WD Gann : The Man and His Incredible Trading Legacy

The name of WD. Gann has become legendary among traders and market technicians today. Tales of his phenomenal success in trading and his arcane, yet highly accurate, technical theories are widely known. Not so well known, however, are the particulars about Gann and his methods.

Who was this mysterious man who claimed to have discovered the secrets of consistently and accurately forecasting the markets? What discoveries enabled him to do this? Do his theories and techniques still apply in today's markets? More importantly, if they do still apply, can they be explained in a straight-forward, simplistic manner without the esoteric jargon and abstruse mathematical concepts that enshroud much of his work?

To begin, |et's explore a little of Gann's background. William Delbert Gann was born on a cotton ranch on June 6, 1878, in Lufkin, Texas. He displayed a strong aptitude in mathematics during his early  strong aptitude in mathematics during his early years, completed a high-school education, and start-ed trading in 1902 at the age of 24. By his own admission, Gann‘s early trading was based on "hope, fear and greed," all of which he later realized were not compatible with a successful trading strategy.

”After losing significant sums of money," writes James A. Hyerczyk in his excellent work on Gann theory entitled Pattern, Price gr Tirne,2 ”Gann began to obsenre that markets followed mathematical laws and Certain time cycles. He was particularly interested in the connection between price and time, a relationship he referred to as the 'square* of price and time. l-le began studying this interaction diligently even traveling to England, India, and Egypt to research mathematical theory and historical prices.

"In developing his theories, Gann was undoubtedly one of the most industrious technical analysts. He made thousands of charts displaying daily, weekly, monthly and yearly prices for a wide variety of stocks and commodities. He was an avid researcher, occasionally charting a price back hundreds of years. At a time when most market analysis was strictly fundamental, Gann's revolutionary theories relied on natural laws of mathematics, time cycles, and his unshakeable conviction that past market activity predicted future activity.

In conducting his market research, Gann discovered a rule that would become the bedrock of his trading methodology a rule he called the "Law of Vibration/‘ which he claimed applied to the realm of natural science as well as the financial realm. Gann so refined this law that once a stock started to move higher or lower he was able to pinpoint the exact level to which a stock would rise or fait and often the exact time required to reach this objective.

He is famous, of course, for being one of the few to accurately forecast the stock market crash of 1929 and subsequent depression. in fact, he wrote a detailed month-by-month overview and forecast for the entire trading year 1929 one full year in advance (as part of his "Annual Stock Forecast" service to his newsletter subscribers); the vast majority of which was accurately fulfilled.

Gann was as versatile a trader as he was a successful one. Unlike traders of today who tend to specialize in a single area (like stocks or particular commodities), Gann made money trading in everything. He was a member of the New York Rubber Exchange,New York Commodity Exchange, New Orleans Cotton Exchange, and Chicago Board of Trade. ln his various books he describes his methods for accurately forecasting price trends of a wide variety of commodities, including coffee, sugar, cocoa, rubber, hides, hogs, eggs, cotton, wheat, rye, corn, soybeans, wool, Iard, and butter. lf there was an various books he describes his methods for accurately forecasting price trends of a wide variety of commodities, including coffee, sugar, cocoa, rubber, hides, hogs, eggs, cotton, wheat, rye, corn, soybeans, wool, lard, and butter. lf there was an exchange for it, Gann probably traded it, regardless of what it was. This goes to show the universality of Gann's phenomenal trading and forecasting techniques, which can be applied to any market.

By all indications, Gann's trading success was impressive. According to Hyerczyk, an analysis of Gann's trading record over 25 market days revealed that Gann made 286 trades, 264 of which were profitable. His success rate of 92.31% turned an initial investment of $450 into $37,000.** It has been rumored that over the span of his trading career, Gann acquired cumulative profits totaling $50 million, a figure which, however, is unsubstantiated. Brokerage statements indicate that he traded an account with a balance in excess of $2 miIIion and that upon his death he left an estate valued at around $5 million.

During his lifetime, Gann generously shared his knowledge and ideas with others, pennlng a total of seven books and numerous trading courses. Most of his more complex, intricate techniques were revealed in his commodity trading courses, such as the "Master Egg Course," among others. But the basis of his theories was revealed in more down-to-earth, perpetually popular volumes such as Truth ofthe Stock Tape and its companion, Wali Street Stock Selector. Other works include The Tunnel Thru the Air: Or Looking Back from l940; New Stock Trend indicator; How to Make Profits in Commodities; and 45 Years in Wall Street.

Overall, WD. Gann was arguably one of the most successful and accurate traders in the annals of Wall Street history. He set world records for leverage and trading profits on more than one occasion, and unlike most of his successful peers, he never failed to share his knowledge with an eager trading public, desirous of learning the proper way to acquire profits in the markets. He was as prolific and successful a teacher as he was a trader, a legacy which endures even today, as many of the worId’s top traders and investors continue to pore through his work and adapt Gann methods to modern—day instruments. Let us now take a look at some of the basic principles of Gann Theory, which continue to influence modern—day investors.

Complete reading go here... Gann Simplified

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Applying a Few Gann Techniques to the Forex Markets

Gann Theory can be described as the study of pattern, price, and time relationships and how these relationships affect the market. Gann Theory looks at pattern, price, and time as the key important elements in forecasting the future movement of the market. While each element has its own characteristics, each also has a unique, overlapping quality.

The focus of Gann Theory is to find the interlocking relationship between these three primary indicators of changes in trend and market direction. In other words, in certain instances a pattern has a large influence on the market, while at other times, price and time exert their dominance. It is the balance of these three elements, especially price and time that creates the best trading opportunities that can lead to more success in the market.

Gann Theory helps the trader to determine the best combinations of pattern, price and time to initiate successful trades. While trades can be triggered by each element individually, a trader who weights his signal too much toward one of these elements may experience a large number of losses, whereas a trader who is patient enough to wait for a proper balancing of pattern, price and time may experience more success.

Pattern study consists of the proper construction of minor, intermediate, and main trend-indicator swing charts and closing-price reversal patterns. Price study consists of Gann angle analysis and percentage retracements. Time study looks at swing timing, cycle timing, and historical dates. The combination of these three time factors helps the trader decide when and where to buy or sell. In this article, I describe techniques that help the trader determine how to discover these elements through proper chart construction and how they are related in trading activity.

PATTERN

In Gann Theory, pattern is defined as the study of market swings. Swing charts determine trend changes. For example, a trend changes to up when the market crosses swing tops and it changes to down when the market crosses swing bottoms. The trader can also gain information from swing charts about the size and duration of market movements. This how price, which is size, and time, which is duration, are linked to a pattern. In addition, the trader can learn about specific characteristics of a market by analyzing the patterns formed by the swing charts. For example, the charts delineate a market's tendency to form double tops and bottoms, signal tops and bottoms, and the tendency to balance previous moves.

Chart 1: Main Swing Indicator












PRICE

In Gann Theory, price analysis consists of swing-chart price targets, angles, and percentage retracement points.

Swing-chart Price Targets

After constructing a swing chart, the trader creates important price information that can be used to forecast future tops and bottoms. These prices can be referred to as price balance points. For example, if the swing chart shows the market has had a recent tendency to rally 100 - 150 pips before forming a top, then from the next bottom, the forecast will be for a subsequent 100 - 150 pip rally. Conversely, if the market has shown a tendency to break 100 - 150 pips from a top, then following the next top, the trader can forecast a break of 100 - 150 pips. If the swings equal previous swings, then the market is balanced.

Chart 2: Main Swing Indicator with Movement













Angles

Geometric angles are another important part of the Gann trading method. The markets are geometric in design and function, so it follows that they will follow geometric laws when charted. Gann insisted on the use of the proper scale for each market when charting to maintain a harmonic relationship. He therefore chose a price scale that was in agreement with a geometric design or formula. He mainly relied on a 45-degree angle to divide a chart into important price and time zones. This angle is usually referred to as the "1X1" angle, because it represents one unit of price with one unit of time. He also used other proportional geometric angles to divide price and time. These angles are known as 1X2 and 2X1 angles because they represent one unit of price with two units of time and two units of price with one unit of time, respectively. All of the angles are important because they indicate support and resistance. They also have predictive value for future direction and price activity. All of which is necessary to know in order to forecast where the market can be in the future and when it is likely to be there.

Chart 3: Gann Angles












Just as Gann angles offer the trader price levels that move with time, percentage retracement points provide support and resistance that remain fixed as long as a market remains in a price range. Gann is commonly acknowledged to have formulated the percentage retracement rule, which states that most price moves will correct to 50%. Other percentage divisions are 25% and 75%, with the 50% level occurring the most frequently.

Gann believed traders would become successful if they used price indicators such as swing-chart balance points, angles, and percentage retracement points to find support and resistance. In essence, however, the combination of the two price indicators provides the trader with the best support and resistance with which to work. For example, while the uptrending 1X1 angle from a major bottom and a 50% price level provide strong support individually, the point where these two cross provides the trader with the strongest support on the chart.

Chart 4: Percentage Retracements












TIME

According to Gann, time had the strongest influence on the market because when time is up, the trend changes. Gann used swing charts, anniversary dates, cycles, and the square of price to measure time.

Swing-Chart Timing

A properly constructed swing chart is expected to yield valuable information about the duration of price swings. This information is used to project both the duration of future up moves from a current bottom and the duration of future down moves from current tops. The basic premise behind swing-chart timing is that market patterns repeat: this is why it is necessary to keep records of past rallies and breaks. As a swing bottom or top is being formed, the trader must utilize the information from previous swings to project the minimum and maximum duration of the currently developing swing. The basic premise is that price swings balance time with previous price swings. However, in strong up moves the duration of a rally is greater than the duration of a break, and subsequent upswings are equal to or greater than previous up moves. Conversely, in strong down moves the duration of a break is greater than the duration of a rally, and subsequent downswings are equal to or greater than previous down moves.

Anniversary Dates

Among the timing tools Gann used is a concept he referred to as "anniversary dates." This term refers to the historical dates the market made major tops and bottoms. The information collected in effect reflects the seasonality of the market because often an anniversary date repeats in the future. A cluster of anniversary dates indicates the strong tendency of a market to post a major top and bottom each year at the same time. For example, in order to predict future tops and bottoms in wheat, Gann claimed to have studied prices back to the twelfth century, noting not only the prices, but the anniversary dates - top to top, top to bottom, bottom to bottom, and bottom to top - were fundamental factors in this thinking. This information he learned from the research was very important to his analysis, and these dates gave obvious clues to another of his approaches to the market: time cycles.

Cycles

As mentioned earlier, Gann tried to build analysis tools that were geometric in design. When looking at anniversary dates he saw a series of one-year cycles. In geometric terms, the one-year cycle represented a circle or 360 degrees. Building on the geometric relationship of the market, Gann also considered the quarterly divisions of the year to be important timing periods. These quarterly divisions are the 90-day cycle, the 180-day cycle, and the 270-day cycle. In using the one-year cycle and the divisions of this cycle, you will find a date where a number of these cycles line up (preferably three or more) on a single point in time in the future. A date where a number of cycles line up is called a time cluster. This time cluster is used to predict major tops and bottoms. Time cycles are a major part of Gann analysis, and should be combined with price indicators to develop a valid market forecast.

SQUARING THE PRICE RANGE WITH TIME

The squaring of price and time was one of the most important and valuable discoveries that Gann ever made. In his trading course he stated "if you stick strictly to the rule, and always watch when price is squared by time, or when time and price come together, you will be able to forecast the important changes in trend with greater accuracy."

The squaring of price with time means an equal number of points up or down, balancing an equal number of time periods - either days, weeks, or months. Gann suggested traders square the range, low prices, and high prices.

Squaring the Range

When Gann angles are drawn inside a range, the angles provide the trader with a graphical representation of the squaring of the range. For example, if a market has a range of 100 and the scale is 1 point, a Gann angle moving up from the bottom of the range at 1 point per time period will reach the top of the range in 100 time periods. A top, bottom, or change in trend is expected during the time period when this occurs. This cycle repeats as long as the market remains inside the range.

Squaring a Low

Squaring a low means an equal amount of time has passed since the low was formed. This occurs when a Gann angle moving up from a bottom reaches the time period equal to the low. For example, if the low price is 100 and the scale is 1, then at the end of 100 time periods an up trending Gann angle will reach the square of itself. Watch for a top, bottom, or change in trend at this point. The market will continue to square the low as long as the low holds. A graphical representation of squaring a low price can be seen on a chart Gann called a zero-angle chart. This chart starts an up trending angle from price 0 at the time the low occurred and brings it up at one unit per time period. When this angle reaches the original low price, a top, bottom, or change in trend is expected.

Squaring a High

Squaring a high means an equal amount of time has passed since the high was formed. This occurs when a Gann angle moving down from a top reaches the time period equal to the high. For example, if the high price is 500 and the scale is 5, then at the end of 100 time periods a Downtrending Gann angle will reach the square of itself. Watch for a top, bottom, or change in trend at this point. The market will continue to square the high as long as the high holds. A graphical representation of squaring a high price can be seen on a zero-angle chart. This chart starts an up trending angle from price 0 at the time the high occurred and brings it up at one unit per time period. When this angle reaches the original high price, a top, bottom, or change in trend is expected. Time analysis in Gann Theory requires the trader to study market swings, anniversary dates, cycles, and the squaring of price and time to help determine future top, bottom, and change in trend points.

GANN THEORY AND ITS APPLICATION TO TRADING

Gann Theory is based on the principles that price and time must balance. Markets are constantly in a position of change and subject to movement, sometimes with great volatility. Gann Theory states that there is order to this movement. By using the proper tools to analyze this movement, an accurate forecast for future direction can be made.

Finding the balancing points is necessary to predict future prices and movement. Gann developed a number of methods to help determine these balance points. The first method uses patterns created by swing charts to find the balance points. The second method uses angles and the squaring of price and time to find the balance points. The third method uses time.

While the perfect market remains balanced all the time, it also proves to be uninteresting, because major moves occur when price is ahead of time or time is ahead of price. The proper use of the various Gann analysis tools will help you to determine when these major moves are most likely to occur.

Now that the theory has been explained, how can it be applied to trading?

The first step is to create the charts that properly demonstrate the concepts of pattern, price and time analysis. The second step is to create the swing charts or trend indicator charts that provide the trader with a way to analyze the size and duration from the swing chart to forecast future price and time targets. In addition to forecasting, this chart is also used to determine the trend of the market.

After the pattern has been analyzed in the form of the swing chart, the trader moves to the fourth step, which is the creation of Gann angle charts. Using the tops and bottoms discovered with the swing chart, the trader draws, properly scaled geometric angles up from bottoms and down from tops. Since these angles move at uniform rates of speed, the trader uses the angles as support and resistance, and attempts to forecast the future direction and price potential of the market.

Chart 5: All Gann Techniques.












Percentage retracement levels are also created using the information derived from the swing charts. Each paired top and bottom on the swing chart forms a range. Inside of each range are the percentage retracement levels, the strongest being the 50% price level. The fifth step is to draw the percentage retracement level inside of each range. At this point the trader can judge the strength and weakness of the market by relating the current market price with the percentage levels. For example, a strong market will be trading above the 50% price and a weak market will be trading below the 50% price.

Time studies are then applied to the market in the sixth step. Traders should use historical charts to search for anniversary dates and cycles that could indicate the dates of future tops and bottoms. The swing chart is used to forecast the future dates of tops and bottoms based on the duration of previous rallies and breaks. Gann angle charts are used to predict when the market will be squaring price and time. Now the percentage retracement chart indicates the major time divisions of the current range, with 50% in time being the most important.

In the seventh step, the information obtained from the pattern, price and time charts is combined to create a trading strategy. This is the most important step because it demonstrates where the three charts are linked. For example, the swing chart tells the trader when the trend changes. If the trend changes to up, the trader uses the previous rallies to forecast how far and how long the rally can be expected to last. The Gann angles drawn from the swing chart bottom show the trader uptrending support that is moving at a uniform rate of speed. In addition, the Gann angle chart shows the trader the time that will be required to reach the swing chart objective based on the speed of the Gann angle. The 50% price level acts as support when the market is above it and as resistance when it is below it. The strongest point on the chart will occur at the intersection of the uptrending Gann angle and the 50% price. Finally, time indicators are used to prove to the trader that the upside target is possible because anniversary dates and cycles can verify the existence of similar market movement in the past.

Combining pattern, price, and time, the trader creates a trading strategy. This trading strategy is based on the principle of price and time balancing at certain points on the chart. The three methods of analysis draw this information out of the chart. Without the proper application of the three analysis tools, valuable information would be lost to the trader. This is the essence of Gann Theory, which states that there is order to the market if the proper tools are used to read the charts.

James A. Hyerczyk is a registered Commodity Trading Advisor with the National Futures Association. Mr. Hyerczyk has been actively involved in the futures markets since 1982 and has worked in various capacities from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis.

His published works include articles for Futures Magazine, Trader's World, SFO Magazine, Forex Journal, and Commodity Perspectives (Commodity Research Bureau), and, his book Pattern, Price & Time published by John Wiley & Sons, Inc. in 1998.

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W.D.Gann, Coffee, and Astrology

Written by Myles Wilson Walker

The following excerpts are from a letter that financial astrologer W.D.Gann wrote in 1954 in which he talks specifically about the planets relationship to coffee prices.He doesn't spell out the whole secret behind his timing but never the less it is very interesting and is also important as confirmation that astrology was behind his famous price and time forecasts. 1954:

March 24-Heliocentric Jupiter enters Cancer.
June 24- Heliocentric Jupiter is 120 degrees of Saturn.
April 12th Sun 60 degrees of Jupiter Geocentric.
April 13th Jupiter 135 degrees of Saturn Geocentric.
April 15th Sun 180 degrees of Neptune Geocentric.
April 16th Jupiter 60 degrees of Pluto Geocentric.
April 26th Jupiter 120 degrees of Neptune Geocentric.
April 26th Sun 180 degrees of Saturn Geocentric.

The month of April is very important.There should be great activity and wide swings in prices due to these aspects. GEOCENTRIC MAPS MOVEMENTS from low prices on coffee-- 1931 April 16th to August 7 1953- Mars has made 12 round trips.

1954 October 29- Mars will be opposite or 180 degrees from its place on April 16 1931.
1936 October 1st to to September 19th 1953- Mars made 9 round trips of 360 degrees each.
1954 Dec 9th- Mars will be 9 and a half round trips or opposite its place Oct.1 1936.
1940 May 15 to June 12 1953- Mars made 7 round trips or complete cycles.
1954 April 9th - Mars is 7 and a half cycles and is opposite its place on May 15 1940.
Due to the retrograde position of Mars it will again be 7 and a half July 7th and Aug.17
1954 or the third time in opposition to its own place which is very important. 1940
August 19 to September 15 1953- Mars had completed 7 round trips. Note low on coffee at that date.
1954 December 4th - Mars 7 and a half round trips or opposite its own place on Aug. 19
1940. If coffee starts to decline between March 22 and 24 1954 it should continue down to around April 15 when the adverse aspects of Jupiter to Saturn and the Sun to Neptune are completed.From these dates you should watch for the possibility of a rally up to April 16 1954 when Jupiter is 120 degrees of Neptune and the Sun 130 of Saturn.This might cause a quick rally followed by a sharp quick decline.

By studying all of the data outlined above and applying it to coffee you will be able to learn more about what causes changes in trend.

So there you have it, straight from W.D.Gann himself In my last article I did an astrological analysis of W.D.Ganns May Soybean chart based on the actual notations that he made on that chart.That dealt with Jupiters planetary ingress (Jupiter changing signs in the zodiac) and the price targets that this generated.Interestingly enough this same method as spelt out in my book Super Timing nailed the low on Soybeans again this year on July 9th.

In Super Timing I took all of Ganns trades that he mentioned in his last promotional booklet entitled -Why money is lost on commodities and stocks and how to make profits plus numerous other trades that I gathered from other sources.By doing this I was able to find the one common timing factor that linked all these trades plus price targets using one of W.D. Ganns calculators that I had discovered previously.I have called this the 1908 price target method named after the date that Gann said that he made his greatest discovery.

To my knowledge this is the first time that anyone has been able to unify all of Ganns
predictions using the same method.It solves his famous wheat prediction where Gann said wheat must trade at $1.20 by the close of trading on the 30th of September 1909 plus all the other price targets mentioned in The Ticker interview. It also solves the trades he made in 1954 at the end of his career on the coffee market using the same price and time method. The reason I think that his booklet Why money is lost on commodities and stocks and how to make profits was an important place to begin research on Ganns method is because it was written when he was 76 years old (one year before his death in 1955) and it was the perfect place for him to sum up what he considered to be the most important aspects of his work. Just to give you another idea of how planets can time the markets I will tell you another technique that I picked up when analyzing the sequence of trades that make up Robert Gordons great campaign in cotton from Ganns book The Tunnel thru the air.

Gann writes,

June 25th 1927.
October cotton declined to 16.80 Bought 500 October at 16.83 and 500 December at 17.15. He figured that it would run up for about thirty days.

July 25th 1927.
Sold 500 October cotton at 19.00 Sold 500 December at 19.20 Went short 500 December at 19.20. Decline followed as he expected.

To understand the reason for the timing of these trades just imagine a triangle and at each corner there is a planet.This is called a grand trine. What is happening in this case is that there are two slow planets that don't move much and they are 120 degrees apart(trine) Then a fast planet, Mercury in this case comes around so that it forms a triangle with the other planets (at the low of the market) it moves away so that there is no grand trine anymore but a month later the Sun comes around to where Mercury use to be and formsthe triangle again (at the high of the market).

This simple technique works but there is more to it than this and there were also price targets involved but everything is covered in depth in Super Timing as well the tools to do this work. As well as Ganns trades I've looked at examples from recent markets and find that the time and price target methods are still working well.To help people learn these techniques quickly I've also added a tutor that I originally wrote for the first purchasers of the book and put up as a website for them.This tutor is now at the end of the book and covers time cycles from recent S+P Soybean and Beanoil futures,these techniques can be used on every market. I havepurposely not covered any material presented elsewhere or rehashed the usual Gann knowledge that is in the public domain.

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The Remarkable W.D. Gann

Article by John L. Gann Jr.,
grandson of W.D. Gann

If you had been a businessman traveling 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 travelers 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 Ganns 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. W.D. 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 housed 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 demeanor 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.

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.

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