source: FutureAnalyzer.com
William Delbert Gann was born
June 6, 1878, in Lufkin, Texas, to Sam H. and Susan R. Gann, immigrants to
Texas from the British Isles. Lufkin is midway between Houston and Texarkana.
This part of Texas is cotton country and Gann’s parents lived on a Neches River
bottom cotton ranch near Lufkin. He grew up around the cotton warehouses in
Angelina County where cotton was king. W. D. Gann was raised in a very strict
Methodist church family. His mother, a very religious person, encouraged him to
read the Bible at a very early age, and in fact, wanted him to become a
minister.
Gann was not sure he wanted to become a minister, but studying the
Bible was certainly easier than working in the cotton fields, as was his
father’s wish. He attended church every Sunday with his parents and as he
listened to the sermons found his
interpretation of the Bible scriptures to differ from the minister’s. In the
Bible he discovered time cycles, repetition of important numbers, and
references to the wise men following the stars. Also, that it was written in
veiled language that made interpreting the real meaning difficult. Since Gann
had a photographic memory, by age 21 he had nearly memorized the Bible.
During his school years Gann
excelled in mathematics and was generally called as a gifted mathematician. His
tremendous appetite for knowledge and his open-minded attitude led him into
many different fields of study that eventually resulted in discoveries in the
markets that would otherwise have been overlooked. He completed high school in
a time when most children were only able to attend school through the third or
fourth grade. As a teenager, Gann liked to be called W. D., and he used these
initials the rest of his life.
W. D. pestered his parents until they relented
and signed a minor release form that he needed to obtain a job. His first job
was that of a News Butcher on the passenger train between Texarkana and Tyler,
Texas. This job required him to be quick-witted, aggressive, and able to deal
with all kinds of people. During his teen years, he worked in the cotton
warehouses in Lufkin and Texarkana, Texas. While working in the cotton
warehouse, he was introduced to commodity trading.
In 1902, at age 24, W. D. Gann
made his first commodity trade in cotton, the market he knew best. The small
profit from that trade marked the beginning of what was to become one of the
most remarkable and legendary careers the speculative markets have ever known.
Over the next 53 years, Gann took over $50,000,000 from the markets.
It has
been reported by a man who worked for Gann the last eight years of Gann’s life,
that approximately 1/3 of the money he made was for himself and the other 2/3
was for the accounts he supervised for clients. From that very first trade, it
is believed Gann was using principles and techniques he continued using
throughout his trading career. The notations on some of his early charts
substantiated this belief. As time progressed, his trading methods were
refined.
In 1906 W. D. went to Oklahoma
City. He worked as a broker for a brokerage firm, trading for himself while
handling large accounts for clients. He studied the cause of success and
failure in the speculation of other traders. He found that over 90% of traders
who enter the markets without knowledge and study usually lose in the end. Gann
also lost a significant amount of money and admitted his trading was based on
hope, greed, and fear.
Later on, in his books and courses, he cautioned all
traders about these emotions. Early on, Gann began to note the periodical
recurrence of rise and fall in stocks and commodities. This led him to conclude
that natural law was the basis of market movements. He then devoted ten years
to the study of natural law as applicable to the speculative markets. During
that time he traveled to England, Egypt, and India to gain knowledge in ancient
mathematics and astrology.
In the British Museum in England he conducted
extensive research on market cycles. In an Egyptian temple it is believed he
found the basic construction of what was to become known as his Square of 9
Chart. After exhaustive research and investigation of the known sciences, he
discovered the Law of Vibration enabled him to accurately determine the exact
prices to which stocks or commodities would trade within a given time, and that
each stock or commodity had its own rate of vibration.
At age 27, Gann was a
well-known name in the Southwest. His views on the analysis of cotton prices
were so well respected that a Texarkana newspaper, The Daily Texarkanian, ran a
story on Gann’s cotton predictions. In 1908, at age 30, Gann moved to New York
and opened his own brokerage office at 18 Broadway. He began testing his
theories and techniques in the market. On August 8, 1908, he made one of his
greatest mathematical discoveries for predicting the trend of stocks and
commodities.
This was “The Master Time Factor.” Within a year, it became clear
to others that his success was based on more than just luck. No one researched
time cycles as extensively as Gann. His charts show the cycles with which he
worked, went back to history’s beginning, and bore no resemblance to other
researcher’s time cycle studies.
In October 1909, Richard D.
Wyckoff, Owner and Editor of The Ticker and Investment Digest asked Gann for an
interview to document his trading ability for one month. The interview was
granted, and Gann’s trades were monitored for 25 market days during the month
of October in the presence of a Ticker representative. At that time the markets
also traded on Saturday. Gann made 286 trades in various stocks, both long and
short. There were 264 trades that resulted in profits and 22 in losses. 92.3%
of the trades were profitable.
The capital used doubled ten times resulting in
1000% gain on his original investment during those 25 trading days. What makes
this even more phenomenal is that Gann did this with an average time between
each trade of about twenty minutes. In one day Gann made 16 trades in the same
stock, 8 of which were in either the top eighth or the bottom eighth of that
particular swing. Such a performance is unparalleled in the history of Wall
Street. As stated by James R. Keene, the famous speculator of that era, “The
man who is right 6 times out of 10 will make his fortune.” It seems a foregone
conclusion that Gann was picking tops and bottoms with a high degree of
accuracy.
At this point of time, in 1909, he was only 31 years of age, so
whatever methods he was using had already been discovered. This biographer
believes that after his sensational performance Gann regretted having granted
the interview, as it was stated in the printed article that he did not know the
results were to be published. When the article was printed in The Ticker
Investment Digest, Gann was besieged with people asking how he was able to pick
tops and bottoms as he had demonstrated.
His only answer to them was he used
The Law of Vibration to make all his calculations. At this conjuncture there
were only two choices: l) to give away his secret discoveries and risk
destroying the markets, or 2) to detract from his method of picking tops and
bottoms by writing books and courses about mechanical trading systems, the use
of geometrical angles, the use of Time and Price Charts, such as the Octagon
Chart (Square of 9), Master 12 Chart (Square of 144), Hexagon Chart (the cube),
Square of 90, Square of 52, 360 Degree Circle Chart, and many other trading
techniques.
If Gann had continued trading
using only his method of picking tops and bottoms, without a doubt he would
have become one of the wealthiest men in the world, and in so doing would have
attracted too much attention. He would have been asked too many questions by traders
and would have been compelled to explain. However, at certain times, he
probably used his method to advantage.
Gann had a profound understanding of
natural law, so rather than place himself in an embarrassing situation, he
chose to trade using his mechanical systems and other techniques he had
developed. Also, having more capital than was required for a good living was
not important to him, as he was more interested in the knowledge possessed by
ancient civilizations and the occult sciences. Gann understood how the Laws of
Nature controlled human beings and, therefore, he understood the markets,
because the markets are nothing more than an expression of the actions of human
beings.
The two previous paragraphs
are my belief. You may agree or disagree, but before you arrive at a
conclusion, carefully study Gann’s 1909 trading demonstration. He made 286
trades in 25 days, which is 11 trades per day. To do this, you must pick the
tops and bottoms on a short intraday time period.
If what I believe is true, it
is very sad to think that a genius individual such as W. D. Gann, had to
disguise the truth throughout his life, with a smoke screen of many trading
methods and techniques. In 1918 his office address in New York was 81 New
Street and in the early 1920’s was at 49 Broadway. Over the years, Gann
maintained several offices in New York all located on Wall Street with the
address numbers of 78, 80, 82, 88, 91, 93 and 99.
At the height of Gann’s
career, he employed 35 individuals who made charts of all kinds, did analytical
research at his direction, and performed many duties involved with his various
publications and services. The name of one of his businesses was W. D. Gann
Scientific Service, Inc., and the other, initiated in 1919, was W. D Gann
Research, Inc. The firms published the following Supply and Demand Letters:
Daily Stock Letter, Tri-Weekly Stock Letter, Weekly Stock Letter, Daily
Commodity Letter, Tri-Weekly Commodity Letter, and Weekly Commodity Letter.
Telegraph Service was all offered as follows: Daily Telegraph Service on
Stocks, Daily Telegraph Service on Cotton, Daily Telegraph Service on Grain,
and Telegrams on important Changes Only, on Stocks or Commodities. Published
under Annual Forecasts were: Annual Stock Forecast, Annual Cotton Forecast,
Annual Grain Forecast, Annual Rubber Forecast, Annual Coffee, Sugar and Cocoa
Forecast. Supplements to all Forecasts were issued and mailed on the first of
each month. Special Forecasts on stocks or other commodities were made on
request.
Also offered were daily, weekly, monthly, quarterly, and swing charts
on stocks and commodities. Gann taught advanced courses of instruction entitled
Master Forecasting Method, at a cost of $2,500, and New Mechanical Method and
Trend Indicator, at a cost of $5,000, to those who want it for their own use
and will not publish, sell, or teach it to others. It is too valuable to be
spread broadcasted. The cost of these courses and personal instruction in
today’s economics would be $25,000 to $50,000, or more.
As early as 1923, Gann offered
a service entitled “The Busy-Man’s Service.” This was a service for
professional and businessmen where Gann supervised their trading accounts by
advising them what and when to buy and sell. In later years the name of this
service was changed to “Personal Service.”
The cost of this service was
on a 1 month, 3 months, 6 months, or annual basis, or on a Part-of-Profit Plan
where the monthly fee was smaller and Gann received 5% of the net profits.
Under the Part-of-Profit Plan it was required that a minimum of 100 shares be
traded. The clients were advised by telegram or letter.
An article in The Evening
Telegram dated New York, Monday, March 5, 1923, used the words “prophet” and
“mathematical seer” to describe Gann.
It also stated his followers declared he
was 85% correct in his forecasts. He predicted the election of Wilson and Harding
using fortunate numbers and fortunate letters combined with cycles. He
predicted the abdication of the Kaiser and the end of the war to the exact date
six months in advance. His predictions were based on mathematics. He stated if
he had the data he would use algebra and geometry to tell exactly by the theory
of cycles when a certain thing is going to ocur again.
He further stated that
there is no chance in nature, because mathematical principles of the highest
order lie at the foundation of all things. The article pointed out that Gann
received calls every day from prominent persons asking him to cast their
horoscope. It also said he told politicians whether or not they would be
elected and solved problems for clergymen, bankers, and statesmen.
In another article in the
Morning Telegraph, dated Sunday, December 17, 1922, the Financial Editor,
Arthur Angy, stated that “W. D. Gann had scored another astounding hit in his
1922 stock forecast issued in December, 1921, I found his 1921 forecast so
remarkable that I secured a copy of his 1922 stock forecast to prove his claims
for myself. And now, at the closing of the current year of 1922, it is but
justice to say I am more than amazed by the result of Mr. Gann’s remarkable
predictions based on pure science and mathematical calculations. ”
W. D. and his wife, Sadie H.
Gann, had one son and three daughters born to their marriage. Their son, John
L. Gann, was in partnership with his father for several years in the late
1930’s and early 1940’s, operating under the firm name of W. D. Gann & Son,
Inc. Apparently, the two personalities were not always compatible, as their
association was ended in the mid 1940’s. This writer has been told one of their
main differences concerned astrology, as John did not believe astrology had any
effect on market movements, or human behavior.
This probably upset W. D. as he
knew well the effect of planetary motion on the markets and the individual.
Following the association with his father, John served as a broker for many
years for the firm Sulzbacher, Granger & Co. in New York City. It is
believed that John passed away in 1984.
For many years Gann maintained
a home in Scarsdale, New York, which was, at the time, the estate bedroom
community for New York City. In an article that appeared in the May 26, 1933
New York Daily Investment News, it was reported that Gann left New York in the
first 1933 model Stinson Reliant airplane, piloted by Flinor Smith, a woman
aviator, to conduct an extensive tour of the country analyzing cotton, wheat,
and tobacco crops, and business conditions.
The airplane was equipped with
navigation instruments, radio receiving equipment and extra-large fuel tanks
that gave a flying range of 750 miles. It was powered with a Lycoming engine
and cruised at 135 miles per hour. Gann was the first Wall Street advisor to se
an airplane for studying market conditions so he could advise clients much
faster of changing market conditions. During his trip he was a speaker to
members of Kiwanis, Rotary, Chamber of Commerce, and other business
organizations in various larger cities throughout the United States.
In 1935, Gann made an airplane
trip to South America for studying crop conditions, and to gather information
on the increase and production of cotton in Peru, Chili, Argentina, and Brazil.
He logged 18,000 miles by air and another 1,000 miles by automobile.
In July of 1936 Gann purchased
a specially built all metal airplane, which he named “The Silver Star,” and
used in making crop surveys. In July of 1939 he purchased a new Fairchild
airplane for the same purpose.
Gann was a member of the
Commodity Exchange, Inc. of New York, the New Orleans Cotton Exchange, the
Rubber Exchange of New York, the Royal Economic Society of London, the American
Economic Society, the Masonic Lodge, the Shrine, the Chicago Board of Trade,
and was a devout Christian in the Methodist Church.
Gann had a winter home in
Miami, Florida, and in the 1940’s moved there on a full-time basis. His office
was at 820 S. W. 26th Road in Miami. While in Florida, he continued his
advisory services as well as teaching his commodity and stock market courses,
either in person or by mail. By the late 1940’s he had a recommended list of
Books For Sale that included the subjects of numerology, astrology, scientific,
and miscellaneous.
He was involved in real estate holdings, and enjoyed large
automobiles, especially Lincolns, which he purchased new yearly. In 1954, after
making several successful coffee and soybean trades, Gann purchased a fast
express cruising boat that he named “The Coffee Bean.” It was reported that
Gann wore the same type of suit throughout his life, and that his home was
filled with items collected in his world travels. He vacationed often in South
America. But, in the opinion of his peers, he did not live beyond his means.
W. D. Gann wrote some of the
best books ever written on the stock and commodity markets. The following is a
list of the books written by him and the year they were published:
Speculation a Profitable
Profession
The Truth of
the Stock Tape
The Tunnel
Thru the Air
Wall Street
Stock Selector
Stock Trend
Detector Scientific Stock Forecasting
How to Make
Profits Trading in Puts and Calls
Face Facts
America. Looking Ahead to 1950
How to Make
Profits Trading in Commodities
45 Years in
Wall Street
The Magic
Word
How to Make
Profits Trading in Commodities
Gann was a prolific writer.
His style of writing was unique. Readers of his books considered him to be a
poor writer with a limited use of the English language. Not so! Upon methodic
study of his work, the reader will discover in time the Gann method of
teaching. He will inspire the reader to research everything from the origin of
numbers to the musical scale and vibrations.
W. D. Gann, in my estimation,
was a genius. He was born a Gemini with a high intellectual capacity, and a
dual personality that caused him to be both genial and obstinate. He was a
gifted mathematician, an expert chart reader, and had an extraordinary memory
for figures. Take away his science and he would beat the market on chart
reading alone.
One of Gann’s most important technical tools was his charts and
no one kept up as many as he did. Gann’s charts encompassed 55 years, from 1900
to 1955. During this time thousands of daily, weekly, monthly, quarterly,
yearly, and other various charts, were made with great care, each a work of
art. He believed charting was an art and if you understood everything
the chart was showing, it would aid in forecasting the next day, week, or
month’s, price movements.
Gann was a workaholic, at times working 17 hours per
day, 6 days per week. He was very demanding of those who worked with and for
him, and expected the same effort from them that he himself put
forth. He expected to issue instructions only once and did not feel it should
be necessary to repeat them.
Gann was deeply analytical and
studied price actions of various stocks and commodities back through the years.
He spent nine months in the British Museum working day and night researching
stock and commodity prices and dates from 1820, and wheat prices and dates from
1200. He also spent long hours and long days in the Astor Library in New York
City researching stock and commodity markets. He was a student of numbers,
number theory, progressions, and the progression of numbers.
His trading system
was based on natural law and mathematics. Since time progresses as the earth rotates
on its axis and in its order, and time is measured by numbers and progression
of numbers, and prices in their movement upward and downward are also measured
in numbers, it is understandable why Gann had an intense interest in numbers,
number theory, and mathematics. A keen understanding of natural laws and their
effect on mankind have a direct effect on the markets. The markets are only
extensions or reflections of man’s actions.
In Gann’s time there were no
calculators. He used a slide rule and the various master charts he developed,
such as the Square of 9, for his calculator. He kept an open mind to any
trading ideas to achieve perfection. When making his forecasts, he used many
methods to arrive at the time for a trend change, and all of them to confirmed
he was correct. In his early trading he made thousands of dollars.
But, by
listening to false rumors and other people’s ideas, he also lost thousands of
dollars. In 1913 and again in 1919, he lost small fortunes when the brokerage
firms he was trading with went bankrupt. One of these firms was Murray Mitchell
and Company. In those days the client’s funds were not protected by exchange
regulations in case of a failure, as they are today.
During this time he was also
involved in two bank failures. Regardless of these losses and misfortunes, he
was always able to rely upon mathematical science to aid him in making a
financial comeback. This is why Gann states that knowledge of the market is
more important than money.
Today, people believe “times
are different,” but Gann’s time saw its bull markets and panics in the stock
market, bull markets and panics, in the commodity market, wars, inflationary
periods, depressions, bank closings, etc. In 1921 the rate of inflation was
100%. Strikes were rampant, jobs impossible to find, and productivity at very
low levels.
The Great Depression of 1929 to 1932 and the outright confiscation
of the citizen’s gold that was exchanged for printed money, left deep scars on
the country and it’s citizens. W. D. Gann was avidly against the New Deal and
Roosevelt’s creeping socialism. Therefore, to learn from other people’s past
experiences, people today should understand Gann’s famous quotation, “The
future is but a repetition of the past, or as the Bible says, the thing that hath
been, it is that which shall be; and that which is done, is that which shall be
done; and there is no new thing under the Sun.” Gann said, “The average man’s
memory is too short.
He only remembers what he wants to remember or what suits
his hopes and fears. He depends too much on others and does not think for
himself. Therefore, he should keep a record, graph, or picture of past market
movements to remind him what has happened in the past can, and will, happen in
the future.
Panics will come and bull markets will follow just as long as the
world stands and they are just as sure as the ebb and flow of the tides,
because it is the nature of man to overdo everything. He goes to the extreme
when he gets hopeful and optimistic. When fear takes hold of him, he goes to
the extreme in the other direction.”
The following is taken from 45
Years in Wall Street and is very good advice and very true in today’s world.
“Every man takes out of life just exactly according to what he puts in. We reap
just what we sow. A man who pays with time and money for knowledge and
continues to study and never gets to the point where he thinks he knows all
there is to know, but realizes that he can still learn, is the man who will
make a success in speculation or in investments.
I am trying to tell you the
truth and give you the benefit of over 45 years of operating in stocks and
commodity markets and point out to you the weak points that will prevent you
from meeting with disaster. Speculation can be made a profitable profession.
Wall Street can be beaten and there is money operating in commodities and the
stock market if you follow the rules and always realize that the unexpected can
happen and be prepared for it.”
In How to Make Profits in
Commodities -- Gann made the following comments regarding knowledge as he
believed knowledge is power. All who read this should heed and always remember
his advice. “The difference between success and failure in trading in
commodities is the difference between one man knowing and following fixed rules
and the other man guessing.
The man who guesses usually loses. Therefore, if
you want to make a success and make profits, your object must be to know more;
study all the time; never think that you know it all. I have been studying
stocks and commodities for forty years, and I do not know it all yet. I expect
to continue to learn something every year as long as I live. Observations, and
keen comparisons of past market movements, will reveal what commodities are
going to do in the future, because the future is but a repetition of the past.
Time spent in gaining knowledge is money in the bank. You can lose all the
money you may accumulate or that you may inherit - that is if you have no
knowledge of how to take care of it - but with knowledge you can take a small
amount of money and make more after time spent in gaining knowledge. A study of
commodities will return rich rewards.”
Sometime in 1947, Gann sold W.
D. Gann Research, Inc. to C. C. Loosli, a San Francisco attorney. He became
disenchanted with the business and on February 14, 1948, W. D. Gann Research,
Inc. was transferred to Mr. Joseph L. Lederer of St. Louis, Missouri. The
office for W. D. Gann Research, Inc. was maintained at 82 Wall Street in New
York until 1952. Then it was moved to Scarsdale, New York, and in 1956
relocated to St. Louis, Missouri, where its only business was that of
investment adviser.
In 1950 in Miami, Florida,
Gann and a partner, Ed Lambert, founded Lambert-Gann Publishing Co. Ed Lambert
was an architect who designed the Inter-State Highway System in the greater
Miami area Lambert Gann Publishing Co. published all Gann’s books and courses.
W. D. Gann passed away in the
Methodist Hospital in Brooklyn, New York, on June 14, 1955, at the age of 77.
He was survived by his wife, Sadie, three daughters, and a son. That day the
world truly lost a market legend.
After Mr. Gann’s death in
1955, Ed Lambert continued to operate the business that included a chart
service of updated Gann style charts. He was not as active in promoting Gann’s
writings as when Gann was alive, so for the following twenty years Gann’s work
became quite obscure. In 1976 Bill and Nikki Jones of Pomeroy, Washington,
purchased Lambert-Gann Publishing Co. and the Gann copyrights. In the purchase
were all of his personal researches including thousands of his charts, papers,
books, and writings he had collected through fifty years of trading and
research.
There were also tables and miscellaneous office furniture used by
Gann. The largest Mayflower moving van available was required to transport this
purchase to Pomeroy, Washington. Following Billy Jones’ death in September
1989, Nikki Jones continues to operate Lambert Gann Publishing Co., carrying on
the Gann tradition with the sale of his books and courses. In this biographer’s
opinion, W. D. Gann was the greatest market researcher of all time.
His trading
career spanned more than a half century. During that time he devoted his total
life to market research and trading. He researched every possible aspect of
natural laws in conjunction with variables of price and time in market
movements.
This study became an obsession
to find the cause and effect of market fluctuations, which he did. The trading
techniques Gann developed work the same today as they did when he used them.
His library contained volumes of books and manuscripts on harmonic waves,
proportion, growth, gravity, electricity, nature, and natural phenomena.
However, there were no books on open interest, volume, stocks, or commodities.
The only books and courses on commodities and stocks were his own. He
was a humble man who stated, at age 75, that he had not learned all there was
to know, and yet, he knew more about the markets than any trader who ever
lived. There is an important lesson to be learned from the study of his life
and his work. For those of you who have diligently studied his writings, you
will understand my statements. Hopefully, for those of you who are not familiar
with Gann, this writing will inspire you to begin. (presentation after
Halliker)
William D. Gann was a trader
of the early 20th century. His abilities for profiting form the
stock and commodity markets remain unchallenged. Gann’s methods of technical
analysis for projecting both price and time targets are unique. Even today, his
methods have yet to be fully duplicated.
His successes are legendary. Gann literally converted small accounts into
fortunes, increasing their net balances by several hundred percent. There are
numerous examples of his trading successes, among which are these:
1908 – a $130 account
increased to $12.000 in 30 days.
1923 – a $973 account increased to $30.000 in 60 days.
1933 – 479 trades were made with 422 being profitable. This is an accuracy of
88% and 4000% profit.
1946 – A 3-month net profit of $13.000 from starting capital of $4500 – a 400%
profit.
The following paragraph
appeared in the December 1909 issue of “Ticket” Magazine. It was
written by R.D. Wyckoff, the former owner and editor of the “Ticket”, and
describes Gann’s proficiency for projecting price targets forward in time:
“One of the most astonishing
calculations made by Mr. Gann was during last summer (1909) when he predicted
that September Wheat would sell at $1.20. This meant that it must touch that
figure before the end of the month of September. At twelve o’clock, Chicago
time, on September 30th (the last day) the option was selling
bellow $1.08 and it looked as though his prediction would not be fulfilled. Mr.
Gann said, ‘If it does not touch $1.20 by the close of the market, it will
prove that there is something wrong with my whole method of calculations. I do
not care what the price is now, it must go there’. It is common history that
September Wheat surprised the whole country by selling at $1.20 and no high in
the very last hour of trading, closing at that figure”.
Gann’s trading methods are
based on personal beliefs of a natural order existing for everything in the
universe. Gann was part of a family with strong religious beliefs. As a result,
Gann would often use Biblical passages as a basis for not only his life, but
his trading methods. A passage often quoted by Gann was this from Ecclesiastes
1:9 - 10:
“What has been, that will be;
what has been done, that will be done. Nothing is new under the sun. Even the
thing of which we say, ‘See, this is new!”, has already existed in the ages that
preceded us.”
This universal order of nature
also existed, Gann determined, and we have the same opinion now, in the stock
and commodity markets. Price movements occurred, not in a random manner, but in
a manner that cat be pre-determined. The predictable movements of prices result
from the influence of mathematical points of forces found in nature… And what
is the cause for all this points of forces? Right… cosmos…universe...all
planets around us. This Gann could say at that time.
These points of force were
felt to cause prices to not only move, but move in a manner that can be
anticipated. Future targets for both price and time can we confidently
projected by reducing these mathematical points of forces to terms of
mathematical equations and relationships.
The mathematical equations of
Gann are not complex. They result in lines of support and resistance which
prices invariably will follow.
Gann held that time is the
most important element of trading. Time is the factor that determines the
length of a commodity’s price trend. When time dictates that trending
prices should react, prices may stabilize for a short period, or they may
fluctuate within a tight range, but eventually they will react by reversing
direction. Time is the element that will determine WHEN prices should react.
Certain price reactions are
found to occur during specific times. The actual TYPE of price reaction
can be anticipated, and pre-determined, by using Gann time rules.
Gann time periods last not
only days or weeks, but months and even years. Gann’s trading year is first
divided in half, equivalent to 6 months or 26 weeks. The year is then divided
by eighths, and then by sixteenths. And then, after you think you understand
all of this, you find that Gann’s year is also divided by thirds.
There are also important time
periods within the Gann year. For example, since a week is 7 days, and 7 times
7 is 49, Gann’s work found that 49 is a significant number too. Important tops
or bottoms may occur between the 49th and 52nd day,
although an intermediate change – in – trend may occur between the 42nd and
45th day, because 45 days in 1/8 of a year.
Other time periods that were
important to Gann, at which a price reaction could be expected, are:
- Anniversary dates of
major tops and bottoms
- 7 months after a major
top or bottom for a minor reaction.
- 10 to 14 days is the
length for a reaction in a normal market. If this period is exceeded, the next
reaction should be expected after 28 to 30 days.
If you’re not already
confused, understand that Gann’s year may not only be calendar, but “fiscal” as
well; starting from major tops or bottoms. Gann’s time rules consider many
periods, including seasonality, Biblical references, and astronomical events.
Let’s see a little example.
This is an example of astronomical correlations on a Gann chart. One of Gann’s
beliefs, stemming from his “natural order” concept, is the influence of
planetary movements on earthly events, such as the moon’s perceived effect in
tides. This “cosmic perspective” of Gann is unlike conventional astrology, in
that planetary influences, like units of price, are unique to each market.
1) Gann was a master of
his time, a personality not easy to match any time soon. No matter what others
say, his secrets have not been fully discovered yet.
2) Gann managed, with the
methods of his time, and this is quite remarkable, to create an almost perfect
system. After a general view some might consider that his system is entirely
based on technical analysis and numerology. At a closer look we discover
that Gann discretely refers numerous times to elements of astrology as an
important part of his system.
3) Gann admitted one
time, when talking about astrology, that he can not reveal all aspects of his
work because people are not yet prepared for this kind of information. Talking
about astrology as a method of financial analysis wouldn’t have been wise in the
time of 1910-1930,
4) Nowadays the society
acknowledges the value of astrology as a science and appreciates it. This
recognition is possible because of the hard work of many people that dedicated
their life to researching this domain.
5) Gann had a complex
system: the basis was astrology; at a higher level he used fundamental analysis
and numerology; the outer layer was technical analysis. What remained to the
successors was the outer layer. The depths are for those patient and courageous
enough to walk his path.
6) After five
years of research we have also managed to develop a complex system of analysis.
We don’t claim to have reached Gann’s perfection. We use although the same
methods of analysis, we work with the same indicators but we have the advantage
of the amazing improvements in informatics, mathematics and technology. We are
a team that worked hard and that is still looking for ways of improving the
system. We believe we have managed to offer analysis many people are very
satisfied with.
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