A Dashing Blade
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tokac said:
The only technical analysis technique that works 100% of the time
With hindsight!
The only technical analysis technique that works 100% of the time
With hindsight!
Only Gann himself new how is methods worked. methodologies are not always easy to define or to analyse.He believed the markets are geometric in design and in function and follow geometric laws. Gann's techniques require that equal time and price intervals be used on the charts. a rise of one price unit over one period of time (1 x 1) will always equal a 45-degree angle. and an ideal balance between time and price exists when prices rise or fall at a 45-degree angle relative to the time axis.
This is called a 1 x 1 angle. each angles provide support and resistance depending on the trend. For example, during an uptrend the 1 x 1 angle tends to provide major support over other angles.Gann spent 10 years researching ancient and contemporary knowledge about how things work before he made his first trades. One component of the simple mathematical principles underlying the Square of Nine can be employed to identify, in advance, potential price and time turning points, which I myself never found.
I studied Gann for 3 years, and found it hard to take in, It looks good when you look back on the chart. but in real time, its vague to say the least. I now use simple price action. I thought years back the more complicated things was the better it would work, But through experience, this is not the case. I now trade full time and trade very simple trading patterns. with correct money management and it seems to work for me,I am not saying Gann don't work,I'm saying I could not master the subject,I no doubt others will make it work.even if they only take 10% of his methods, It could improve your trading.
This is called a 1 x 1 angle. each angles provide support and resistance depending on the trend. For example, during an uptrend the 1 x 1 angle tends to provide major support over other angles.Gann spent 10 years researching ancient and contemporary knowledge about how things work before he made his first trades. One component of the simple mathematical principles underlying the Square of Nine can be employed to identify, in advance, potential price and time turning points, which I myself never found.
I studied Gann for 3 years, and found it hard to take in, It looks good when you look back on the chart. but in real time, its vague to say the least. I now use simple price action. I thought years back the more complicated things was the better it would work, But through experience, this is not the case. I now trade full time and trade very simple trading patterns. with correct money management and it seems to work for me,I am not saying Gann don't work,I'm saying I could not master the subject,I no doubt others will make it work.even if they only take 10% of his methods, It could improve your trading.
ajaskey
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I've read the thread and have studied Gann'ish investing for about a year. I've read a number of this original works in PDF form from the internet. I've read on the internet what a number of people have said who use Gann's ideas. I bought Bill McLaren's course and read that. Here is what I've determined to this point.
Just my opinion. I use parallel lines more than the traditional Gann angles. Gann metioned these in his writings but didn't stress them. I believe these are the most important idea he found. He told people about it but stressed other less useful concepts so others could not copy him.
If you draw a trendline of a move and then slide that line to a previous move you will find that it matches almost identically. Also, you will see the the duration of moves are always about the same length or a multiple of that length. You will see the major trends often start when the major trendline from the previous move intersects that line. This is where the concept of price and time squaring out comes from. And it is amazing how often it occurs in markets - and how easy it is to track.
- Gann's Square of the Range works great.
The 0/50/100% price and volume levels on short to intermediate term chart are amazing. They don't always work which is why Gann preached money management. They do work quite often and provide more than enough opportunities to make money. - Gann's cycle ideas work but are not perfect
The short term cycles usually trump the longer term cycles. The best time to look for buys/sells is when multiple cycles from multiple timeframes end/begin at the same time. - The number 360 works in markets because it is 4 times 90. Earnings reports for stocks and weather cycles (spring/summer/fall/winter) for commodities run 90 days. His main concept was that a commodity or company (based on the business type) had a cycle. Look back at what it did during the previous cycles and you will have a good idea what it will do in the current cycle.
- Gann didn't think much of the average trader or investor and enjoyed a good practical joke.
My guess is Gann tried to tell people his simple theories early in his life and was ignored. People wanted the "holy grail" and it obviously could not be simple. So Gann started seminars about crazy angles and the planets (later in life). This was just a joke. If people would rather pay money for magic than the simple logic, he would give them what they wanted. And laugh all the way to the bank. Not that the truth wasn't in his courses, but he wrapped it in mysticism. - Gann angles do work, BUT...
People draw too many of them. Gann never drew that many lines on his charts - except the ones for courses he taught. I think the big disconnect is people who study Gann can't understand his work because many of his personal charts contain less info than his courses. My theory is that is because he never used most of what he taught... because it was just a practical joke.
Just my opinion. I use parallel lines more than the traditional Gann angles. Gann metioned these in his writings but didn't stress them. I believe these are the most important idea he found. He told people about it but stressed other less useful concepts so others could not copy him.
If you draw a trendline of a move and then slide that line to a previous move you will find that it matches almost identically. Also, you will see the the duration of moves are always about the same length or a multiple of that length. You will see the major trends often start when the major trendline from the previous move intersects that line. This is where the concept of price and time squaring out comes from. And it is amazing how often it occurs in markets - and how easy it is to track.
With regards to Gannism;
Gannism is esoteric, not easily understood, possibly highly discretionary, and thus always viewed with suspicion.
As to the origins of the time theory element to Gannism the following caught my attention.
In 1913, a PhD was published by Bachelier in France, and demonstrated via rather complex mathematical equations that, price fluctuations grow in range and will be proportional to the square root of time
Stock prices in the United States over the last 100 years have 66% of the time fluctuated within a range of 5.9% on either side of their average.
The range in a course of a year has not been 72% or a multiple of 12 [year] rather, it has averaged around 20%
This is 3.5 times the monthly range.
The square root of 12 = 3.46
--------------------------------------------------------------------------------
The above caught my eye;
Intrestingly, this is another application of higher mathematics, referring to chaos
This is chaos in the mathematical definition, not your standard day-to-day useage.
In it's simplest form chaos can be written;
4x{1 - x}
Computing the value of *x* of that expression for some initial value of *x* then substituting this answer back into the original expression starts a feedback loop.
Repeating this simple iterative process repetitively produces surprisingly complex, unpredictable mathematical behaviour.
The mathematical behaviour expresses the same kind of disorder produced by non-linear equations
The simplest non-linear equation;
Xn+1 = KXn - KXn(1 - Xn)
This equation determines the future value of the variable x at the time step n + 1 from the past value of x at time step n
This is known as the logistic equation
All well and good, but, what the hell is this to do with the Gannies?
Logistic equations are used in Medicine to predict population expansion, via Birth rates, Death rates, due in part to availability of food, water, arable land, disease etc.
It can also be used in ecology, for populations of insects, crops, etc.
Gann was interested in commodities.
Wait, there's more.
The logistic equation is a quadratic equation with a linear first term, and, a non-linear second term
It is the non-linear, or feedback component that is important.
For a given value of K once a starting point Xo is specified, the evolution of the system is fully determined. One step, inexorably leads to the next.
The whole process can be pictured on a graph.
It forms a parabola, that opens downwards.
There is a short-cut provided via the graphical representation, that avoids endless computations.
Re-read the quote at the start of this post;
The addition of a 45 degree line up from the horizontal axis [representing the line Xn+1 = Xn]
The best course is to steer is from Xo vertically to the parabola to reach X1 then horizontally to the 45 degree line, and vertically back to the parabola.
These paths or Orbits give the first indication of which routes lead to the erratic behaviour of chaos
Whereas some orbits converge, on one particular value, others jump back and forth among a few possible values, and many roam, never settling anywhere.
When K is between 1 & 3, just about every route no matter where it starts, is eventually attracted to a specific value called a fixed point which occurs where the parabola intersects the 45 degree line at x = [k - 1]/k This corresponds to to a steady state or equilibrium
Therefore, taking the previous mathematical work performed by Bachelier, combined with a logistic equation, and you can reproduce seemingly Gann.
The question is, historically, who, and at what date, was the initial work completed in logistic equations?
How did Astrology get involved?
Mathematicians have always historically been associated with planetary movements orbits etc.
Gannism is esoteric, not easily understood, possibly highly discretionary, and thus always viewed with suspicion.
As to the origins of the time theory element to Gannism the following caught my attention.
In 1913, a PhD was published by Bachelier in France, and demonstrated via rather complex mathematical equations that, price fluctuations grow in range and will be proportional to the square root of time
Stock prices in the United States over the last 100 years have 66% of the time fluctuated within a range of 5.9% on either side of their average.
The range in a course of a year has not been 72% or a multiple of 12 [year] rather, it has averaged around 20%
This is 3.5 times the monthly range.
The square root of 12 = 3.46
--------------------------------------------------------------------------------
The above caught my eye;
Intrestingly, this is another application of higher mathematics, referring to chaos
This is chaos in the mathematical definition, not your standard day-to-day useage.
In it's simplest form chaos can be written;
4x{1 - x}
Computing the value of *x* of that expression for some initial value of *x* then substituting this answer back into the original expression starts a feedback loop.
Repeating this simple iterative process repetitively produces surprisingly complex, unpredictable mathematical behaviour.
The mathematical behaviour expresses the same kind of disorder produced by non-linear equations
The simplest non-linear equation;
Xn+1 = KXn - KXn(1 - Xn)
This equation determines the future value of the variable x at the time step n + 1 from the past value of x at time step n
This is known as the logistic equation
All well and good, but, what the hell is this to do with the Gannies?
Logistic equations are used in Medicine to predict population expansion, via Birth rates, Death rates, due in part to availability of food, water, arable land, disease etc.
It can also be used in ecology, for populations of insects, crops, etc.
Gann was interested in commodities.
Wait, there's more.
The logistic equation is a quadratic equation with a linear first term, and, a non-linear second term
It is the non-linear, or feedback component that is important.
For a given value of K once a starting point Xo is specified, the evolution of the system is fully determined. One step, inexorably leads to the next.
The whole process can be pictured on a graph.
It forms a parabola, that opens downwards.
There is a short-cut provided via the graphical representation, that avoids endless computations.
Re-read the quote at the start of this post;
The addition of a 45 degree line up from the horizontal axis [representing the line Xn+1 = Xn]
The best course is to steer is from Xo vertically to the parabola to reach X1 then horizontally to the 45 degree line, and vertically back to the parabola.
These paths or Orbits give the first indication of which routes lead to the erratic behaviour of chaos
Whereas some orbits converge, on one particular value, others jump back and forth among a few possible values, and many roam, never settling anywhere.
When K is between 1 & 3, just about every route no matter where it starts, is eventually attracted to a specific value called a fixed point which occurs where the parabola intersects the 45 degree line at x = [k - 1]/k This corresponds to to a steady state or equilibrium
Therefore, taking the previous mathematical work performed by Bachelier, combined with a logistic equation, and you can reproduce seemingly Gann.
The question is, historically, who, and at what date, was the initial work completed in logistic equations?
How did Astrology get involved?
Mathematicians have always historically been associated with planetary movements orbits etc.
ajaskey
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timsk said:
Sure. The square of the range I used started in Oct 2005 and ended in May 2006. Currently it looks like it will hit 50% retrace in price at 50% time. Anything above 50% in price at 50% in time is bullish. Notice how the previous moves followed the same slope - and how the bold 1:1 diagonals actually were significant before I started watching it like this.
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Akuma99
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Gann's work is an interesting one, some of his teaching I think are a smokescreen for what he really used. Gann angles do work, squaring of price and time also works, and after banging heads with other Gann enthusiasts over at http://www.beginnertrader.com/forum2/ there are some other methods that work to in my opinion, and from experience.
Most people give up on Gann's work due to the work needed in deciphering what is useful and what was just thrown in there for fun, but it is worth it in the end.
Most people give up on Gann's work due to the work needed in deciphering what is useful and what was just thrown in there for fun, but it is worth it in the end.
Hi
I have read Gann's biography. He spend all day and night on the market and had a great feel for it. True to yesteryears' Wall street traders, he never published any of his work. Whatever we have are small excerpts. I think Gann's techniques can work for you if you find a method to use them - no one can teach you that. I personally find that todays markets are too volatile and they are not useful for leveraged short-term trading.
S Ghosh
I have read Gann's biography. He spend all day and night on the market and had a great feel for it. True to yesteryears' Wall street traders, he never published any of his work. Whatever we have are small excerpts. I think Gann's techniques can work for you if you find a method to use them - no one can teach you that. I personally find that todays markets are too volatile and they are not useful for leveraged short-term trading.
S Ghosh
tokac said:
Arek Okrasa
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Hello laptop1
Are you still trading? Sorry fo the question, but is not easy to meet full-day traders.
Could you share a little bit of your experience, please? For example, could you recommend a software you use...on which market do you trade?
How long it takes to start being confident and become a full-day trader?
As you said Gann isn`t for you - thank you for this opinion.
Regards,
Arek
Are you still trading? Sorry fo the question, but is not easy to meet full-day traders.
Could you share a little bit of your experience, please? For example, could you recommend a software you use...on which market do you trade?
How long it takes to start being confident and become a full-day trader?
As you said Gann isn`t for you - thank you for this opinion.
Regards,
Arek
I like this a lot ...
W D Gann's Forecasting Method Applied To Currencies
This thread discussing W D Gann and his theories has become inactive.
However, anyone still interested in the subject might like to read an article in the latest Market Technician (the journal of the Society of Technical Analysts) on Gann’s forecasting method applied to the currency markets.
This article by James Smithson is entitled “Extending The Frontiers Of Technical Analysis: The Application Of W D Gann’s Forecasting Method To The Currency Markets.”
Here is a link: https://www.scribd.com/document/378...-s-Forecasting-Method-To-The-Currency-Markets
This thread discussing W D Gann and his theories has become inactive.
However, anyone still interested in the subject might like to read an article in the latest Market Technician (the journal of the Society of Technical Analysts) on Gann’s forecasting method applied to the currency markets.
This article by James Smithson is entitled “Extending The Frontiers Of Technical Analysis: The Application Of W D Gann’s Forecasting Method To The Currency Markets.”
Here is a link: https://www.scribd.com/document/378...-s-Forecasting-Method-To-The-Currency-Markets
David Knight
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IMO, you are misrepresenting Gann's view on the relationship between price and time. Gann's view is that in determining turning points, time is an important consideration besides price. In fact Gann believes that time had the strongest influence on the market because when time is up, the trend changes. Expressed differently, price and time must balance before the market turns. The underlying premise is that Gann subscribes to the law of vibration and that every financial instrument is subject to some kind of vibration in price and time. The problem is Gann uses a variety of tools including swing cycles, anniversary dates, natural cycles, geometric angles, the squaring of price and astrology which created a lot of complexity in approach, mystery and controversy. This is further compounded by the need to use scaling when applying some of the tools to the instruments.
Conceptually the idea of price and time is sound because any price movement cannot be meaningfully measured without relating to some measure of unit of time. The problem is that applying Gann's method to trading can make the approach highly complex and any ensuring benefit highly questionable. Personally I do use Gann's concept of price and time but in a very simplistic manner.
Pat494
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Can't help thinking that Gann was as baffled with forecasting financial instruments as the rest of us and in his frustration after using up the simple methods with no success went increasingly into the fantasy.
Kept his supporters fed with something mysterious and even nonsensical to combat failure and disillusionment, to sell his courses.
Kept his supporters fed with something mysterious and even nonsensical to combat failure and disillusionment, to sell his courses.
What I find is that the people who do know Gann methods that work either don't want to share them or will only reveal a few clues. I have a Constance Brown book "Technical analysis for the trading professional" where she states that of all the methods she uses, the Gann wheel is the one she would least like to relinquish. She also mentions that there is one small bit of information that is missing from most books and courses but then decides not to reveal what it is. Anyone care to share that here
https://en.wikipedia.org/wiki/Quantitative_easing
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