Analysis from a legend

W.D. Gann

A True Mathematical Genius

W.D. Gann has arguably contributed more to Technical Analysis, and in particular the understanding of the relationship between Time and Price, than any other trader. It was Gann’s mathematical genius and his ability to see the patterns in the market (that at the time nearly everyone else ignored) that made him so successful and has a legacy that continues to this day.

The underlying premise for most of Gann’s work was that there is a degree of order to the way that markets move, and with that order came a degree of prediction. Many of the techniques seem crazy on first observation. Skeptics argue that there can be no way that a previous high in the market has a mathematical relationship to new turning points. Yet Gann’s own study, and the study of thousands since, show that time and time again these strategies hold true.

Remarkable Win Ratio

Does it always work? No, but no strategy in the market is ever guaranteed. Gann himself was interviewed for a month (October 1909) in which a reporter from “The Ticker and Investment Digest” (later became “The Wall Street Journal”) witnessed Gann place 286 trades with 22 losses. It does not always work, but a win ratio of 92% is remarkable. P.S. Gann knew his money management rule and those losses were very small. He made 1000% profit in that month.

Many of the techniques that Gann devised have been made into tools that can be included in Market Analyst, enabling users of Market Analyst to apply in seconds what took Gann hours to calculate. For more detailed explanation of the Gann tools in Market Analyst, go to the Tool Store and review how the tools work.