In order to understand how to apply Gann Theory to today’s markets, I feel it is important to know a little about the man. Although their has been a lot written about the man since he died in 1955, I feel that I have made a valiant effort to highlight the key points in his life with as much accuracy as possible.
Introduction to Pattern, Price and Time
In order tounderstand how to apply Gann Theory to today’s markets, I feel it isimportant to know a little about the man. Although their has been a lotwritten about the man since he died in 1955, I feel that I have made avaliant effort to highlight the key points in his life with as muchaccuracy as possible.
This article is an excerpt from the first chapter of my bookPattern, Price & Time (Using Gann Theory in Trading Systems), JohnWiley & Sons, Inc., 1998. In my newsletter, The Pattern Price TimeReport, I apply the technical analysis principles presented by W. D.Gann in his many books and courses to research and analyze today’sForex and Futures Markets. Since Gann died in 1955 many new marketshave been created. In addition to the new markets, many new technicalanalysis tools have been created. Because of these new markets and newtrading tools, I prefer to refer to my technique as pattern, price andtime analysis.
Many people today feel that William Delbert Gann only used some formof technical analysis to analyze and trade the markets. After readingand studying his techniques in his books and courses, I have come tothe conclusion that his approach was to study and experiment as themarkets were always changing. In fact, this theme of “study andexperiment” was repeated throughout his life. This is why I prefer touse a blend of fundamental and technical analysis as well as someconventional chart patterns and charting tools combined with my deepknowledge of Gann Theory to come to my conclusions about the markets.
To fully understand my approach to Gann analysis, it is importantfor the reader of this article to read my book and subscribe to mydaily and weekly newsletters. All of my publications are designed toeducate the reader to get a better understanding of Gann Theory and howto apply it to today’s markets.
One of the First Technical Analysts to …
If not the first technical market analyst, W. D. Gann was certainlyamong the more successful. Creating and publicizing a new approach toanalyzing markets, Gann claimed to have made a world’s record inleverage and accuracy more than once, that he had developed tradingstrategies for speculators, and that he could predict market moves toexact price levels.
William Delbert Gann was born on a cotton ranch on June 6, 1878, inLufkin, Texas. He displayed a strong aptitude in mathematics during hisearly years, completed a high-school education, and started trading in1902 at the age of 24. By his own admission, Gann’s early trading wasbased on “hope, fear and greed,” all of which he later realized werenot compatible with a successful trading strategy.
After losing significant sums of money, Gann began to observe thatmarkets followed mathematical laws and certain time cycles. He wasparticularly interested in the connection between price and time, arelationship he referred to as the “square” of price and time. He beganstudying 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 mostindustrious technical analysts. He made thousands of charts displayingdaily, weekly, monthly, and yearly prices for a wide variety of stocksand commodities. He was an avid researcher, occasionally charting aprice back hundreds of years.
May Soybean Gann Astrological Chart (Fig. 1)
At a time when most market analysis was strictly fundamental, Gann’srevolutionary theories relied on natural laws of mathematics, timecycles, and unshakeable conviction that past market activity predictedfuture activity.