The entry to the building of New York Stock Exchange has been adorned by a portrait of a standing man for a few decades in a row already. Who was honored this way? This man is William Delbert Gann, one of the most talented and famous traders of all times who lived in 1878-1955. However, few people know what singles out Gann among many other traders that made an equally large fortune trading in the stock markets. He achieved success through his unique ideas that actually lay the foundation for the concept of success in the modern world of stock market trading. This concept is based on very effective ways of forecasting the market situation through trading and astrological patterns. By using mathematical formulas that looked supernatural to his contemporaries, Gann soon won fame in the world of trading. On the other hand, his view of trading were far from being limited to numerology and turned out very versatile.
Life
He was born in 1878 in Texas. The Ganns lived poorly, and he was one of eleven children. At 16 he started looking for a job. For some time young Gann served as a delivery boy on a train and later worked in a cotton warehouse. In 1901 he goes to work at a broking firm. This was the starting point of his stock market trading. William made his first trades as early as in 1902. In 1903, at the age of 25, he moves to New York and continues work. In 1907 he predicted a stock market panic and a collapse of the commodities market which he used to make a tidy amount and win fame in certain broking circles. William was regarded as a very talented and apt trader. He earned this reputation by trading at two accounts at the same time. In one, he turned 300 dollars into 25000 dollars in three months. He increased the other one from 130 to 12000 dollars in a month only.
In addition, Gann continued impressing the public by laying out his accurate predictions. In 1914 he predicted the beginning of the world war and the future panic in markets. In 1918 he predicted the end of the world war and Keizer's abdication. His predictions were published in many newspapers of those times, including the most popular, such as New York Times.
Starting in 1919, Gann becomes self-employed, and pretty successful. In 1923 his book comes out. It is still believed by many traders the best of its kind. Its title is Truth of the Stock Tape. Another, very interesting, book sees the light of day in 1927 titled Tunnel Thru the Air. This book's plot is intertwined with his method of prediction and trading and written in a veiled and encoded manner. Traders have been trying to decode it for dozens of years, but only few succeeded.
After a prolonged period of successful trading William Gann moved to Miami, Florida where he continued his research and trading till his death, on 14 June 1955.
Gann's trading method
The trading methods developed by W.D. Gann are comprehensive and holistic. Using only one of them (e.g., Gann angles) will generate no serious results.
William Gann personally describes his experience as follows: 'I was entirely focused and spent all my free time on speculative markets for the past ten years. Like many others, I lost dozens of thousands of dollars and experienced both highs and lows. I experienced everything that is faced by a beginner who only starts trading in the market without having any basic knowledge for that'.
'Soon I understood that all successful people, be it lawyers, doctors or scientists, spend years learning and researching their field of specialization or occupation before they can make money there'.
Gann encouraged his students to research and study the market. He often pointed out that history tends to repeat itself, while human nature is invariable. Greed and desire to make a killing never change. These are the elements intrinsic to human nature and capable of affecting and driving the man to losses on speculation or investment. To make progress in stock investments or commodities speculations, one should have a clear plan and rules that would have worked effectively in the market for 50+ years. After these rules are learned, 'random trading', 'waiting' and 'concerns' should be ruled out and rules should be followed to the letter. Only then can the trader get profits!
What William D. Gann's developments are all about
There is a popular Latin sentence: Amat victoria curam (Victory loves carefulness). William Gann was its proponent and believed that any trader can succeed only if he or she is able to forecast the market situation. However, he also believed that forecasts should be based on a rational and clear mathematic foundation rather than approximations or intuition. It is based on this theory that Gann invented such charts as the Circle of 360, Hexagon, Square of 9 and many other formulas you can easily use to calculate tendencies which will prevail in the market in the near future, which figures will rise or fall and how much etc. Gann used to say that different market instruments ultimately tend to squares of different figures, squares of their bases and tops or to a specially defined interim point of different squares depending on a specific period of time.
Square of Nine
The Square of Nine is often called the Square Root Calculator. Calculations are made by comparing square roots of different figures and determining interim points. There is one in the square's center. Vectors move away from it at 90 degrees. Squares of even and odd numbers are found in different corners. William Gann emphasized that especially important figures are situated on 90, 180 and 360 degrees of one. He also pointed out that most significant changes occur on the 180 angle. The progression of the Square of Nine can be calculated and continued to infinity. The Square can be practically used with the help of the Date Circle where resulting figures can be adapted to any time periods.
The Price Spiral
The Price Spiral is another rather significant discovery of Gann. He often used it to define key points in market development. The spiral is based on a mathematical base that pivots on the following premises:
1. First establish historically the lowest price of shares which is of both practical and psychological significance of traders.
2. Then determine and compare price figures of the subsequence period with a level from point 1. Analysis of resulting data later helps to establish the interdependency between various market tendencies.
Gann believed that price fluctuations move along a spiral and pass the same stages. In other words, they are cyclic in nature. By using a chart the trader can find out signs that point to a growth or fall of a price in a certain period of time.
William D. Gann's contribution to technical analysis tools
There is an endless number of mechanisms William Gann used to make over $50 mln. in his time over a short period of time. The genius of analyst never stopped claiming that success can be only achieved by applying different patterns, diagrams and tables at the same time. According to Gann, ignoring one of the methods is like ignoring one of the criteria that affects market development. Gann believed that 'Such mistakes are inexcusable and, ultimately, such use of my methods results lamentably'.
Today it is hard to overestimate the influence made by William Gann on the modern world of stock market trading. It is both beginners and experienced traders that choose his books in an attempt to home their trading skill. To popularize fundamental principles of his system, economic faculties of many universities deliver special courses in trading W.D. Gann's method. It has been over half a century since he died but Gann is still regarded as a great trader and role model, while his discoveries in market analysis impress with their accuracy and draw amazement and admiration.
