What Said Gann

source: here

Over the past couple of weeks I have been reviewing an old trading book written in 1949 called 45 Years On Wall Street by W.D. Gann. I have done it for two reasons the first is that to be successful in anything you always have to do the basics very well, and part of this is periodically reviewing what you know or have learnt in the past. Every successful trader I have ever met spends time reviewing past trades, education, along with spending time developing their skills and learning news ones.

In reading the book it struck me that even though it was written 65 years ago, whilst times have changed some things never do. For example at the end of the book W.D. Gann the writer, gives answers to some of the common questions that he gets from clients, questions such as:

1. What is the best newspaper to consider

2. What is the best magazine to consider

3. Is such and such broker reliable

The questions we get asked here in 2014 are almost identical to the above, and I could add quite a few more. Another thing that struck me in this book 45 Years On Wall Street was that on page 4 W.D. Gann talks about stock picking newsletters. His comments were that many have tried to follow these newsletters and either lost or not made money and his reasoning and I quote was that “A smart man cannot follow another man blindly even though the other man is right” his reasoning is that you cannot have confidence in the other man if you do not know what his recommendations are based on.

Gann’s comments above are something I 100% agree with as over the years I have had many people ask me about stock picking newsletters and seen many who were not successful from subscribing to them. My reasoning was always that unless you know why you are entering or exiting yourself you will not have trust and as such you will make emotional decisions that will see you not enter, enter late or exit early or not exit at all.

Re-reading 45 Years On Wall Street re-enforced to me many things and why the old tried and true methods are still valid. It also re-enforced to me why we should stand firm when challenged by would be traders about why we are not teaching the latest fads.  Fads come and go in fashion, music and many other things whereas classics last forever. I am fully confident that a classic book full of classic rules and sound strategies like 45 Years On Wall Street will still stand the test of time in 50 years and even 100 years from now, and I am confident in this because one thing never changes and that is human emotions.