts on a buy or sellsignal. He trusts the forces of demand (or supply) which have just won a battle to keep winningbattles until the market arrives at a new consensus about the value of a share.Of course sometimes when one has drawn a proper inference from a bullish looking chart, andbought the share, a future event such as a profit warning will happen that will crush the shareprice. That doesn't mean that the chart is useless or invalid. The chart is bound to produce somelosses. What one is trying to do with the chart is to improve one's chances by drawing the bestinference that one can about likely future price movement from an impeccable (but notclairvoyant) source - the current picture of supply and demand.
14
2
SWING TRADING INPRACTICE• Selling short• Normal service• Linear phases and how to spot them• My approach• The tooled-up swing trader
15
Marc Rivalland on Swing Trading
Selling shortIt is a fundamental part of swing trading to sell short. Whereas the buy and hold investor purseshis lips when prices start to fall, it’s a matter of jubilation for swing traders. Why jubilation?Because the market is at its easiest when prices fall. A.W. Cohen, father of point & figurecharting, calculated that prices fall almost twice as fast as they rise. It is surely within everyone’sexperience that prices fall much faster than they rise. You can see it in almost every chart youlook at. Prices rise in a measured, steady fashion, then there is a bout of hesitancy, or perhaps apiece of bad news which causes the market to sell off, then the market regroups and advancescautiously. Occasionally there are bursts of irrational exuberance. By contrast when prices fall,it’s one way traffic. Institutions (and no doubt other traders and investors) head for the exits.There is little hesitancy. Self-preservation is the keynote.Recently I was stunned to receive an e-mail by way of feedback from a speech I had made. Thedelegate said that I had “given him the courage to go short”. Good grief. I hope he was young,otherwise life has passed him by. If you think my enthusiasm for selling short is a product of themarket’s behaviour over the past 2 years, you’re mistaken. The bear market in 1994 and theshort-term downtrends in 1997 and 1998 are great examples of the money-making opportunitiesprovided by a falling market.Selling short is always talked about in the press as something wild and dangerous to do. And thepress like to portray it as faintly scandalous to sell something that you don’t own. I’ve neverquite understood that, probably because my second job was in the commodity markets. Sellinga contract was merely the making of a promise to deliver a commodity whilst buying a contractwas merely a promise to accept delivery of a commodity. These delivery-related promises hadnothing of the flavour of the anti-social that one might sell something that one doesn’t own.Selling short is not dangerous, except in certain limited respects. For example, in commodities,a weather-related crisis may cause orange juice futures or coffee futures to lock limit up fordays. Answer: don’t short commodities. Let someone else make money that way.As for shorting equity indices, I perceive virtually no intrinsic danger at all. One’s potentiallosses seem no greater than being long the market. If anything, the nasty surprises one gets whenone wakes up in the morning to find that the market will open more than 150 points away fromthe prior close are predominantly associated with falls in the market. Other than the surpriseelection victory by John Major in 1992, I can’t remember when the FTSE last opened up bymore than 200 points. So much for the dangers of selling short.As regards individual equities, the principal danger is shorting a stock that turns out to have anastonishingly good profit report, or worse yet a stock that is subject to a takeover bid. For themost part, one can avoid such stocks.There are two perceived drawbacks to selling short. I regard one as unrealistic and the other asa virtue, not a drawback.16
Swing Trading in Practice
Perceived drawbacks to selling short
1. It is said that you can only lose 100% of your capital by going long, but you can lose morethan 100% of your capital by going short (not counting the effect of leverage). The idea of losingmore than 100% of your capital is hopelessly unreal. It assumes that the market or the securityof which you’re short will more than double without your having taken any protective orremedial action. It can happen in tiny stocks which are subject to a takeover, but you steer clearof those. You can only lose more than 100% of your capital by self-immolation. Of course ifyou’re over-leveraged, it’s less difficult to lose more than 100%, but whose fault is that?2. Many investors buy a stock hoping for an upswing. When that hope is not realised, the stockbecomes a long-term investment, which is doublespeak for their unwillingness to take a loss.Playing the market from the long side means you can fudge your errors. But because a stockmight indeed rise over 100% over time, a short seller has to take his losses at some point. Thisis desirable. It represents discipline. You are forced to recognise your mistakes.I suppose it is possible to swing trade from the long side only, but it would be an arrant wasteof opportunity. In the United Kingdom, establishing a short position is now easy through themedium of contracts for difference (CFDs), and spread betting, which I touch on below.
Normal serviceIn one sense chart-based swing trading is a trend following method in that the really substantialprofits are made when the market is trending up or down. But in principle there is no reason whyswing trading would not be successful in a market that is in a sideways range provided that thesideways range had a significant distance between its highs and its lows, enough distance for theswing trader to make money. That was the case in early 2000. Of course when the market is ina tight trading range, it is difficult for the swing trader to make any real money. That was thecase in late 2000 and the first 4 months of 2002.It is true that for a large proportion of the time, the swing trader makes money only to give itback on the next swing trade. It would be too easy were it not so. The swing trader tries to grindout a series of small profits and losses, all the time preserving his capital, waiting for a substantialswing or a linear phase to unfold when a succession of winners can be put together. To my mind,if one had to draw a graph of the swing trader’s capital it would not remotely resemble thestraight line graph of 45° which one sometimes sees in cartoons. Instead it would resemble astaircase with a long tread. For extended periods the swing trader makes little or no money butthat counts as success because he is preserving his firepower for when it really matters.Beginners to swing trading often don’t realise this point. They bemoan their lack of sustainedsuccess, and often, I suspect, try to break out of a rut by taking extra, unjustified risks. Patienceis not only a virtue, but a necessity, and a difficult one to master in swing trading.
17
Marc Rivalland on Swing Trading
Linear phases and how to spot themFirst I should explain what I mean by ‘linear phase’. Go back to the chart of the FTSE in theyear 2000 on page 8. You’ll see 2 phases in the first 3 months of the year when prices movedbroadly in a straight line. There was very little sideways movement. The angles of descent andof ascent were steep. Those were obvious linear phases. Linear phases don’t always havestraight line movement all the time. There may be periods when the market is rising or fallingin a typical wave pattern. But linear phases involve substantial changes in price over severalweeks or months, during part of which time the price movement resembles, broadly speaking,a straight line.I am not sure it is possible to know in advance that a linear phase is about to happen. If it were,one could sit out the difficult phases and wait solely for the substantial swings and linear phases.But in Chapter 5, I describe various ways of improving one’s chances of identifying and tradingpotential linear phases. It doesn’t always work, but I regard the results as pretty good overall.One thing it is possible to detect is when one is the middle of a linear phase. Many of thesephases are connected with a theme or a crisis. So in the first 6 weeks of 2000 what was forcingthe FTSE down was the wholesale dumping of old economy stocks and, in particular, banks inorder that institutions could scramble into high tech. In 1997 the linear phase was connected tothe melt down in Asia. In 1998 it was the Russian debt default and Long Term CapitalManagement.What will happen in a linear phase is that everything will point in the same direction: The point& figure charts, the bar chart, the swing chart, the moving averages, but more than that thegradient of the incline or decline will steepen materially at some point. Countertrend rallies/dipswill fall well short of the previous swing high/low. Volume will pick up as institutional swingtraders and hedge funds place big bets.It is at this point that the swing trader is justified in taking bigger risks. There is usually asuitable correction or countertrend swing which enables you to get on board the linear phasewith a large position. But sometimes that doesn’t happen. In the brief linear phase inMarch/April 2000 the FTSE soared nearly 800 points in just over 5 weeks without any realcorrection. There was no real bout of profit-taking, no mini-downswing which could be used totake advantage of the linear phase. It was not difficult to make a profit, but it wasn’t a pleasinglylarge one.It is the aim of this book to provide a method for any trader, even a novice,a. to preserve his capital rather than to squander itb. to increase his capital modestly during non-linear phasesc. to make a killing during linear phases
18
Swing Trading in Practice
My approachI prefer equity index futures to individual equities
I was called to the Bar by the Middle Temple in July 1987. Naturally, because I was so often incourt, I could only speculate on a part-time basis. I was a full-time chartist, keeping a series ofbar charts and point & figure charts, but my trading opportunities had to be tailored to myworking commitments.Moreover, I needed a method which had a mechanical component to it. That drew me to swingcharts. And I needed a market which would take stop orders including OCO (‘one cancels theother’) orders so that orders would get executed automatically whilst I was on my feet crossexamining. At the time the US treasury bond futures market was the dominant market in theworld, so that is what I started off with. Later I moved on to equity index futures and options.That was also suitable. I could go off to court without having to worry about a profit warning orany specific company risk.I am still primarily a speculator in equity index futures and options. I prefer to avoid specificcompany risk, and index trading allows me to do that. When an investment bank issues a buy orsell note on a particular stock or group of stocks, it does affect the index, but not by much. Butif you have a position in an individual stock, a buy or sell note, particularly one that makesstartling claims or forecasts, can dramatically affect your position. The split in my speculationbetween equity index futures/options and individual equities is of the order of 85-15, althoughthe individual equity side is growing slowly.I seldom look at any stocks outside the biggest 50 or so companies, for 3 reasons:1. When trading from the long side, there should be little solvency risk with the biggestcompanies. Companies like Marconi, Enron and Tyco have rather upset this notion, but I dothink it holds true generally. When trading from the short side, there is little risk of a hostiletakeover bid for such big companies. For trading purposes, the potential for unpleasantsurprises is therefore minimised.2. The volume of shares traded in the these stocks is the highest. This lends integrity to theprice movement, and the charts of these stocks have clearer buy and sell signals and fewerfalse signals.3. Swing charts (see Chapters 3, 4 and 5) work best with active stocks.Jim Slater, famous speculator, says ‘Elephants don’t gallop’ by which he means that the verysize of the top 50 companies inhibits the extent of their likely price movement. He’s right. Buthe is also not a chartist or a swing trader. He and many others scour the market for ‘ten-baggers’- usually smallish stocks that may go up ten fold in price (which Barclays Bank is certainly notgoing to do in my lifetime).19
Marc Rivalland on Swing Trading
It must be very gratifying, but I am not sure that I’d know a ten-bagger if I saw one. And if Ithought I had found one, I’d be wondering why others, who have a good deal more time on theirhands, hadn’t spotted it.I take a top down approach
Whenever I am making a decision about an individual share I am greatly influenced by how theFTSE index chart sets up. Sometimes the primacy I afford the index chart turns out to bemisplaced as the particular share I am watching turns out to be independently strong or weak. Ifail to capitalise because the index chart did not tell the same story. It can’t be helped. I can’tget used to buying a stock when my index charts suggest that the market as a whole is goingdown.I’m a market timer, a top down man - I try to get the market right, then the sector and ifyou get those two right, it’s difficult to lose money on an individual share.I am not suggesting that this method is one that everyone should adopt. It is simply the methodthat I am most comfortable with. You have only to read Kevin Goldstein-Jackson’s articles inthe Financial Times to see how well it is possible to do by being a bottom up man. But he, likeJim Slater, is looking for ten-baggers.When Berkshire Hathaway reported its profits in early May 2002, Warren Buffett was plaguedby questions from investors about what calculations to make in order to buy stocks. He said,“There is no single metric I can give you…people always want a formula. It doesn’t work thatway”.I understand the desire for a formula. To a certain extent, charts are formulaic. It’s largely a rulebased discipline. The popularity of charts is growing, exponentially I believe, precisely becauseinvestors and traders want a ‘metric’.When I do my top down analysis to determine the trend of the market as a whole, I use primarilyswing charts. They are intentionally governed by rules. But rules should be there to serve you,not master you, so in some limited circumstances, I have changed rules to make matters moreflexible. Also, in some respects, such as the tricky decision when to take profits, I have no magicformula (save that I like to take them early and often!).
The tooled-up swing traderEquipment
How life changed in the late Nineties. In the Eighties, I had a set of charts which I updatedmanually, and access to a landline telephone to phone my broker to discover what washappening. That was the sum total of my equipment.20
Swing Trading in Practice
I still keep a few charts which I update manually. But now a financial pager gives me near realtime prices. I use Reuters mini-pager (now owned by Sila Communications). Is it any better thanother pagers on the market? I don’t know. But what has been important for me is theaccommodating way that Reuters/Sila will arrange for me to have, for free, a mini-pager whenI am in South Africa or America on holiday (I know, I know you’re thinking how sad, but I’venever pretended not to be an addict). It costs £86 per month inclusive of VAT for the equityservice, LIFFE and Eurex. Good charting software has traditionally cost about £600-£900. Endof-day price feeds are reasonably priced, but real-time price feeds have always been expensive(over £1,000 per annum). I’ve always used Indexia/Updata software, and various different pricefeeds. Updata have recently launched a product that should revolutionise matters for privateinvestors. The software now comes free and the live feed, arranged through S&P, costs £57 permonth.I doubt that one actually needs a financial pager. I have one only because there are times whenI have no access to a computer. The internet provides various sources of cheap or free shareprice information (e.g. Advfn.com). Free charting software on the internet is fairly mediocre.One of the honourable exceptions is www.stockcharts.com.Many share price quote vendors will vaunt to the skies level II information - (mainly marketdepth). Pay up for it if you want. It is vital for day traders and overnight traders, so they say, butyou certainly do not need level II to apply the principles in this book.Beware of manipulation of the market depth. You will see on premium bulletin boards daytraders saying “Look at the ratio of sellers to buyers in Vodafone - it’s 12 to 1!!”. If you were ahedge fund with a short position, how would you encourage the market to go down. Place awhole lot of sell orders on the electronic order book some way above the market, therebyreinforcing the impression of a large ratio of sellers to buyers, and then remove those orders ifserious buying comes in. Not very difficult.Capital
What sort of capital is required? There is no minimum size account. Given that the spreadbetting firms will take almost any bet, however small, and will offer credit (against proof ofliquid assets) I suppose one could start with next to nothing. However I found in my early daysof commodity trading, when I put up the bare minimum, that it so restricted my trading that itwas next to useless, especially for a novice, as I was. Just like W.D. Gann, I started off losingmoney in the way that 90% of futures traders do. In the early 1980s, new to and excited bycommodity trading, I put up $5,000 and lost every penny. I saved some more from my salary. Iput up another $5,000 and again lost nearly every penny. But this represented progress. The firstoccasion it took me 3 to 4 months to lose the $5,000. The second occasion it took 18 months. Ishan't bore you with an entire life history, but having a small account puts ferociouspsychological pressure on one. Each loss is a hammer blow.21
Marc Rivalland on Swing Trading
How much should you risk on each trade? It’s impossible to say. It depends on each individual’srisk profile. Courtney Smith2 makes a persuasive case for not over-trading. He suggests thathaving decided where your stop loss should be, you should not risk more than 1% of your equityon any trade. Undoubtedly it is the right advice for beginners. More experienced traders mayfeel able to risk more. I certainly do.Type of account
I have the lot. A futures and options account, a CFD account and more than one spread bettingaccount.Contracts for a difference (CFDs) are a neat way of getting round the silly stamp duty whichsuccessive British governments have insisted on imposing on the purchase of shares. Theypermit traders to mimic the buying and selling of individual equities, but, by an artificial device,the traders do not technically own the shares, but rather a contractual right or obligation. Theeconomic effect is virtually the same as holding the shares or shorting the shares.An account to trade CFDs can be opened with any of the usual stockbrokers who offer thisservice. In addition, a number of spread betters offer not only a spread betting facility but alsoa CFD facility. It is important to understand the difference. In a CFD trade, the speculator ismarked to market every day and is charged interest on the full value of any long position, andis paid interest on the full value of any short position. Of course as interest rates are so low, theamount of interest which one earns is piffling, but it is noteworthy that a short position willactually earn you money whilst you are holding it. It used to be the case that CFDs were muchcheaper than spreadbets, but spread betting firms have altered their products so that they are nowvirtually identical to CFDs. The principal difference between a CFD trade and a spread bet isthat the CFD trade is fully taxable, whereas spread bets are not taxable.The growth of the spread betting business has been a real boon to the private investor in Britain,not only because of the tax advantages, but also because of the variety of share products whichcan be traded. In the United States, trading sector indices is big business (through exchangetraded funds or ‘ETFs’), but in Britain there was no real way to trade the FTSE sector indicesuntil spread betting came along. Some spread betting firms are open 24 hours and will hold stoplosses for you, whereas the London Stock Exchange’s electronic order book does not accept stoplosses.
2. New Thinking in Technical Analysis by Rick Bensignor (Bloomberg Press 2000), Chapter 12
22
3
GANN SWING CHARTS• W.D. Gann’s secret• Standard Dow theory compared to Gann• Changes of trend and intermediate swings• Construction of a Gann swing chart
23
Marc Rivalland on Swing Trading
W.D. Gann’s secretW.D. Gann may have been the greatest trader who ever lived. Here is how he described the‘secret’ of his trading in an interview with Ticker and Investment Digest in 1909:“For the past 10 years I have devoted my entire time and attention to thisspeculative market. Like many others, I lost thousands of dollars and experiencedthe usual ups and downs incidental to the novice who entered the market withoutpreparatory knowledge of the subject.I soon began to realise that all successful men, whether lawyers, doctors orscientists, devoted years of time to the study and investigation of that particularpursuit or profession before attempting to make any money out of it.Being in the brokerage business myself and handling large accounts, I hadopportunities seldom afforded the ordinary man for studying the cause of successand failure in the speculation of others. I found that over 90 per cent of the traderswho go into the market without knowledge or study usually lose in the end. Isoon began to note the periodical recurrence of a rise and fall in stocks andcommodities. This led me to conclude that natural law was the basis of marketmovements. I then decided to devote 10 years of my life to the study of naturallaw as applicable to the speculative markets and devote my best energies towardsmaking speculation a profitable profession. After exhaustive researches andinvestigations of the known sciences, I discovered that the law of vibrationenabled me to accurately determine the exact points at which stocks orcommodities should rise and fall within a given time. It is impossible here to givean adequate idea of the law of vibrations as I apply it to the markets. Howeverthe layman may be able to grasp some of the principles when I state that the lawof vibration is the fundamental law upon which wireless telegraphy, wirelesstelephone and phonographs are based . . .By knowing the exact vibration of each individual stock I am able todetermine at what point each will receive support and what point the greatestresistance is to be met . . .From my extensive investigations, studies and applied tests, I find that notonly do the various stocks vibrate, but that the driving forces controlling thestocks are also in a state of vibration.”I pause. Laws of vibration? If this sounds deranged to you, you are probably not alone. W.D.Gann placed weight on the fact that the number 7 occurs in the Bible more often than any othernumber, he relied on natural law and more. Hundreds of thousands of people have heard of W.D.
24
Gann Swing Charts
Gann, but I imagine that many are wary of using his techniques, insofar as they are capable ofbeing understood, because they sound fanciful, to put it charitably.But interestingly Ticker and Investment Digest appointed one of its representatives to monitorGann's trading. The following results were achieved.“During the month of October 1909 in 25 market days, Mr. Gann made 286transactions in various stocks on both the long and short side of the market. 264of these transactions resulted in profits; 22 in losses. The capital with which heoperated was doubled 10 times so that at the end of the month he made 1,000%.”Some of what Gann said may be too strange to give credit to but he made some astoundinglyaccurate public predictions including that of the Great Crash in 1929 and he is said to haveaccumulated $50 million during the first half of the 20th Century. (Sceptics point out that thereappeared to be no trace of the $50 million after his death).There are traders who are vociferously defensive of some of the more mystical aspects ofGann’s work. So be it. It is not the remit of this book to bury or to praise Gann.Although Gann angles are fairly widely used by market traders, I don’t use them. The part ofGann’s work that fascinates me is his swing charts. They are logically defensible and they work,although as you will see I have made some modifications. I believe that the intelligent use ofswing charts will materially enhance the profitability of your trading.I don’t know whether Gann ever met Charles Dow but I assume he must have read Dow’seditorials in the Wall Street Journal at the turn of the 19th century. Gann swing charting is ashort-term variation of a part of standard Dow theory.
Standard Dow theory compared to GannThere are several elements to standard Dow theory. But at the heart of it is an attempt to identify,from the price action, when a bull market becomes a bear market and vice versa.A bull market by definition has higher highs and higher lows. It resembles an irregular staircase.After the market has made a swing low (point A), and it resumes its uptrend, it is a warning signwhen the next upward swing fails to make new highs. See point B on the chart over the page.The price action suggests that the enthusiasm of buyers is eroding. When the subsequentdownward swing breaches a previous swing low, the erosion of support from buyers isconfirmed. This is a sell signal. See point C on the chart over the page.Don’t take my word for it. Look at the charts and you will see hundreds of examples of it. InDow theory these swings would be substantial swings lasting many weeks if not months.
25
Marc Rivalland on Swing Trading
B
AC
fig 3.1But standard Dow theory did not regard it as a sell signal if, after making new highs, thesubsequent downward swing breached a previous swing low, as in fig 3.2 below.
B
AC
fig 3.2There would need to be a lower high, optimally before the swing low was breached, as in the firstdiagram. It is in this respect that Gann swing charts differ from standard Dow theory. In Gannswing charting theory, a sell signal is generated whenever a prior swing low is breached (whetheror not the last swing high was lower than the one before that). And as I’ve mentioned, whereasthe swings in Dow theory last many weeks or months, in Gann swing charting, a valid swing lowmay be created by a retracement lasting just 3 days. You may think, at this point, that 3 days of