Gann Trading Software Stock Commodities Forecasting
Gann Trading Software
Who was W.D. Gann?
William Delbert Gann, usually referred to as W.D. Gann, attained legendary status as a market operator, and pioneer of market psychology and technical analysis on Wall Street between 1900 and 1956.
In his novel "Tunnel thru the Air" WD Gann stated . . .
"Everything moves in cycles as a result of the natural law of action and reaction. By a study of the past, I have discovered what cycles repeat in the future"; "It is not my aim to explain the cause of cycles, the general public is not ready for it and probably would not understand or believe it if I explained it....everything works according to past cycles, and that history repeats itself in the lives of men, nations and the stock market" WD Gann.
His Famous Last Book
W. D. Gann's last book, 45 Years in Wall Street, written when he was 72 years of age, was arguably his best stock market book. It was written with the immense benefit of his lifetime of experience in Wall Street. It was inspired by a desire to pass on his wisdom to others.
As Mr. Gann stated in the book's Foreword:
"I am now in my 72nd year; fame would do me no good. I have more income than I can spend for my needs, therefore, my only object in writing this new book is to give others the most valuable gift possible KNOWLEDGE! If a few find their way to make safer investments my object will have been accomplished and satisfied readers will be my reward." - (Gann, W. D., 45 Years in Wall Street, Lambert-Gann Publishing Co., Pomeroy, WA, 1949, Forward, p. 2.)
W. D. Gann did not believe in pulling punches in his books. He understood the risks involved in trading and investing and believed in giving his students a realistic view of market reality, including knowledge which would help them to control the risk and to profit handsomely.
Early in the book Mr. Gann addresses the issue Why You Have Lost Money in Stocks and How to Make It Back. Under this heading he lists three reasons why many traders lose:
* They overtrade or buy and sell too much for their capital.
* They do not place stop loss orders or limit their losses.
* Lack of Knowledge. This is the most important reason of all.
(Gann, W. D., 45 Years in Wall Street, Lambert-Gann Publishing Co., Pomeroy, WA, 1949, p. 4.)
Every page of 45 Years in Wall Street contains valuable knowledge, however it is W. D. Gann's twenty-four never-failing rules that give traders and investors the benefit of his knowledge. As Mr. Gann states:
In order to make a success trading in the stock market the trader must have definite rules and follow them. The rules given below are based upon my personal experience and anyone who follows them will make a success.
(Gann, W. D., 45 Years in Wall Street, Lambert-Gann Publishing Co., Pomeroy, WA, 1949, p. 16.)
Historical Reference Points Market Forecasting
The idea that everything that happens in the marketplace has historical reference points and has occurred in the past became a guiding principle for Gann.
Time has done a great deal in adding to the legend of W.D. Gann. Yet, despite his four published books and stock and commodity courses he updated over the years, a great deal of mystery has been attached to his methods of forecasting and trading.
It has been asserted that Gann either did not reveal the most important of his secrets, or obscured them in his courses with very little explanation. Here, at Gann Global Financial we believe Gann did reveal his most valuable forecasting techniques. Only by proving their effectiveness by looking back over hundreds of years of data in each commodity market, financial market , and stock market can they be appreciated. When Gann said, "I have more income than I can spend for my needs, therefore, my only object in writing this book is to give others the most valuable gift possible - KNOWLEDGE," we believe he was sincere.
In essence, Gann's teachings on the law of action and reaction in the marketplace are rooted in the fundamental truth that people do not change. They do the same things and respond the same way from one market cycle to the next. By virtue of the power and speed of modern computers, coupled with a desire to help investors and traders build wealth, Gann Global Financial is dedicated to applying W.D. Gann's profound discoveries to craft forecasts in the grand tradition we believe Gann intended them to be made.
Note: During his career, Gann involved himself in mysticism and astrology. Many have followed him down this path. Due to personal convictions, we have steered clear of any practices related to what has historically been considered the occult.
Why did W.D. Gann Prefer Commodities over Stocks?
"To everything there is a season," and the seasonal trends that commodity market prices follow make them actually much easier to forecast than stocks. The problem with conventional seasonal analysis is that analysts look at an average seasonal price curve covering the previous 20 years of the commodity markets, ignoring the overall context in which a market is trading. They lack the unique perspective obtainable only by using a much more extensive historical database of price history for commodities and financials to carefully catalog price moves by formation and stage. And context is the key to maximizing the value of seasonal forecasts because a market customarily displays different seasonal tendencies depending on where it stands in its life cycle.
For example, 25 of the 30 major lows in wheat prices since 1880 hit bottom between June and October. Whenever wheat prices continue sliding to new bear market lows after October, you could probably stay short with confidence at least until June. After a final low in any commodity, the intensity of an initial bull market leg up tends to vary dramatically depending on its point of origin in the season, which can provide invaluable insight in projecting its extent.
Our massive proprietary database enables us to classify every turning point in history based on its month of occurrence, then further narrow our focus according to the specific stage of the market at the turn, promoting even more accurate forecasts.
Did W.D. Gann use mathematical formulas like Fibonacci and Elliott or did he stick to history?
Two of the most legendary market technicians of all-time are W.D. Gann and R.N. Elliott. Elliott is known for applying the fibonacci mathematic formula to the financial markets with proven success.
Both of these men applied natural, observable phenomenon, to the financial markets; and are pioneers in their own right.
To the best of our knowledge, Gann did not use fibonacci in his analysis. But, as a student of the markets and human nature, he committed his life to gaining an understanding of what lay behind market movements. This pursuit led him to develop several theories that did have their basis in mathematics.
In this quote by Gann he discusses his deep study of the markets:
"I soon began to note the periodical reoccurrence of the rise and fall of stocks and commodities. This led me to conclude that natural law was the basis of market movements. I then decided to a devote 10 years of my life to the study of natural law, as applicable to the speculative markets and to devote my best energies toward making speculation a profitable profession."
In our estimation, his most profound discoveries were his "Master Time Factor" and "Time Period" work. These techniques are firmly rooted in the study of history, which reflects human nature in action. You can read about these methods of analysis in the Essential Course which is available to subscribers and members. Get a free look a the first 4 chapters of the Essential Course by clicking here.
Quoting Gann again:
"Everything moves in cycles as a result of the natural law of action and reaction. By a study of the past, I have discovered what cycles repeat in the future. In order to be accurate in forecasting the future, you must know the major cycles.I have experimented and compared past markets in order to locate the major and minor cycles and determine in what years the cycles repeat in the future.
"To make a success you must continue to study past records, because the market in the future will be a repetition of the past. If I have the data, I can tell by the study of cycles when a certain event will occur in the future. The limit of future predictions based on exact mathematical law is only restricted by lack of knowledge of correct data on past history to work from."
As we noted above, during his career, Gann involved himself in mysticism and astrology. Many have followed him down this path. Due to personal convictions, we have steered clear of any practices related to what has historically been considered the occult.
While many have used fibonacci numbers and the wave principle, which have their roots in mathematics, by applying it to commodity markets and the financial markets as R.N. Elliott did, in a similar way, Gann has taken the principle a different observable phenomenon ("History Repeats") and applied it to the commodity market and financial markets as well.
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