Just for a bit of perspective, 5% drops happen 2 or 3 times max in a year. Theoretical probability of identifying such tops is 3/252 (252 being number of trading days in a year). That's about 1.2% probability of making a correct call. Using cycles/e-wave/astro to make such call does not improve the probability by all that much. No wonder rarely anybody catch these tops on a consistent basis. Yet the obsession never dies both for the caller and the dumb followers.
Gann seems to agree. Best to use technical tools to id swing points, not tops and bottoms.
"Notes on Gann, W. D.. How To Make Profits Trading in Commodities: A Study Of The Commodity Market, With Charts And Rules For Successful Trading And Investing"
BEST WAY TO TRADE
The most money is made by swing trading,
Follow the trend. Learn to follow the trend
Determine the Trend by higher bottoms and higher tops
trade.
TIME TO STAY OUT OF THE MARKET
If it has had a big move previously or a few years before and seems to be in a narrow, trading range, or what I call a sideways move, leave it alone until it shows some definite move.
watch how it acts on rallies and how it acts on reactions, so you can determine whether it is in a section (wave) of a bull campaign, which will be resumed later, or whether it is in a bear campaign, which must run out 3 to 5 sections before the bottom is reached. (he may be describing what we now call an Elliott wave structure although Gann identified a natural harmonic wave pattern that fits in markets where relative values remain stable). Always ID where price is in the wave structure
TWENTY-EIGHT VALUABLE RULES In order to make a success trading in the commodity market, the trader must have definite rules and follow them. The rules given below are based upon my personal experience and anyone who follows them will make a success. (see rest of the book) ;-)
