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TheNegotiator

A Discussion of Gann

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I have no particular experience of Gann and his teachings whatsoever but I would like to start this thread to learn and share anything on the subject. Whether the arguments are that certain aspects are pure lunacy(pun intended!) or if there is actually more merit in any of the methods that arguably the greatest ever trader/investor that ever lived employed. So I'll be trying to find info and learn about this topic from scratch and any additions to get me going would be much appreciated!!

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William Delbert Gann was born June 6, 1878, in Lufkin, Texas, to Sam H. and Susan R. Gann, immigrants to Texas from the British Isles. Lufkin is midway between Houston and Texarkana. This part of Texas is cotton country and Gann’s parents lived on a Neches River bottom cotton ranch near Lufkin. He grew up around the cotton warehouses in Angelina.

 

If you are interested to read the entire article about the life of William Gann visit: http://bit.ly/gqd43I

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Okay, so this is what I have so far:-

 

Pattern- The study of specific market swings.

 

Price- Considers specific prices that recur with "vibrations", Gann angles and retracement targets.

 

Time- Seasonal, numerical and social cycles. Astrological cycles.

 

Nothing so far is particularly unusual other than the astrological analysis. At this point I am not too sure about the relevance of this and I am not especially comfortable with it. Plus it's something that I have never looked at before so I will ignore it at least for now and try to further understand the techniques outlined above. Anything I have missed(and I am sure I have) please post it so I can update the list.

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I have not posted here at Trader's Lab in quite a long time, but had to comment on your Gann thoughts, Negotiator. I have studied everything regarding Gann I could get my hands on over a trading career that has spanned three decades. Some has been useful, most has not.

 

Unfortunately, Gann techniques are all speculation. He did not leave detailed instructions on his trading techniques...it is all open to interpretation and speculation on students part. In the end, I could not come any closer to absolute time-price projections using interpretations of Gann than I could with techniques that where clear, scalable, and much easier to use.

 

This is my personal experience, yours may be different.

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I agree with BigKahuna about all we have are adherent’s later projections on Gann and not much real Gann material. I, too, studied all the published and unpublished Gann material I could get my hands on and after all that study I only occasionally glance at some of his angle stuff with the ags mostly just to see if “by coincidence”

 

… ages and stages ago - my own big 'projection' on what differentiated Gann was that he was an ace at knowing just when to exit. The benefit of that came not from Gann, but from finding my own strengths that were 'hidden' in the projections...

 

Yes you can systematically (with confirmations or not) trade Gann’s various ‘timing’ and time price triggers from his techniques… but you could also do the same just as successfully with something like Sloman's Delta method or etc, etc.

And you can take triggers ~x degrees before astrological aspects, etc – something he never mentioned. Why not? I bet he never noticed it.

 

….Anyways the only valuable Gann work I’ve ever really learned and profited from was from ‘students’ who used his concepts to develop systems and (more telling) his terminology to describe their own systems. For me, an old example of that is Gerald Marisch’s book The W.D. Gann Method of Trading – basic, not so precision oriented, trading techniques with a heavy Gann oriented overlay

 

The most profitable Gann stuff I have ever used is the Gann Clusters feature on G.E.T.… again Tom Joseph’s idea for this was only inspired by ‘Gann’. He didn’t really use Gann’s angles, etc.

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Ganns basic price action stuff seems pretty solid and somewhat overlooked. Also I have a friend who is quite the student of Gann (including the more 'esoteric' stuff) who tells me his money management was pretty robust. Again not very 'sexy' compared to calling absolute market tops based on plannetary alignments.

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Thanks guys for the input so far! I realise that to really get anything out of Gann will not be all that easy, but then what is? So I am going to continue looking into it more and see what comes of it. I think it'll be interesting whatever the outcome.

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You can find details of some of his price action stuff (swing charts and what not) over at fibonacii trader (software) web site bottom left under downloads look for FT Journal Issues. It presents a fairly simple but comprehensive way of classifying price behaviour. A good resource imho.

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One of the most important things that I learned from Gann is that he makes time relevant. He said that it is only interesting to be in a stock when you can expect a profit for the amount of time that you are in a stock. He makes time a very important factor in your trading. If there is no profit for a specific amount of time there is no reason to be in the stock. So you should be able to draw a line under each trade you make with a specific angle that would be your profit line, or in other words your stoploss. It's always a difficult question to where to put you stoplos, Gann says it depends on the amount of profit you prefer on a specific period of time. Simple but clever! And so he has multiple simple eye openers, interesting dude!

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Emotion, yes I have an interest in this idea of time too and certainly it is something I wish to explore more. In the past I have also charted by taking time out of the picture using volume charts. But I find that although useful, they fail to illustrate the tempo of the session. Another point I have heard of but am yet to understand fully is that Gann looked at an additional dimension on a chart. Not just the x/y of price/time or even volume or a derivative, but a kind of depth to the chart itself. A spiralling motion which defines the oscillations of the market. Not sure how useful it could be but I'm certainly intrigued.

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For what it is worth, I have thought of the spiraling of time and price a bit like the attached spot gold chart. Often, if we see things drawn on a chart a little differently once, we will begin to see it more on our own.

 

Since I know someone will ask, there are two timing techniques on this chart. The lite blue line is a cycle of 14 five minute bars or seventy minutes. The white lines are a different cycle measure using a three point sequence of h-l-h or l-h-l. I am just too lazy to clean off my chart to illustrate my interpretation of spiraling through time and space...

 

bigkahuna

Edited by BigKahuna
seems I am having an issue uploading this snag

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  Emotion said:
One of the most important things that I learned from Gann is that he makes time relevant. He said that it is only interesting to be in a stock when you can expect a profit for the amount of time that you are in a stock. He makes time a very important factor in your trading. If there is no profit for a specific amount of time there is no reason to be in the stock. So you should be able to draw a line under each trade you make with a specific angle that would be your profit line, or in other words your stoploss. It's always a difficult question to where to put you stoplos, Gann says it depends on the amount of profit you prefer on a specific period of time. Simple but clever! And so he has multiple simple eye openers, interesting dude!

 

Thanks. Yep he does have some great stuff on what can loosely be put under the 'time stop' heading that I had forgotten about...

 

Do you think these points you mentioned can be applied to all methods or systems ubiquitously?

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hi. time is not only an important factor, it is "THE MOST IMPORTANT FACTOR".

the meaning is - that the price axis can flactuate alot, but when the time is up - the cycle is finished.

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Zdo, difficult to say...why is that, because I am a point and figure man myself. And with PnF we take time out of the equation...

 

What is a response to Tikanman too...

 

Yes, Gann was a time believer, for Gann time was everything, everything Gann worked on is based on time. He believed he could not only predict targets, but he believed he could also predict when those targets would be reached...

 

Coming back to the rising lines "time stop", within PnF we tend to draw a 45 degree angle from the bottom of a new trend and with each new column (price movement) within that trend we expect te price to stay one box higher than the low of the previous column. So we don't say with each time period we expect a higher price, but within each price movement we expect higher prices to be interested to stay in the trade...

 

So you see Wyckoff and Gann both agreed on drawing climbing lines to keep interesting in a trade! As Gann says why putting your money at risk or loan it to someone if you don't expect a return for it! No profit no interest :) Both say even prices = no interest!

 

It seems so obvious but thinking about it gives you a nice idea about what to do with your stop loss...there are a lot of strategies and theories about stop losses, but always think about Wyckoff and Gann at those moments: no profit = no interest

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Emotion - its not only that gann was a time believer - he also lookd at the connection between price and time combined.

 

as a person who is now 2 years into researching gann material ,

there are at least two myths i can break

 

the first one is gann Angles. which are a part of his "standard" trading courses and do not offer anything new or projected to the future.

 

the second one is the use of astrology as a factor in market analysis. i think gann used astrology as a way to divert people from his true system, which was based only on price movement.

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  Tikanman said:
Emotion - its not only that gann was a time believer - he also lookd at the connection between price and time combined.

 

as a person who is now 2 years into researching gann material ,

there are at least two myths i can break

 

the first one is gann Angles. which are a part of his "standard" trading courses and do not offer anything new or projected to the future.

 

the second one is the use of astrology as a factor in market analysis. i think gann used astrology as a way to divert people from his true system, which was based only on price movement.

 

I totally agree with you!

 

As for the Gann Angles, you should see it as a possible tool as I pointed out above to have some direction for your stoploss but it has no value in the course of projecting any future highs or moves...

 

People shouldn't think everything Gann describes as "holy grails" or magic, most of it are just tools to make some sence / give a description to what has happend...

For example a stock moves and it stays constantly above that Gann Angle so you can say it is in an uptrend...simple no magic no value...but by using it you and everyone can make up the same conclusion that it is in an uptrend from the point where you draw the Gann Angle...has it any value...it's the same observation as you can say someone rides away from me, why because from my point of view he gets smaller and smaller...yes, true observation, has it any value???

 

And that whole astrology, I totally agree that he wrote that book to get everyone on the wrong foot before he died! In all is early work he didn't even mention astrology, while its said that he made good money in his early years....

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Hi,

In this article we will discuss about one of the many methods of analysis William Gann used. He revealed some of his methods to be used by those patient and wise enough to study and understand them.

 

We will present you William Gann’s Square of Nine: idea of conception, special properties and the characteristics for bull and bear market. We will then find some specific and less known geometrical and mathematical proportions between the numbers in the square. We will then look on the charts for the numbers in the square. We will discover that between a High and a Low there is a specific ratio. This ratio has an explanation and we will find its origin and use. We will end with having a powerful tool that gives us clear targets for the trend to reach.

 

Check it out at http://bit.ly/bvLBym

Hope it will be useful for someone…

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  Dharmik Team said:
Hi,

In this article we will discuss about one of the many methods of analysis William Gann used. He revealed some of his methods to be used by those patient and wise enough to study and understand them.

 

We will present you William Gann’s Square of Nine: idea of conception, special properties and the characteristics for bull and bear market. We will then find some specific and less known geometrical and mathematical proportions between the numbers in the square. We will then look on the charts for the numbers in the square. We will discover that between a High and a Low there is a specific ratio. This ratio has an explanation and we will find its origin and use. We will end with having a powerful tool that gives us clear targets for the trend to reach.

 

Check it out at http://bit.ly/bvLBym

Hope it will be useful for someone…

 

gann square of 9 is alot more than what that article shows.

in fact, the square of 9 needs to be changed according to the market you are trading.

its pointless to show past events as "amazing". the real thing is forecasting the future.

 

but ultimately - as gann points out - Time is the most important factor. so price can go up and down , hit the angle , cross it, cross back, but only time will change the trend.

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  BigKahuna said:
I have not posted here at Trader's Lab in quite a long time, but had to comment on your Gann thoughts, Negotiator. I have studied everything regarding Gann I could get my hands on over a trading career that has spanned three decades. Some has been useful, most has not.

 

Unfortunately, Gann techniques are all speculation. He did not leave detailed instructions on his trading techniques...it is all open to interpretation and speculation on students part. In the end, I could not come any closer to absolute time-price projections using interpretations of Gann than I could with techniques that where clear, scalable, and much easier to use.

 

This is my personal experience, yours may be different.

you are on the ball and also on the mark as well.

 

however there are many guru of gann who would argue otherwise and woudl try to interest you to buy their interpretation of gann applied to trading profitability....

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  nakachalet said:
you are on the ball and also on the mark as well.

 

however there are many guru of gann who would argue otherwise and woudl try to interest you to buy their interpretation of gann applied to trading profitability....

 

you are absolutly right - those who want to sell you something - beWARE!

 

but ultimately , as a gann trader, i can say with confidence after a long research - his methods are very hard to understand at first - but after a while - everything becomes clearer,

and trading becomes easier and much more profitable.

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  Emotion said:
One of the most important things that I learned from Gann is that he makes time relevant. He said that it is only interesting to be in a stock when you can expect a profit for the amount of time that you are in a stock. He makes time a very important factor in your trading. If there is no profit for a specific amount of time there is no reason to be in the stock. So you should be able to draw a line under each trade you make with a specific angle that would be your profit line, or in other words your stoploss. It's always a difficult question to where to put you stoplos, Gann says it depends on the amount of profit you prefer on a specific period of time. Simple but clever! And so he has multiple simple eye openers, interesting dude!

 

Gann says it (STOPLOSS) depends on the amount of profit you prefer on a specific period of time.

 

to many other traders, stoploss might depends on the amount of profit....

 

but to me as a trader, my stoploss is totally and absolutely independent of the projected profit which in and of itself has nothing to do with my stoploss....

 

to me, they are totally two different identities, factors and functions.... my profit is whatever the amount the market will allow me to indulge in after the trigger....

 

whereas my stoploss is set there to tell me to eat my humble pie and that FOR THIS TRADE AND FOR THIS TRADE ONLY.... my trading plan, my statistics and my strategy, all fail me and that i am absolutely and unequivocally on the wrong path and direction....

 

HOWEVER, my risk/reward money management alone is correct and is a saving grace for the day and for me as well.... in that i only return 9 tics to the market.... without which my loss might be substantially more....

 

many guru would argue that in order to trade to profitability, traders better have a 3 to 1, 4 to 1, some (john) even advocates 7 to 1 reward/risk ratio.... some might truly have that extraordinary insight and ability to set their trade profitability to 7 to 1.... but i must confess such uncanny insight is currently not in my trading repertoire.... but i am still learning and is wide open for this sort of profitable suggestion.... thx everyone and have a profitable trading day. :missy:

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