To TRULY be a success at almost any profession takes commitment — the type of commitment which comes from the heart, not the mind. Most successful people I know have a dedication towards their chosen path which was forged through hunger. Hunger for knowledge, hunger for power, hunger for wealth, and, in many instances, the hunger associated with survival. It’s hard to be “rich” if you haven’t been “poor”; “happy” if you haven’t been “sad”; or “satisfied” if you haven’t been “hungry”.
I believe Gann’s biggest secret consisted of hard work and common sense. Hard work follows a true commitment and a desire to learn. Common sense is sharpened by the process of learning from experience. In my opinion, THERE IS NO SUBSTITUTE FOR HARD WORK AND AN OPEN MIND.
In trading commodities, a critically important early step towards success is learning about yourself and how you function. You can learn about yourself quickly in the marketplace. By far, the weakest tool in a trader’s arsenal is the TRADER. In this business, it is so very true that you are your own worst enemy. It is critical to understand yourself and to bring your emotions under control.
Emotions are tamed by confidence. Confidence is gained by knowledge. Knowledge is achieved by dedication to study and willingness to learn from experience. The entire process takes persistence. Persistence is fed by desire and hunger. You stay hungry by realizing and believing there will always be more to learn Never reach the point where you consider yourself an “expert” instead of a student. Stay humble, lest the markets humble you.
Become an independent thinker. Don’t concern yourself with what “they” say. Don’t conform your opinions for the sake of conformity. I constantly tell myself, “don’t take the advice of another unless you know they know more than you know. Dare to be a success without fearing failure.
Do not apologize for failures nor be embarrassed by them. Instead view failures as an opportunity to learn. Much more will be learned from losing trades than from winning trades. Failures are a challenge of your commitment and can make you stronger if you will meet the challenge. Failures are the fuel to keep the hunger burning.
Through the learning process, you will develop the important patience and discipline needed to become a winner. In his book, “How to make Profits in Commodities”, which I highly recommend, W D Gann listed 28 rules for success in the commodity markets. The vast majority of these deal with money management and/or mental discipline. Some of the sharpest analysts I know are not successful traders because they cannot overcome their own mental weaknesses.
Success does not come easily, nor should it. I CANNOT OVER EMPHASIZE the importance of mental preparation and self-examination. As an additional aid, I suggest Rudyard Kipling’ s poem If.
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W D Gann was one of the most famous investors of all time and a portrait hangs of him in the New York Stock Exchange in recognition of his achievements.
This article is all about trading for a living and how to create wealth.
Let’s look at Gann’s methods and how you can use his tools to make yourself some big trading profits to.
Gann’s Methods:-
Gann’s trading methods were all based upon the theory that market action repeats itself.
As humans our psychology is constant and as we are ones who create market prices this psychology repeats itself again and again in price action.
Gann used technical analysis to make his trades and when he traded at the turn of the century he employed a team of draughtsman to construct the charts.
Today, traders can simply use computer programs to do the work and there are many good ones about and plenty of Gann’s courses, so you can learn the basics and apply them easily.
There are also money managers who use Gann’s methods to trade and many have outstanding track records of success with 30% annualised gains and more. If you don’t want to trade yourself then this option is open to you.
Trading to build success and wealth:
In fact, you can do all your trades in under an hour a day, from the comfort of your own home. All you need is a computer and an internet connection and you are all set to build some serious wealth.
To trade Gann’s methods you need to confidence in them. As with all trading methods you will have losses and it is essential to have the discipline to stick with the system even during periods of losses.
Trading for a living with success is based around the following equation:
Trading method + Applied with discipline = Financial success
This may sound obvious, but 90% of investors can’t get the second part of the equation right. They can’t trade with discipline. They let their emotions dictate their trading moves and end up losing.
Gann removed this emotional component by only doing what his charts told him.
When the majority thought share prices would go on forever in 1929, Gann got ready for the crash! And you guessed it he made a killing in the markets.
Stand Alone from the crowd:
Gann was an individual he didn’t care what people thought of his methods and he didn’t care what people thought of his trades. He simply concentrated on building wealth $50 million dollars of wealth.
Gann can give you the methods and the tools, but only it’s up to you to use them to build wealth. Gann traded in isolation and you must to.
If you can apply the methods he created with discipline the path is open to you to be able to trade for a living.
You Have An Advantage Gann Didn’t:
You have computers where even computers with low specs contain more power than the computers that put man on the moon! We also have the greatest technological innovation ever: The Internet.
These tools can help you build wealth in under an hour a day. Take a look at Gann’s methods and you will see a route that could lead you to financial success to.
http://www.gann.co.uk
W D Gann is one of the most famous traders of all time.
If you have never looked at his trading methods then this article is for you.
Gann's innovative approach to trading is outlined in this article and we will give you an insight into how his trading methods can help you become a more profitable trader.
W D Gann was a technical trader and employed a team of draughtsmen to draw charts of stocks on the New York Stock Exchange, as well as numerous commodities.
He then studied these charts and his view was:
"What happened in the past will happen again"
Gann then looked at the patterns in these chart for trading opportunities.
Gann believed that markets were cyclical by nature and what had happened in the past would happen again.
The reason for this was, human nature and all areas of trading were subject to a recurring law, which repeated itself over time.
Trading Philosophy.
Gann was a prolific writer and presented his thoughts and trading techniques in numerous books and courses.
Some of his ideas were empirical studies, while many were mystical in nature. Gann’s view was that certain laws governed not only the markets, but nature as well, and were universal in scope.
Price and Time.
Gann’s most important contribution to the investing world was probably his concept of time and price and the interaction between the two.
Gann believed that crucial price movements occurred when price and time converged. These convergences usually indicated an important trend change was imminent and traders could trade for profit at these points.
If price and time were not in synch however, or did not converge, then time was always more important than price.
Time, was considered by Gann to be the ultimate timing indicator and he believed, all of nature was governed by time.
To quote Gann:
"Just remember one thing, whatever has happened in the past in the stock market and Wall Street will happen again"
Advances in bull markets will come in the future, and panics will come in the future, just as they have in the past. This is the working out of a natural law”
"It is action in one direction, and reaction in the opposite direction. In order to make profits, you must learn to follow the trend, and change when the trend changes.
" Trader psychology was one of the keys to repetitive price patterns in Gann's view.
Gann contributed many original ideas and innovative techniques such as:
Swing trading, Gann angles, the Fibonacci number sequence and the golden ratio and many more, but his major contribution to the investing world were his thoughts on investor psychology.
His insights into the emotions of hope, greed, and fear and how they caused traders to lose, are informative and support his theory of recurring market behaviour.
One of his most famous quotes was:
“We cannot escape it (emotion). In the future, it will cause another panic in stocks. When it comes, both traders and investors will sell stocks, as usual, after it is too late, or in the latter stages of a bear market”
He was fully aware that to succeed in trading investors needed to understand why other traders lose and to win a trader must become disciplined and trade without emotion.
“Therefore, in order to make a success, the trader must act in a way to overcome the weak points that have caused the ruin of others”
This is only a brief introduction to Gann, but his legacy lives on.
Today, many traders around the world, are still using his innovative trading methods to help them improve their trading performance.
W D Gann is one of the most interesting figures in trading history and all traders, novice or professional, can gain an extra edge in their trading by studying his methods.
Discover Gann for yourself and see how he can help you gain an extra edge in your trading for greater profitability.
http://www.gann.co.uk
In the entrance to the New York Stock Exchange, stands a life-sized picture of W D. Gann (1878 – 1955) and this is a testament to his standing amongst traders worldwide. Today he remains one of the most influential traders of all time.
W D Gann Methods and Trading Performance
W D Gann employed a staff of 25 draughtsmen to draw charts of all the stocks on the New York Stock Exchange, as well as a variety of commodities. He would then use the charts to look for trading opportunities.
Gann in fact made huge trading profits from his technical analysis of the markets.
There are reports, which indicate that his trading techniques amassed him a fortune of over $50 million dollars, and many of his trades are on record.
W D Gann Trading Philosophy
W D Gann was a prolific writer, and wrote extensively outlining his thoughts and trading methods in a series of books and courses. Some of his ideas were empirical studies, while others were more mystical in nature.
Gann’s major contention was that certain laws governed not only the markets, but nature as well, and were universal in scope.
The Influence of Price and Time
One of Gann’s most important contributions was the concept of combining price and time. Gann believed that crucial price movements happened when price and time converged. These points usually indicated an important trend change was imminent.
However, if price and time were not coordinated, or did not converge, then time always held priority over price.
Therefore time, was considered by Gann as the ultimate indicator, because all of nature was governed by time.
In “Wall Street Stock Selector” Gann said.
“Just remember one thing, whatever has happened in the past in the stock market and Wall Street will happen again.
Advances in bull markets will come in the future, and panics will come in the future, just as they have in the past. This is the working out of a natural law ”
“It is action in one direction, and reaction in the opposite direction. In order to make profits, you must learn to follow the trend, and change when the trend changes.”
Gann and the Importance of Trader Psychology
Many commentators focus on W D Gann’s thoughts on price and time, Swing trading methods, Gann angles, and his work with the Fibonacci number sequence.
However, you should not underestimate Gann’s analysis of trader psychology and his insights into the emotions of hope, greed, and fear.
Gann was well aware that emotions caused the bulk of traders to lose money:
“We cannot escape it (emotion). In the future, it will cause another panic in stocks. When it comes, both traders and investors will sell stocks, as usual, after it is too late, or in the latter stages of a bear market”
He was aware that human nature was constant and influenced the majority of traders:
“Therefore, in order to make a success, the trader must act in a way to overcome the weak points that have caused the ruin of others”
This is what W D Gann set out to do. It is a fitting tribute that successful traders around the world are still using his techniques and methods today. Without a doubt, many consider W.D. Gann to be one of the most influential traders of all time.
While the New Year opens under favourable conditions and you will hear much about great prosperity and the newspapers will be optimistic for the future, the bright outlook is likely to be clouded with war or complications in foreign countries. Trouble is threatened to the United States thru Mexico or Japan. Peace pacts are likely to be broken. Spain and France will arouse opposition. Agitation over religion in some of the foreign countries will disturb peaceful conditions.
Great storms are indicated in the south and south western parts of the United States during the early spring. Much loss and damage by fire. In March when President Hoover takes office, if some law has not already been passed, he will advocate having one passed to help the farmers. This will cause an advance in commodities and in turn help agricultural stocks. Airplane concerns will make rapid progress in the spring and from a panicky depressed stock market in February and March, a spring bull campaign will take place. Steel business will be quite active. Electrical concerns will do a large business and there will be a boom in oil stocks.
APRIL, MAY AND JUNE
The spring quarter indicates unfavourable weather for starting crops. Storms, rains, and danger of a tidal wave along the Gulf of Mexico. Commodity prices will advance and business in general will improve. A wild wave of speculation in oils, coppers, rubbers, sugars and airplane stocks will make this a very active period. Along in May or June, foreign competition will begin to hurt business in some lines in this country. This will cause a depressing effect on stocks and they will decline.
JULY, AUGUST AND SEPTEMBER
During this period, some of the foreign countries will prosper and we will have great competition to face. War or trouble with foreign countries, is threatened. A very mixed market during this period with some stocks advancing while others decline. Speculation will shift from stocks to commodities on account of short crops. Foreign crops will be short in some of the countries. Storms and unseasonable weather will cause damage.
August will be marked by many electric storms and damage by fire. Some new discoveries will help chemical stocks around this time. Germany and France will make great strides in aviation.
September: - A great change in business conditions will set in around this time which will cause a severe decline in the is stock market. Textile and woollen stocks will prosper and these will be among the last stocks to advance. During the months of April, August, September and October, there is danger of war and trouble thru foreign countries.
OCTOBER, NOVEMBER AND DECEMBER
Settlement of the debt question with France will again come to the front. Other countries will arrange some favourable agreement in regard to trade, which will cause business depression here. A great change in the business outlook will set in as we near the end of the year. Corporation earnings will show depreciation and be disappointing.
The month of October indicates some advance in mining stocks. The oil and sugar stocks will be among the last to advance around this time. During November the chemicals and oils will have a boom for a short time and make final top. In December foreign business with South American countries will be good, but we will have competition from some of the European countries.
MONTHLY INDICATIONS
JANUARY
The New Year starts off under favourable conditions, but profit taking will start and stocks will sell off sharply the first few days. Then food buying will appear and an advance will start. The oils, rubbers, chemicals, and airplanes will lead the advance, reaching top around the 12th to 15th. Around the 18th to 24th some rails, electrics and steels will advance. Some trouble in foreign countries, probably Germany or France, will have an unfavourable effect and will help to start the decline here. Watch for top; sell out long stocks and go short. Quite a decline will take place to the end of the month.
INDUSTRIAL STOCKS indicate extreme high for the month around the 12th to 15th; extreme lows around the 5th to 7th and 30th. Minor moves: - January 2nd decline should start; 5th to 7th bottom of decline. Heavy buying should start around this time and a sharp advance should take place-making top around the 12th. 19th bottom of decline; 24th top of rally; then follows heavy selling and a sharp decline, reaching bottom around the 30th.
RAILROAD STOCKS indicate extreme high for the month around the 15th; extreme low around the 5th to 7th and 30th. Minor moves - January 2nd top, when decline should start; 5th to 7th bottom for quite a rally; 15th top of strong rally, when another decline should start; 21st bottom of decline; 24th top of rally. From this top a big decline should take place reaching low for the month around the 30th.
Dates to watch for change in trend: - the dates marked “XX” are the most important and indicate a major change in trend. You should watch for important changes around these dates. The dates marked “X” only indicate minor changes in trend, which will only last for a few days. – January 5th – 7th XX, 11th – 12th X, 25th – 26th XX, 31st X.
FEBRUARY
Business will fall off and we will hear some discouraging reports. The Federal Reserve Bank will make some change or threaten to curb speculation. There will be talk of new banking laws, which may be adverse to speculation. The general list of high - priced stocks will decline this month, altho the market will be mixed. Sugars, rubbers and late movers will have some advances. The railroad, airplane, radio and electric stocks will rally from every decline. Around the 12th to 13th of the month some of the oils, rubbers and sugars will be quite strong. The general list of old time leaders; however, will work lower from every little rally.
INDUSTRIAL STOCKS indicate extreme high for the month around the 13th to 14th and extreme low around the 28th. Minor moves: 1st to 4th advance; then follows a decline to the 8th, when bottom should be reached for another quick rally; 13th to 14th top, sell out and go short. Expect heavy liquidation and a sharp, severe decline reaching bottom around the 28th for a moderate rally.
RAILROAD STOCKS indicate extreme high for the month around the 15th and extreme low around the 28th. Minor moves - 1st to 5th advance and make top for a moderate decline; 9th bottom of decline; expect quick rally in some rails, reaching high around the 15th, followed by a sharp decline making bottom around the 28th.
Dates to watch for change in trend: - 9th to 12th XX; 19th to 20th XX; 23rd to 24th X, 28th X
MARCH
Mr. Hoover will take the office of President of the United States this month and in the early part of the month there will be a demonstration in stocks and quite an advance, but it will not hold and a sharp, severe decline will take place in many stocks before the end of the month. Some trouble is likely to come up in connection with Spain or Mexico, which will upset the market. Airplane stocks will be quite strong during the dates indicated for advances to take place. The oils, sugars and chemicals will hold up better than other socks. Traction stocks will be strong and there is likely to be some development in connection with the subway fare, which will cause an advance in New York traction stocks. The steels, motors, rails and electrical issues will break during the early and latter part of the month.
INDUSTRIAL STOCKS indicate extreme high for the month around the 4th to 5th; extreme low around the 28th to 29th, although some stocks will reach low for the month around the 14th to 15th. Minor moves: 1st to 5th strong advance. The market will be discounting President Hoover’s inauguration. A sharp decline fo1lows, making first bottom around the 14th to 15th; then a quick rally in many stocks reaching top around the 20th, followed heavy liquidation and a sharp decline to around the 28th or 29th when final bottom will be reached for another bull campaign. This is the time to buy the stocks in strong position as they will have sharp advances and work higher into the summer.
RAILROAD STOCKS indicate extreme high for the month around the 4th to 5th; extreme low around the 9th to 11th and 28th - 29th. Minor moves: - 1st to 5th strong market. Stocks behind the market will lead the advance. From the top around the 4th to 5th quite a sharp decline will take place, culminating around the 9th to 11th; then follows a moderate rally reaching top around the 16th; then another decline, making final bottom around the 28th to 29th when you should buy the stocks in strong position for an advance which will last into the early days of May.
Dates to watch for change in trend: - 4th to 5th X; 10th to 11th XX; 16th X; 21st to 23rd X; 28th to 29th XX.
APRIL
The public will again come into the market on a large scale and there will be a wild wave of speculation, especially in the oils, coppers, rubbers, sugars and airplane stocks. The chemicals, airplanes and radio stocks will have rapid advances. Some action by the Government on law passed will cause a break, which will run down to around the 15th. Money rates will be quite high. 16th to 30th - - General news will be more favourable and stocks will have better advances. Foreign trade will increase, especially with the South American countries.
INDUSTRIAL STOCKS indicate extreme low for the month around the 12th to 13th and extreme high around the 20th to 22nd. Minor moves: - 1st to 3rd top of quick advance; 12th to 13th bottom for another big advance; 20th to 22nd top of sharp rally; then follows a decline making bottom around the 26th to 27th when stocks should be bought for another advance, running to the end of the month and continuing into May.
RAILROAD STOCKS indicate extreme low for the month around the 10th to 11th and extreme high around the 20th to 22nd, although they will be quite strong and some will make higher just at the end of the month. Minor moves: - 1st to 3rd - 4th quick advance; then follows a moderate decline, reaching bottom around the 10th to 11th, when a sharp advance will take place, stocks running up fast and making top around the 20th to 22nd, followed by a reaction to the 25th; then a strong advance to the end of the month.
Dates to watch for change in trend: - 2nd to 3rd X; 9th to 10th X; 13th to 15th XX; 21st to 23rd XX; 26th to 27th X.
MAY
This is a month for great activity in the stock market. We will hear some very bullish news about general business conditions. There will be some large combines, consummation of mergers; large financial deals will take place and there will be much talk of continued prosperity, all of which will cause the public to buy stocks at the top. General news will be very bullish and stocks will fluctuate over wide ranges. Some stocks will reach high around the early part of the month and have a break around the middle of the month. Where will be a boom in rubbers, sugars, oils, airplane, radio and electrical stocks? These will be the leaders. Watch for top and sell out. Do not overstay your market, as a big break will take place in June.
INDUSTRIAL STOCKS indicate extreme high for the month around the 29th to 31st and extreme low around the 9th to 10th. Minor moves: - 1st to 4th quick rally, making top for a sharp reaction; 9th to 10th bottom of decline; buy for another sharp advance; 16th top of rally, but only for a minor reaction; 20th - bottom of reaction. Stocks in strong position will have a rapid advance between the 10th and 29th. Watch for top around this time.
RAILROAD STOCKS indicate extreme high for the month around the 3rd to 4th; extreme low around the 11th to 13th, although some issues will go to extreme high around the end of the month. Minor moves; - 1st to 3rd strong market, making top around 3rd to 4th. Then follows a decline, making bottom around the 11th to 13th, followed by an advance making first top around the 25th for a moderate reaction to the 28th; then rally to the end of month.
Dates to watch for change in trend: - 3rd to 4th X; 9th to 10th XX; 22nd to 23rd X; 29th to 31st XX.
JUNE
A sharp decline and heavy liquidation in many stocks is indicated for this month. There will be war in foreign countries or war rumours. Strikes at home as well as abroad. Crop news will be unfavourable. Storms or earthquakes on the southern border and in Mexico will do damage and help to unsettle the market. The outlook for the summer business will be very much mixed. One of the major cycles and time factors runs out this month and a very important change in trend is indicated. High priced stocks will have rapid declines and many stocks will make extreme high for the year. The tin, oils and agricultural stocks and also the chemicals will break badly after reaching top in the early part of the month. Motors will also decline sharply.
INDUSTRIAL STOCKS indicate extreme high for the month around June 1st; extreme low around the 22nd to 24th. Minor moves: - 1st to 2nd advance and make top for a big decline; 10th to 11th bottom of sharp decline; then follows a moderate rally reaching top around the 17th, followed by heavy liquidation and sharp decline making bottom 22nd to 24th. From the 24th to the end of the month many stocks will have quite a rally.
RAILROAD STOCKS indicate extreme high for the month around the 3rd; extreme low around the 10th to 11th and 28th to 29th.
The rails will not move in a very wide range this month, except a few of the very high - priced issues. Minor moves: - 1st to 3rd advance; 4th to 10th - 11th sharp decline; then follows a moderate rally, reaching top around the 21st to 22nd followed by liquidation and lower prices, making bottom for the month 28th to 29th.
Dates to watch for change in trend: - June 1st to 2nd XX; 7th to 10th X; 21st to 23rd XX; 28th X.
JULY
Another advance will take place this month and many stocks will have sharp rallies and reach the final high for the year. The airplane companies will prosper and their stocks will advance. Electrical and chemical stocks will also record sharp advances. Pools will rush up stocks as fast as they can to unload. The late movers will be brought into line while distribution is taking place in the old time leaders. Sugars and rubbers should have some sharp advances. A very important major time factor ends at this time and indicates the starting of a big prolonged bear campaign. Remember that the last high for the year well occur in many stocks. A great deluge and panicky decline will follow the top at this time, resulting in a "Black Friday" in September. There are likely to be some labour troubles and strikes in the west and south, which will interfere with the business outlook.
INDUSTRIAL STOCKS indicate extreme high for the month around the 20th; extreme low around the 9th to 10th. Minor moves 1st to 3rd strong market, making top for a quick decline; 9th to 10th bottom of sharp decline; then follows a rapid advance, making top on the 20th; decline reaching bottom on the 22nd; followed by a strong market to the end of the month.
RAILROAD STOCKS: - The rails will move in a comparatively narrow range this month. Extreme low is indicated around the 9th to 10th and 22nd; extreme high around the 15th. Minor moves: - 1st to 3rd advance; then follows a decline making bottom around the 9th to 10th; a quick rally to the 15th; then follows a sharp decline reaching bottom on the 22nd, followed by an advance to the end of July.
Dates to watch for change in trend: - 3rd to 5th XX; 10th X; 21st to 24th XX; 30th to 31st X.
AUGUST
A few of the late movers will advance this month and reach final high. Chemical stocks will be among the last to advance. The steels and oils will be strong for a while and the sugars and rubbers will make final top. Unfavourable news will develop which will start sharp declines and the long bull campaign will come to a sudden end. Money rates will be high and final top will be reached for a big bear campaign. Stand from under! Don't get caught in the great deluge! Remember it is too late to sell when everyone is trying to sell. There will be electric storms, which will cause damage to crops, and heavy losses are indicated thru fires.
INDUSTRIAL STOCKS indicate extreme high for the month around the 7th to 8th; extreme low 29th to 30th. Minor moves: - The first of the month starts in strong and prices run up fast reaching top around the 7th to 8th; then heavy selling will take place and a sharp decline will follow, bottom being reached around the 16th to 17th, but only for a small rally; 23rd to 24th top of rally, followed by heavy liquidation and lower prices, making bottom for the month around the 29th to 30th.
RAILROAD STOCKS indicate extreme high for the month around the 8th to 9th, although some industrial stocks and rails among the late movers will hold up and not make top until the 14th to 15th as indicated on Curve #2. Extreme low for the month for rails indicated around the 30th to 31st. Minor moves: - 1st - advance will start and prices will run up fast, making top around the 8th to 9th; then follows a fast decline, reaching bottom around the 20th to 2lst followed by moderate rally to around the 25th; then a sharp decline making low for the month on the 30th to 31st.
Dates to watch for change in trend: - 7th to 8th XX; 16th to 17th X; 23rd to 24th XX; 29th to 30th XX.
SEPTEMBER
One of the sharpest declines of the year is indicated. There will be loss of confidence by investors and the public will try to get out after it is too late. Storms will damage crops and the general business outlook will become cloudy. War news will upset the market and unfavourable developments in foreign countries. A "Black Friday" is indicated and a panicky decline is stocks with only small rallies. The short side will prove the most profitable. You should sell short and pyramid on the way down.
INDUSTRIAL STOCKS indicate extreme high for the month around the 2nd to 3rd; extreme low 27th to 28th. Minor moves: - 2nd to 3rd top of moderate rally. Heavy liquidation will break out around this time. Unfavourable news will develop and a sharp, severe decline will take place, reaching first bottom around the 16th to 17th, but only for a small rally. 20th to 21st top of moderate rally followed by another heavy wave of liquidation, carrying prices down to extreme low levels around the 27th to 28th, from which level a moderate rally will follow.
RAILROAD STOCKS indicate extreme high for the month around the 3rd; extreme low at the end of the month. Minor moves: - 1st to 3rd advance. Liquidation will start around this time and a sharp decline will follow, carrying prices down to around the 16th - 7th; then a moderate rally on short covering with top around the 23rd - 24th, followed by a sharp decline running down to the end of the month.
Dates to watch for change in trend: - September 2nd to 3rd XX; 16th to 17th XX; 21st to 24th X; 27th to 28th XX.
0CTOBER
General business conditions will be getting worse and the country will suffer from the over - speculation. Money rates will be high and bankers will call loans, causing some sharp declines in stocks after rallies. The chemical, electrical and airplane stocks will hold up and have some quick rallies.
INDUSTRIAL STOCKS indicate extreme high around the 18th to 19th; extreme low around the 8th to 9th and 26th to 28th. Minor moves: - October 2nd top of small rally from which a sharp decline will take place; 8th to 9th bottom of decline, when a better advance will take place, especially in the stocks in strong position; 18th to 19th top of rally. Stocks in weak position will have a sharp decline, running down to the 26th to 28th; then. follows a moderate rally to the end of the month.
RAILROAD STOCKS indicate extreme high for the month around the 10th to 11th; extreme low 23rd - 24th. Minor moves: - 1st to 4th decline and make bottom for a moderate rally; 10th to 11th top of rally; then follows a heavy wave of liquidation and lower prices making bottom around the 23rd to 24th, followed by a moderate advance to the end of the month.
Dates to watch for change in trend: - 2nd to 4th XX; 8th to 9th X; 18th to 20th XX; 26th to 28th X.
N0VEMBER
The oils, chemicals and rubbers will have a final advance this month and make top for another decline. Business conditions will be growing more unfavourable. There are likely to be earthquakes in Mexico or California. This will disturb the stock market and depress business. This is the month for war news from foreign countries and some great leader abroad will show his power. The latter part of the month is very unfavourable and some sharp declines will take place. But the airplane, radio and electrical companies and some of the rails will have an advance around the 10th to 22nd.
INDUSTRIAL STOCKS indicate extreme high for the month around the 2nd to 4th; extreme low around the 23rd to 25th. Minor moves: - follows heavy selling and a sharp decline, reaching bottom around the 11th to 12th, but only for a moderate rally; 18th to 19th top of advance. From this level there will be another sharp, severe decline carrying prices down to low levels around the 23rd to 25th. Then follows a moderate rally to the end of the month.
RAILROAD STOCKS indicate extreme high for the month around, the 21st to 22nd; extreme low around the 27th to 28th.Minor moves; - 1st to 2nd top of moderate rally; then follows a decline, reaching bottom around the 9th to 11th; then a quick rally, making top around the 21st to 22nd followed by heavy liquidation and a sharp decline, making bottom around the 27th to 28th.
Dates to watch for change in trend: - 1st to 2nd XX; 11th to 13th X; 17th to 19th XX; 24th to 26th X.
DECEMBER
Our business in some of the foreign countries will increase. Speculation will shift from stocks to commodities. The U. S. Government is threatened with great opposition, if not danger of war. General business outlook will grow very much more unfavourable Panicky declines in stocks will take place.
INDUSTRIAL STOCKS indicate extreme high for the month around the 2nd; extreme low around the 23rd to 24th. Minor moves: - 1st to 2nd advance; then follows a sharp, severe decline and heavy liquidation with only small rallies indicated lasting one to two days, reaching extreme low around the 23rd to 24th; then follows a quick rally reaching top on the 28th followed by decline to the 31st.
This year occurs in a cycle, which shows the ending of the bull market and the beginning of a prolonged bear campaign. The present bull market campaign has lasted longer than any previous campaign in the history of this country. The fact that it has run longer and prices have advanced to such abnormal heights means that when the decline sets in, it must be in proportion to the advance. The year 1929 will witness some sharp, severe panicky declines in many high priced stocks.
The history of the stock market has always been that it discounts prosperity and that in doing so prices always advance too far. In other words, the stock market runs too far ahead of prosperity and the first decline is only a readjustment back to what stocks should sell according to their merit and investment return. Then, when business depression sets in and earnings start to show a falling off, stock prices continue to go lower, discounting unfavourable business conditions.
But such groups of stocks as the oils, sugars, rubbers and some of the agricultural stocks, which have been depressed and declined while other stocks advanced, will record much higher prices in 1929. New and popular industries will continue to prosper, such as, radio, airplane, chemical and electrical concerns. This is the electrical age. People take quickly to new inventions, especially those which provide for the convenience and comfort of living. This will increase the earnings of concerns manufacturing new electrical appliances.
Many stocks will be distributed and will work lower while the stocks in strong position work higher. With such a varied list of stocks representing so many industries in different parts of the country, it is not reasonable to suppose that they would follow the same trend by any means.
More and more business is getting into the lines of mass production, mergers and consolidation. The big companies are getting the business while the smaller companies find it harder to get business enough to return a fair amount on their capital stock.
During the early part of the year, business conditions will not be up to general hopes and expectations. In the spring and summer, business will improve and the outlook generally will be cheerful. But again in the fall of the year, depression will set in and unfavourable business conditions will cause big declines in stocks. Money rates will be high the greater part of the year.
During the year 1928, the public has entered the stock market on the largest scale ever known in history. Foreigners have bought our stocks more than at any time since or prior to the outbreak of the World War. The American public is no longer making safe investments in stocks. They have the gambling fever and are buying everything regardless of price, simply buying on hope that stocks will continue to go up. This is a dangerous situation and has always resulted in a big decline. There will be no exception in this case.
The man who makes money buying stocks in 1929 will have to use greater discrimination than ever before in selecting the right stocks to buy. When once stocks have reached final top and start on the way down, they will continue to work lower and rallies will get smaller. Those who hold on and hope will have big losses. The markets will move over a very wide range and sharp, severe declines will be followed by quick rallies. It will be necessary most of the time for a trader to be very nimble and change position quickly in order to take advantage of the opportunities as they develop in an active market.
Sunday, December 17, 1922
GANN FORETOLD RUN OF STOCKS
Wall Street Scientist Forecasted Top of Bull Market 1-Year in Advance.
HIS INDICATIONS UNCANNY
by: ARTHUR ANGY
(Financial Editor, The North Side News)
W.D. Gann has scored another astounding hit in his 1922 stock forecast issued in December 1921. The forecast called for first top of the bull wave in April, second top in August, and the final top and culmination of the bull market October 8 to 15, and strange as it may seem, the average prices of twenty industrial stocks reached the highest point on October 14 and declined 10 points in thirty-days after that date.
Mr. Gann predicted a big decline for the month of November. He said in the 1922 forecast - "November 10-14 panicky break." During this period stocks suffered a sever decline, many falling 10 points or more in four days and on November 14 lowest average prices were made with 1,500,00 shares traded in on the New York Stock Exchange.
I found his 1921 forecast so remarkable that I secured a copy of his 1922 stock forecast in order to prove his claims for myself. And now, at the closing of the current year in 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.
The North Side News stands for a clean Wall Street and has rendered a great public service in helping to rid Wall Street of the bucket shop evil by publishing a series of articles in conjunction with the Magazine of Wall Street. We believe in banding a fake, and we believe in giving credit where due.
GANN NO TIPSTER
W. D. Gann is no "Wall Street tipster" sending out market letters and so-called-inside information - Mr. Gann's results are obtained by profound study of supply and demand, a mathematical chart of money, business and commodities. He determines when certain cycles are due, and the order and the time when market movements will follow.
During the past thirty years many men have proclaimed discoveries and theories to "beat the Wall Street game," most of which resulted in loss to their followers. They could always tell by the chart just why the market did it after it happened. Mr. Gann's theory differs from the others in that he tells months in advance what stocks are going to do.
His forecast stated that some stocks would make high this year in April, some in August and others in October - the month when he predicted the bull movement would culminate. Of a list of a hundred stocks; thirty made highest price in April and many declined, while others continued higher, twenty made high during August, and fifty made high of the year in October. from which the largest decline of the year has taken place.
His 1922 forecast indicated final tops on railroad stocks for August 14. The Dow Jones's averages on rails made high August 21 and reached the same average levels on September 11 and October 16, but did not exceed the high made in August, which was made seven days later than the exact date called for in the forecast.
HIS CHART A FACT
Stock Market accurate long-range forecasting, as W. D. Gann is doing, sounds almost unbelievable, and how he does it I do not know, but the writer does know that he does it. My attention was first called to his 1921 Market Forecast, in which he predicted stocks would be bottom in August, 1921, and advance to December, 1921. They did so. His chart or graph of the market one year in advance is a fact, and that the course of the stock market follows it astoundingly close is equally a fact.
Mr. W. D. Gann says the trouble with most chart makers is that they work with only one factor - space movements or charts which record one to two points up or down - whereas there are three or more factors to be considered, space, volume and time. The most vital is time, and back of that is the cause of recurrence of high or low prices at certain intervals.
I asked Mr. Gann: "What is the cause behind the time factor?"
He smiled and said: "It has taken me twenty years of exhaustive study to learn the cause that produces effects according to time. That is my secret and too valuable to be spread or broadcast. Besides, the public is not yet ready for it."
"Water seeks its level," continued Mr. Gann. "You can force it higher with a pump, but when you stop pumping it requires no force to cause it to return to its former level. Stocks and Commodities are the same. They can be forced above their natural level of values to where lambs lose all fear, become charged with hope and buy at the top. Then stocks are permitted to sink to a level where hope gives way to despair and the most rampant bull becomes a bear and sells out at a loss. My discovery of the time-factor enables me to tell in advance when these extremes must, by the law of supply and demand, occur in stocks and commodities."
THE TICKER AND INVESTMENT DIGEST
(later became the Wall Street Journal)
Vol. 5 DECEMBER 1909 No.2
William D. Gann
An Operator Whose Science and Ability Place Him in the Front Rank
His Remarkable Predictions and Trading Records.
Sometime ago the attention of this magazine was attracted by certain long pull Stock Market predictions which were being made by William D. Gann. In a large number of cases Mr. Gann gave us, in advance, the exact points at which certain stocks and commodities would sell, together with prices close to the then prevailing figures which would not be touched.
For instance, when the New York Central was 131 he predicted that it would sell at 145 before 129. So repeatedly did his figures prove to be accurate, and so different did his work appear from that of any expert whose methods we had examined, that we set about to investigate Mr. Gann and his way of figuring out these predictions, as well as the particular use which he was making of them in the market.
The results of this investigation are remarkable in many ways.
It appears to be a fact Mr. W, D. Gann has developed an entirely new idea as to the principles governing stock market movements. He bases his operations upon certain natural laws which, though existing since the world began, have only in recent years been subjected to the will of man and added to the list of so-called modern discoveries. We have asked Mr. Gann for an outline of his work, and have secured some remarkable evidence as to the results obtained there from.
We submit this in full recognition of the fact that in Wall Street a man with a new idea, an idea which violates the traditions and encourages a scientific view of the Proposition, is not usually welcomed by the majority, for the reason that he stimulates thought and research. These activities the said majority abhors.
W. D. Gann's description of his experience and methods is given herewith. It should be read with recognition of the established fact that Mr. Gann's predictions have proved correct in a large majority of instances.
"For the past ten years I have devoted my entire time and attention to the speculative markets. Like many others, I lost thousands of dollars and experienced the usual ups and downs incidental to the novice who enters the market without preparatory knowledge of the subject."
"I soon began to realize that all successful men, whether Lawyers, Doctors or Scientists, devoted years of time to the study and investigation of their particular pursuit or profession before attempting to make any money out of it."
"Being in the Brokerage business myself and handling large accounts, I had opportunities seldom afforded the ordinary man for studying the cause of success and failure in the speculations of others. I found that over ninety percent of the traders who go into the market without knowledge or study usually lose in the end."
"I soon began to note the periodical recurrence of the rise and fall in stocks and commodities. This led me to conclude that natural law was the basis of market movements. I then decided to devote ten years of my life to the study of natural law as applicable to the speculative markets and to devote my best energies toward making speculation a profitable profession. After exhaustive researches and investigations of the known sciences, "I discovered that the law of vibration enabled me to accurately determine the exact points at which stocks or commodities should rise and fall within a given time."
The working out of this law determines the cause and predicts the effect long before the street is aware of either. Most speculators can testify to the fact that it is looking at the effect and ignoring the cause that has produced their losses.
"It is impossible here to give an adequate idea of the law of vibrations as I apply it to the markets. However, the layman may be able to grasp some of the principles when I state that the law of vibration is the fundamental law upon which wireless telegraphy, wireless telephone and phonographs are based. Without the existence of this law the above inventions would have been impossible."
"In order to test the efficiency of my idea I have not only put in years of labour in the regular way, but I spent nine months working night and day in the Astor Library in New York and in the British Museum of London, going over the records of stock transactions as far back as 1820. I have incidentally examined the manipulations of Jay Gould, Daniel Drew, Commodore Vanderbilt & all other important manipulators from that time to the present day. I have examined every quotation of Union Pacific prior to & from the time of E. H. Harriman, Mr. Harriman's was the most masterly. The figures show that, whether unconsciously or not, Mr. Harriman worked strictly in accordance with natural law."
"In going over the history of markets and the great mass of related statistics, it soon becomes apparent that certain laws govern the changes and variations in the value of stocks, and that there exists a periodic or cyclic law which is at the back of all these movements. Observation has shown that there are regular periods of intense activity on the Exchange followed by periods of inactivity."
Mr. Henry Hall in his recent book devoted much space to "Cycles of Prosperity and Depression," which he found recurring at regular intervals of time. The law which I have applied will not only give these long cycles or swings, but the daily and even hourly movements of stocks. By knowing the exact vibration of each individual stock I am able to determine at what point each will receive support and at what point the greatest resistance is to be met.
"Those in close touch with the market have noticed the phenomena of ebb and flow, or rise and fall, in the value of stocks. At certain times a stock will become intensely active, large transactions being made in it; at other times this same stock will become practically stationary or inactive with a very small volume of sales. I have found that the law of vibration governs and controls these conditions. I have also found that certain phases of this law govern the rise in a stock and an entirely different rule operates on the decline."
"While Union Pacific and other railroad stocks which made their high prices in August were declining, United States Steel Common was steadily advancing. The law of vibration was at work, sending a particular stock on the upward trend whilst others were trending downward."
"I have found that in the stock itself exists its harmonic or inharmonious relationship to the driving power or force behind it. The secret of all its activity is therefore apparent. By my method I can determine the vibration of each stock and also, by taking certain time values into consideration, I can, in the majority of cases, tell exactly what the stock will do under given conditions."
"The power to determine the trend of the market is due to my knowledge of the characteristics of
each individual stock and a certain grouping of different stocks under their proper rates of vibration. Stocks are like electrons, atoms and molecules, which hold persistently to their own individuality in response to the fundamental law of vibration. Science teaches that 'an original impulse of any kind finally resolves itself into a periodic or rhythmical motion; also, just as the pendulum returns again in its swing, just as the moon returns in its orbit, just as the advancing year over brings the rose of spring, so do the properties of the elements periodically recur as the weight of the atoms rises."
"From my extensive investigations, studies and applied tests, I find that not only do the various stocks vibrate, but that the driving forces controlling the stocks are also in a state of vibration. These vibratory forces can only be known by the movements they generate on the stocks and their values in the market. Since all great swings or movements of the market are cyclic, they act in accordance with periodic law."
"Science has laid down the principle that the properties of an element are a periodic function of its atomic weight. A famous scientist has stated that 'we are brought to the conviction that diversity in phenomenal nature in its different kingdoms is most intimately associated with numerical relationship. The numbers are not intermixed accidentally but are subject to regular periodicity. The changes and developments are seen to be in many cases as somewhat odd."
Thus, I affirm every class of phenomena, whether in nature or on the stock market, must be subject to the universal law of causation and harmony. Every effect must have an adequate cause.
"If we wish to avert failure in speculation we must deal with causes. Everything in existence is based on exact proportion and perfect relationship. There is no chance in nature, because mathematical principles of the highest order lie at the foundation of all things. Faraday said, "There is nothing in the universe but mathematical points of force."
"Vibration is fundamental: nothing is exempt from this law. It is universal, therefore applicable to every class of phenomena on the globe."
Through the law of vibration every stock in the market moves in its own distinctive sphere of activities, as to intensity, volume and direction; all the essential qualities of its evolution are characterized in its own rate of vibration. Stocks, like atoms, are really centres of energy; therefore, they are controlled mathematically. Stocks create their own field of action and power: power to attract and repel, which principle explains why certain stocks at times lead the market and 'turn dead' at other times. Thus, to speculate scientifically it is absolutely necessary to follow natural law.
"After years of patient study I have proven to my entire satisfaction, as well as demonstrated to others, that vibration explains every possible phase and condition of the market."
In order to substantiate Mr. W. D. Gann's claims as to what he has been able to do under his method, we called upon Mr. William E. Gilley, an Inspector of Imports, 16 Beaver Street, New York. Mr. Gilley is well known in the downtown district. He himself has studied stock market movements for twenty-five years, during which time he has examined every piece of market literature that has been issued & procurable in Wall Street. It was he who encouraged Mr. Gann to study the scientific and mathematical possibilities of the subject. When asked what had been the most impressive of Mr. Gann's work and predictions, he replied as follows :
"It is very difficult for me to remember all the predictions and operations of W. D. Gann which may be classed as phenomenal, but the following are a few. "In 1908 when the Union Pacific was 168-1/8, he told me it would not touch 169 before it had a good break. We sold it short all the way down to 152-5/8, covering on the weak spots and putting it out again on the rallies, securing twenty-three points profit out of an eighteen-point market wave."
"He came to me when United States Steel was selling around 50, and said, "This steel will run up to 58 but it will not sell at 59. From there it should break 16 points." We sold it short around 58 with a stop at 59. The highest it went was 58. From there it declined to 41-17 points."
"At another time, wheat was selling at about 89¢. Gann predicted that the May option would sell at $1.35. We bought it and made large profits on the way up. It actually touched $1.35."
"When Union Pacific was 172, he said it would go to 184-7/8 but not an eighth higher until it had a good break. It went to 184-7/8 and came back from there eight or nine times. We sold it short repeatedly, with a stop at 185, and were never caught. It eventually came back to 17."
"Mr. Gann's calculations are based on natural law. I have followed Gann and his work closely for years. I know that he has a firm grasp of the basic principles which govern stock market movements, and I do not believe any other man can duplicate the idea or his method at the present time."
"Early this year, he figured that the top of the advance would fall on a certain day in August and calculated the prices at which the Dow Jones Averages would then stand. The market culminated on the exact day and within four-tenths of one percent of the figures predicted."
"You and W D Gann must have cleaned up considerable money on all these operations," was suggested.
"Yes, we have made a great deal of money. Gann has taken half-million dollars out of the market in the past few years. I once saw him take $130, and in less than one month run it up to over $12,000. Gann can compound money faster than any man I have ever met."
"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 below $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 calculation. 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 higher in the very last hour of trading, closing at that figure."
So much for what W D Gann has said and done as evidenced by himself & others. Now as to what demonstrations have taken place before our representative :
During the month of October, 1909, in twenty-five market days, W D Gann made, in the presence of our representative, two hundred and eighty-six transactions in various stocks, on both the long and short side of the market. Two hundred and sixty-four of these transactions resulted in profits ; twenty-two in losses.
The capital with which he operated was doubled ten times, so that at the end of the month he had one thousand percent of his original margin.
In our presence Mr. William D. Gann sold Steel common short at 94-7/8, saying that it would not go to 95. It did not.
On a drive which occurred during the week ending October 29, Mr. Gann bought U.S. Steel common stock at 86-1/4, saying that it would not go to 86. The lowest it sold was 86-1/3.
We have seen Gann give in one day sixteen successive orders in the same stock, eight of which turned out to be at either the top or the bottom eighth of that particular swing. The above we can positively verify.
Such performances as these, coupled with the foregoing, are probably unparalleled in the history of the Street.
James R. Koene has said, "The man who is right six times out of ten will make a fortune." Gann is a trader who, without any attempt to make a showing, for he did not know the results were to be published, established a record of over ninety-two percent profitable trades.
Mr. W. D. Gann has refused to disclose his method at any price, but to those scientifically inclined he has unquestionably added to the stock of Wall Street knowledge and pointed out infinite possibilities.
We have requested Mr. Gann to figure out for the readers of the Ticker a few of the most striking indications which appear in his calculations. In presenting these we wish it understood that no man, in or out of Wall Street, is infallible.
William D Gann's figures at present indicate that the trend of the stock market should, barring the usual rallies, be toward the lower prices until March or April 1910.
He calculates that May Wheat, which is now selling at $1.02, should not sell below 99¢, and should sell at $1.45 next spring.
On Cotton, which is now at about 15¢ level, he estimates that after a good reaction from these prices the commodity should reach 18¢ in the spring of 1910. He looks for a corner in the March or May option.
Whether these figures prove correct or not will in no way detract from the record which W. D. Gann has already established.
William Delbert Gann was born in Lufkin, Texas, and is thirty-one years of age. He is a gifted mathematician, has an extraordinary memory for figures, and is an expert Tape Reader. Take away his science and he would beat the market on his intuitive tape reading alone.
Endowed as he is with such qualities, we have no hesitation in predicting that, within a comparatively few years, William D. Gann will receive recognition as one of Wall Street's leading operators.
Note: Since the market forecast was made, Coffee has suffered the expected decline, the extreme break having been 120 points. The lowest on the May wheat thus far has been $1.01-5/8. It is now selling at $1.06-1/4.
If you had been a businessman travelling across Texas in 1891, you might have bought a newspaper and a couple of cigars from a tall, lanky 13-year-old selling them on your train. And as you talked with your fellow travellers about investments, you might have noticed the youth eavesdropping intently on your conversation.
If you had asked him, the boy might have told you his name was Willy and, yes, he was interested in commodities. His dad was a farmer in Angelina County, and just about everyone he knew was as well. They were all concerned about the price their cotton would bring. And had you inquired whether young Willy also wanted to till the East Texas soil when he got older, he might have said no, he didn't think so: he wanted to be a businessman. "Well, good luck, young Willy," you might have said. "Maybe you'll have your own business some day, maybe you'll even be famous. Who knows? No one can predict the future." The young eavesdropper going up and down the aisles of that train was William Delbert Gann. Was it really true, he might have wondered, that no one can predict the future?
W. D Gann was born on a farm some seven miles outside of Lufkin, Texas, on June 6, 1878. He was the firstborn of 11 children two girls and eight boys of Sam Houston Gann and Susan R. Gann. The Gann's lived in a too small house with no indoor plumbing and with not much of anything else. They were poor, and young Willy walked the seven miles into Lufkin for three years to go to school.
But the work he could do on the farm was more important to the family, so W. D. never even graduated from grammar school or attended high school. As the eldest boy, he had a special responsibility, and those years working on the farm may have been the beginning of his lifelong dedication to hard work. His religious upbringing as a Baptist may also have had something to do with it, for his faith stayed with him throughout his life as well.
A few years later W.D. worked in a brokerage in Texarkana and attended business school at night. He married Rena May Smith, and two daughters, Macie and Nora, were born in the first few years of the new twentieth century. WD made the fateful move to New York City in 1903 at the age of 25.
Working most likely at a major Wall Street brokerage, W.D. made other changes in his life as well. He divorced his Texas bride and in 1908 at the age of 30 married a 19-year-old colleen named Sarah Hannify. W.D. and Sadie had two children--Velma, born in 1909 and W.D.'s only son, John, who arrived six years later. In addition, Macie and Nora came to live with their father and were raised in New York by their Irish stepmother.
During the First World War the family moved from Manhattan to Brooklyn first to Bay Ridge, then to Flatbush. W. D. reportedly predicted the November 9, 1918 abdication of the Kaiser and the end of the war. But it was after the armistice that the fortunes of the Ganns of Brooklyn took their most dramatic turn. The W. D. that traders know today emerged in the Roaring Twenties.
In 1919 at the age of 41, W. D. Gann quit his job and went out on his own. He spent the rest of his life building his own business. He began publishing a daily market letter, the Supply and Demand Letter. The letter covered both stocks and commodities and provided its readers with annual forecasts. Forecasting was an activity with which W.D. had become fascinated. The young business prospered, and three years later W.D. Gann became a homeowner, buying a small house on Fenimore Street in his adopted home of Brooklyn. The market letter led to more ambitious publishing. In 1924 W.D.'s first book, Truth of the Stock Tape , was published.
A pioneering work on chart reading, it is still regarded by some as the best book ever written on the subject. An individualist and ambitious hard worker, W.D. self-published Truth through his new Financial Guardian Publishing Company. He personally wrote his own ads to market it and negotiated with bookstores to carry it. 'Truth was praised by The Wall Street Journal and sold well for years. Some consider it the best of his many books. For a first effort it was a significant accomplishment.
His market forecasts during the twenties were reportedly 85 percent accurate. But W. D. didn't confine his prognostications to prices. It was widely reported he predicted the elections of Wilson and Harding and, indeed, of every president since 1904. At age 49, W. D. Gann wrote what is perhaps his most unusual book, the 1927 Tunnel Through the Air . It is a prophetic work of fiction, not a genre every Wall Street analyst dabbles in. But W.D. Gann was one of a kind. The book is perhaps best known for having predicted that attack on the United States by Japan and an air war between the two powers. Though Tunnel may have had little to offer investors, it was well-publicized and enhanced its author's growing reputation.
The market in the 1920's seemed to be defying the law of gravity, but W.D. Gann didn't think it could last forever. In his forecast for 1929, he predicted the market would hit new highs until early April, then experience a sharp break, then resume with new highs until September 3. Then it would top and afterward would come the biggest market crash in its history. We all know what happened.
W. D. Gann prospered during the Depression, which he predicted would end in 1932. He acquired seats on various commodities exchanges, traded for his own account, wrote Wall Street Stock Selector in 1930 and New Stock Trend Detector in 1936. He continued making remarkably accurate forecasts as well as some less successful ones like the electoral defeat of FDR. He developed a new interest in investing in Florida real estate. He became a small-scale home-builder in Miami as well as the owner of a block of stores on the Tamiami Trail.
He also became airborne. He bought a plane in 1932 so he could fly over crop areas making observations to use in his forecasts. He hired Elinor Smith, a noted 21-year-old aviator, to fly him around. The novelty of his high-flying research--W.D. was the first to study markets in this way--helped keep him in the spotlight.
W. D. Gann's son John Gann also went into the securities business in 1936 at the age of 21. A year later he went to work for his dad until in 1941 his Uncle Sam announced he had plans for the young man in Europe. Back in Brooklyn, Sadie had health problems for some time and died at age 53 in 1942. Then after 20 years on Fenimore Street, an aging W.D. Gann moved to Miami for reasons both of health and personal preference. His How to make Profits in Commodities came out the same year.
He kept his business in New York, relying on his long-time personal secretary. In Miami he continued studying the market, trading, real estate investing, and instructing students. The next year at the age of 65, when most are thinking retirement, W.D. decided he'd get married and did, to a much younger woman.
Son John worked on W. D. Gann's business in New York briefly after the war, then left to pursue his own interests in the Industry. The two differed in their approach to the market. John L. Gann pursued a successful lifetime career with Wall Street's major brokerage house until his passing in 1984.
The post-war years saw Gann start taking it easier. He published 45 Years in Wall Street in 1949. He sold his business to Joseph Lederer, a fellow student of the market. Around the same time he also separately sold the rights to all his books to Edward Lambert. He continued, however, to study, teach, and trade. He was made an honorary member of the International Mark Twain Society in 1950.
In 1954 he suffered a heart attack. A year later advanced stomach cancer was discovered. The doctors operated, but W. D. Gann failed to recover. He died in June, 1955, at the age of 77. He was buried with his second wife in Green-Wood Cemetery in Brooklyn at a location that looks toward Wall Street. It was a fitting location since he had studied the Street all his adult life.
In 1995, 40 years after his passing, William D. Gann is still talked about, written about, and studied avidly. It's an extraordinary testimonial to his work and one that even W.D. couldn't have predicted. Or could he? What lessons might there be in this remarkable man's life?
First is an affirmation of the American Dream. William Delbert Gann of Lufkin, Texas, started with nothing. He and his family had no money, no education, and no prospects. But less than 40-years after overhearing businessmen talk on railroad cars in Texas, W.D. Gann was known around the world.
Second, hard work pays. W. D. Gann rose early, worked late, and approached his business with great energy. Virtually all his education was self-administered. This teacher, writer, and prescient forecaster had a third-grade formal education. But he never stopped reading.
Third, unconventional thinking may have its merits. W.D. was intellectually curious to an extraordinary degree. He was unafraid of unorthodox ideas, whether in finance or in other areas of life. He wasn't always right--none of us are--but he dared to pursue a better idea.
Fourth, there may be something to that clean living business after all. A conservative Baptist, W.D. didn't smoke, drink, play cards, or dance. He was serious in demeanour and a conservative dresser, although he lightened up somewhat in his later years. He respected the value of a dollar and was prudent in his personal spending. Not every internationally acclaimed seer would continue to live in a modest house in Brooklyn.
The Remarkable WD GannArticle by John L. Gann Jr. the grandson of WD Gann
Fifth, faith helps. W. D. Gann studied the Bible all his life. It was his Book of Books. His own last book, The Magic Word , published in 1950, strongly reflects this devotion.
And finally, the only lesson for traders I will venture to offer is W.D. Gann never stopped studying the market. Even after his forecasts happened, even after he achieved international acclaim. Although he believed in cycles, he also knew that markets are always changing and that decisions must be made based on today's conditions, not yesterday's.
W.D. might have rested on his laurels. But he kept studying and seeking greater understanding. If he couldn't afford to stop, can any trader afford to do so?
John L. Gann, Jr., is the grandson of William D. Gann. Most of the information in this article comes from W.D. Gann's son, the late John L. Gann, to whom this article is dedicated. The information herein is believed to be correct but no assurance of accuracy is offered.
According to Robert W. Colby, in The Encyclopedia of Technical Market Indicators, page 108, Gann "intensely applied astrology to market timing." At one point, Gann studied Indian sidereal astrology in India. In fact, the famous Gann wheel was first used by tea merchants in seventeenth century India. For further reading on the subject of the connection between Gann and Astrology see:
How to Win as a Stock Market Speculator, by Alexander Davidson, page 253-255.
The life and work of W.D.Gann, by Solomon Thallon, page 1.
The Fated Sky, Astrology in History, Benson Bobrick, page 308.
Pattern, Price & Time: Using Gann Theory in Trading Systems, by James A. Hyerczyk, page 19.
The Encyclopedia of Technical Market Indicators, by Robert W. Colby, page 108.
New Thinking in Technical Analysis: Trading Models from the Masters, by Rick Bensignor, page 14.
Predicting the Future: An Introduction to the Theory of Forecasting, by Nicholas Rescher, page 23.
The Technical Analysis of Stocks, Options and Futures, by William F. Eng, page 345, 371.
Books and Articles by W D Gann
Tunnel Thru The Air, or looking back from 1940
Truth of The Stock Tape
Wall Street Stock Selector
How to Make Profts Trading in Commodities
45 Years in Wall Street
Magic Word
How to Make Profits Trading In Puts And Calls (an early text on trading options)
The Gann Wheel, what most people think of as the Square of Nine, is sometimes called a "Square Root Calculator" or a device that "Squares the Circle." This simple illustration may explain how and why these terms came about. You probably recognize that the illustration is just the first few rings of a Gann Wheel with the numeral "1" at the center.
31
32
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34
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30
13
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15
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38
29
12
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5
18
39
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1
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19
40
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In Square of Nine parlance we say things like 19 is 90 degrees from 15. That makes sense only if you can visualize that this rectangular table of numbers is enclosed in a circle (or series of circles) of 360 degrees. In this case, the number 19 is 1/4 the way around the circle from the number 15, or 90 degrees in circumference from 15. The number 34 is directly above the number 15 and positioned one circumference or ring outside the circle that contains the number 15. In the same sense that we can say that 19 is 90 degrees from 15, we can say that 34 is 360 degrees from 15, or one complete rotation of the circle from 15. So, that explains where squaring the circle comes from. A more accurate expression would be that we're circling the square but that never did catch on.
HOW TO ROTATE AROUND THE GANN WHEEL
Here's where it gets fun. The square root of 15 is 3.87. Add two to the square root of 15 and we get 5.87. Square 5.87 and we get 34.49 which rounds to 34. Now we know that adding two to the square root of a number and squaring that sum is the same thing as a 360 degree rotation up on the Gann Wheel. If "2" represents a 360 degree rotation then "1" represents a 180 degree rotation, "0.5" a 90 degree rotation, and so on. W.D. Gann tells us that 90 degrees in very important in the stock market. What he's really saying is that adding and subtracting .5 (and exact multiples or proportions of .5) to the square root of a stock price and then squaring the result is very important! We acknowledge that there is is another school of Gann thought that will say that Gann's reference to 90 degrees relates to the movement of celestial bodies. We've looked into that and they may be right, but for our purposes we've also learned that these schools of thought can peacefully exist alongside each other without contradiction. A very few people have been using some variation of the Gann Wheel for about 100 years now. In his famous interview given to Richard D. Wyckoff in 1909, W.D. Gann attributed market movements to some undefined "law of vibration." People can disagree about what W.D. Gann meant by that but we, at least, are fairly certain he was talking about the principles underlying the Square of Nine.
WHAT IS SO SPECIAL ABOUT THE SQUARE OF NINE ?
The Square of Nine is unique because unlike every other method of tecnhical analysis, the Square of Nine is totally indifferent to whether the input variable is a price, a range of prices, or a number of trading days or calendar days. They are all the same and completely interchangeable. Say what? That can be a little hard to get your brain around after spending years studying chart patterns, exotic moving averages, and oscillators. That's the beauty of it. Price and time become interchangeable by converting them to degrees of a circle. Squares and square roots are part of that process. Once price and time are conceptualized only as degrees of concentric circles we could care less about their actual magnitude. At that point we care only about their orbital relationship. Are they in opposition, conjunction or square? You will find that almost every significant high or low pivot point is indeed in opposition, conjunction or square to a previous price, range or time. You can see a recent example of price-to-price relationships in our Square Root Theory article. Other possible relationships are price-to-time, range-to-price, time-to-range, and so on.
Is this what W.D. Gann meant in that Wyckoff interview when he said "just as the pendulum returns again in its swing, just as the moon returns in its orbit, just as the advancing year over brings the rose of spring, so do the properties of the elements periodically recur as the weight of the atoms rises." One other very special aspect of the Square of Nine is that the more you study the more you learn how much you don't know!
ROADMAP CHARTS USE SQUARE OF NINE PRINCIPLES
Roadmap Charts are a simple and elegant construct that use square roots to convert price and time into channels and a mathematically precise grid that can contain a trend for days, weeks, months or even years. Although the channels look like conventional trend lines consider that trend lines are drawn after-the-fact to delineate existing data points. Roadmap channels are fixed and can be drawn immediately, within seconds in the case of intraday data, after the completion of a single price bar. That this phenomenon occurs more often than not is fairly convincing evidence that even such complex events as hugely participated auctions may be explainable by a few simple rules.
We often say that Roadmap Charts self-define the trend because if the selected bar is indeed a trend-changing pivot point the channels will contain all (or nearly all) future price movement in that time frame for the life of the trend. Roadmap Charts can be constructed for any ticker in any time frame. The principles of construction remain the same although the quirkiness of certain pricing data, such as low-price stocks, decimal currencies, and bonds in 32nds, can present some scaling challenges. Our book Trading the Square of Nine with a Pencil and a Calculator goes well beyond Roadmap Charts and tells you how to easily convert price and time into degrees of a circle, and the five different ways to square price and time for any ticker in any time frame. Review the Roadmap Charts. You have enough information to understand what we mean by "45 degree grid" because all our S&P charts are drawn in multiples or proportions of 90 degrees. You can use other grid sizes as in this example but we believe that consistency pays off once you become comfortable with the natural rhythm of a particular ticker. A perfect complement to the Square of Nine techniques we describe in our book is the displaced moving average technique for projecting price and time that we tell you about in our book J.M. Hurst Cycle Trading Without the Rocket Math.
