Gann Basics

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" colspan=2 height=90 BGCOLOR="#006699" TEXT="#080000" background="10a085a3.jpg"> <div> <FONT SIZE="5" COLOR="#FFFFFF" FACE="Arial" ><B>   WaveTrader Software for eSignal</B></FONT><B>    </B><B> |     </B><A HREF="index.htm" TARGET="_top" TITLE=" WaveTrader Software for eSignal"><U><B>home</B></U></A></div> <div> <A HREF="id107.htm" TARGET="_top" TITLE="WaveTrader XABCDs"><U>WaveTrader XABCD's</U></A>   |   <B>Gann Basics</B></div> <div> </div> </td> </tr><tr> <td valign="top" width=210 BGCOLOR="#FFFFFF" TEXT="#080000" background="10bd2e83.jpg"> <div> This is original material I published between 1987 and 1998 and subsequently upgraded in 2002 in my Dynamic Time and Price Book.</div> <bR> <div> The reason I am reproducing these chapters here is to help you stop getting ripped off. It is amazing to me that so many people want to learn all these things when most of the them will not help you to trade, yet vendors seek to have you pay thousands of dollars just to show you things that will not help you at all.</div> <bR> <div> Some Gann approaches are useful but most of the esoteric things like squaring price into time and time into price are useless.</div> <bR> <div> Also the planetary approaches preached by many have a 10% chance of picking a market reversal these days. When they were popular they may have had a better chance,</div> <bR> <bR> </td> <td valign="top" height=390 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> <I>Gann Basics</I></div> <DIV ALIGN="LEFT"></DIV> <div> <I>Chapter 18 (Price Action [C] 2007)</I></div> <div> <I>Gann Techniques: </I><FONT SIZE="3" COLOR="#000000" FACE="Tahoma" ><I>(reprinted from my earlier material - this article should save you money and the expense of attending any Gann seminars).</I></FONT></div> <bR> <div> Time by Degrees</div> <div> W.D. Gann I think can be credited for the introduction of time by degrees to the world of technical analysis. Gann often mentioned the square of 360 and the divisions and multiples of 360 in his work. He was referring to the degrees in the circle of 1 year.</div> <bR> <div> A year is the dominant natural cycle that influences our lives and our activities. In a solar year we have 365 1/4 days but the circle of 1 year is 360 degrees and it can be subdivided into 4 seasons of 90 degrees each.</div> <bR> <div> Time by degrees is not a simple ratio of days in the year, e.g., you cannot calculate 1 degree as 365 divided by 360. Time by degrees must be calculated from the position of the Earth relative to the Sun in its orbit of 360 degrees. 1 day is only the time it takes for the Earth to spin on its axis.</div> <bR> <div> <IMG SRC="5ebd5790.png" border=0 width="725" height="633" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <div> The time relationship between days and degrees speeds up and slows down.</div> <bR> <div> The Earth moves through an elliptical orbit around the Sun, not a perfect circle. As a result the relationship between days and degrees speeds up as the Earth is moving closer to the Sun and slows down as the Earth is moving away from the Sun. The two points in the elliptical orbit where the Earth is closest and furthermost from the Sun are known as the PERIGEE and the APOGEE.</div> <bR> <div> The seasons of the year are determined by the TILT or AXIS of the Earth. As the Earth circles around the Sun the direct path of the Suns rays move in relationship to the surface of the Earth. The hours of sunlight vary in length from day to day. </div> <bR> <div> If you live in the southern hemisphere the shortest day is the June Solstice and the longest day is the December Solstice. On the Equinox days the daylight hours are equal to the hours of darkness.</div> <bR> <div> Due to the elliptical orbit of the Earth the relationship between days and degrees varies.</div> <bR> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="585" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 19 WIDTH="140"><div> 1-90 degrees</div> </tD> <tD VALIGN=TOP><NOBR><div> 91-180 degrees</div> </NOBR></tD> <tD VALIGN=TOP><NOBR><div> 181-270 degrees</div> </NOBR></tD> <tD VALIGN=TOP><NOBR><div> 271-360 degrees</div> </NOBR></tD> </tR> </TABLE></div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="585" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 19 WIDTH="140"><div> 89 days</div> </tD> <tD VALIGN=TOP WIDTH="140"><div> 89 days</div> </tD> <tD VALIGN=TOP WIDTH="140"><div> 93 days</div> </tD> <tD VALIGN=TOP WIDTH="140"><div> 94 days</div> </tD> </tR> </TABLE></div> <bR> <div> If you are comparing a time cycle that occurred between 0-180 degrees and one that occurred between 180-360 degrees the calendar day counts will vary dramatically with the degree counts.</div> <bR> <div> Counting time by degrees keeps seasonal time periods uniform. To calculate TIME BY DEGREES requires the use of a planetary ephemeris.</div> <bR> <div> Gann Critical Seasonal Dates</div> <bR> <div> Gann taught that the cardinal points of the year were important to watch for change in trend.</div> <bR> <div> The Equinox and Solstice as well as the Perigee and Apogee days are natural cyclic events. </div> <bR> <div> If you study past markets you will find an abundance of trend changes falling on or close to these dates.</div> <bR> <div> Gann Anniversary Dates</div> <bR> <div> Gann also taught that it was important to watch the anniversary dates of past trend change dates in any market for a sign of a reversal in trend.</div> <bR> <div> Counting Time between Change in Trend dates</div> <bR> <div> Gann taught that TIME COUNTS using a square number series could often pinpoint future dates where change in trend will occur.</div> <bR> <div> Time counts in days, degrees, weeks, months and years are made from extreme intermediate degree market highs and lows.</div> <bR> <div> Gann taught that by counting TIME BY DEGREES, in divisions of a year of 360 degrees, from prior market highs and lows of importance could produce clusters of future dates where a change in trend could occur.</div> <bR> <div> Gann's square of 52 was a weekly square used on weekly charts, i.e., divisions of a year.</div> <bR> <div> Gann's square of 90 is ¼ of a year or 360. His square of 90 weeks relates to 1.732 years (root of 3). Gann's square of 144 is 1/5<FONT SIZE="1" COLOR="#000000" FACE="Arial" >th</FONT> of 720 degrees or 2 years.</div> <bR> <div> Progressions of time in divisions of 360 became important to Gann in measuring potential time between changes of trend in markets. From my subsequent studies I have found that many changes in trend have in fact fallen exactly on these time counts from prior change in trend dates.</div> <bR> <div> The significant ones I have noted have been: -</div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="605" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 19 WIDTH="55"><div> 90</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 120</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 180</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 240</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 270</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 360</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 450</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 540</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 630</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 720</div> </tD> </tR> </TABLE></div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="605" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 19 WIDTH="55"><div> 144</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 288</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 432</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 576</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 720</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 864</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 1008</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 1152</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 1296</div> </tD> <tD VALIGN=TOP WIDTH="55"><div> 1440</div> </tD> </tR> </TABLE></div> <bR> <div> TIME BY DEGREE COUNTS</div> <bR> <div> This methodology has become a trademark for Gann's supposed success in predicting a future change in trend date for any free trading market. Although the calculations have some validity in nature they must also be qualified as to their true value. I have found that many change in trend tops or bottoms in markets conform to some of Gann's time counts. I have also found that many did not!</div> <bR> <div> To count off TIME BY DEGREES Gann style all one has to do is calculate the future date ? degrees from a known high or low date. If you extrapolate the process from numerous past highs and lows you will construct a table of dates that will highlight clusters of future dates. These future dates are a Gann warning date where change in trend may occur. 90&180 is a popular count.</div> <bR> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="597" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 19 ><NOBR><div> Squares</div> </NOBR></tD> <tD VALIGN=TOP WIDTH="69"><div> 30</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 60</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 90</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 120</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 150</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 180</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> Etc.</div> </tD> </tR> </TABLE></div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="597" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 19 ><NOBR><div> Squares</div> </NOBR></tD> <tD VALIGN=TOP WIDTH="69"><div> 45</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 90</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 135</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 180</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 225</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 270</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> Etc.</div> </tD> </tR> </TABLE></div> <bR> <div> GANN SQUARE OF 9</div> <div> <IMG SRC="5da0cfb0.jpg" border=0 width="524" height="507" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <div> Probably the most believed tool of Gann's being used in the markets today is his square of 9. Price moves out from the centre and starts a circle.  </div> <bR> <div> Gann taught that trends moved in price increments related to the cardinal angles in the circle on the square of 9. He considered that when price had moved 45, 90, 180, 135, 180, 225, 270, 315 or 360 degrees from its last origin it would run into resistance or support - in Gann's words the price was “square” at those levels.</div> <bR> <div> The degrees on the circle of the Square of 9 can be calculated using the square roots of numbers.</div> <div> For instance: - </div> <bR> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="598" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 19 WIDTH="70"><div> No#</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 9</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 16</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 25</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 36</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 49</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 64</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 81</div> </tD> </tR> </TABLE></div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="598" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 19 WIDTH="70"><div> Root</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 3</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 4</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 5</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 6</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 7</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 8</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 9</div> </tD> </tR> </TABLE></div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="598" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 38 ><NOBR><div> Degrees</div> <div> Apart</div> </NOBR></tD> <tD VALIGN=TOP WIDTH="69"><bR> <div> 0</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 180</div> </tD> <tD VALIGN=TOP WIDTH="69"><bR> <div> 360</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 540</div> </tD> <tD VALIGN=TOP WIDTH="69"><bR> <div> 720</div> </tD> <tD VALIGN=TOP WIDTH="69"><div> 900</div> </tD> <tD VALIGN=TOP WIDTH="69"><bR> <div> 1080</div> </tD> </tR> </TABLE></div> <bR> <div> GANN SWING CHARTS</div> <bR> <div> The Gann swing chart is a simple indicator to keep you aware of the short-term trend.</div> <bR> <div> Gann recommended 2 types of swing charts.</div> <bR> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="579" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 19 WIDTH="282"><div> 2 day swing</div> </tD> <tD VALIGN=TOP WIDTH="282"><div> 3 day swing</div> </tD> </tR> </TABLE></div> <bR> <div> The swing chart swings up and down depending on the current days trading range when compared with the prior 2 or 3 days trading range.</div> <bR> <div> The rules for the 2 or 3-day chart are as follows: -</div> <bR> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="573" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 38 WIDTH="21"><div> 1</div> </tD> <tD VALIGN=TOP><NOBR><div> The trend is up when the market makes higher highs without crossing</div> <div> below the prior 2 or 3 day low</div> </NOBR></tD> </tR> </TABLE></div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="573" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 38 WIDTH="21"><div> 2</div> </tD> <tD VALIGN=TOP><NOBR><div> The trend is down when the market makes lower lows without crossing</div> <div> above the prior 2 or 3 day high.</div> </NOBR></tD> </tR> </TABLE></div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="573" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 38 WIDTH="21"><div> 3</div> </tD> <tD VALIGN=TOP><NOBR><div> When prices are very active, i.e., wide range days in a blow off  move you</div> <div> can record a swing on a 1 day reaction for the 2 day chart.</div> </NOBR></tD> </tR> </TABLE></div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="573" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 38 WIDTH="21"><div> 4</div> </tD> <tD VALIGN=TOP><NOBR><div> When prices are very active you can record a swing on the 3 day chart</div> <div> if it makes 3 consecutive days with new lows or highs.</div> </NOBR></tD> </tR> </TABLE></div> <bR> <div> Gann's Over-balancing of price.</div> <bR> <div> In an advancing market watch the price ranges of the counter trend moves. </div> <bR> <div> Once the next reaction has exceeded the price range of the previous, price is said to be over-balanced and the trend is changing. The opposite works in a falling market. As each trend matures reactions should be reducing in both time and price. </div> <bR> <div> OTHER NUMBERS GANN MENTIONED related to time & price</div> <bR> <div> SQUARES AND POWERS OF NUMBERS 3 to 7</div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="593" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 19 WIDTH="93"><div> No#</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> Power ^2</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> Power ^3</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> Power ^4</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> Power ^5</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> Power ^6</div> </tD> </tR> </TABLE></div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="593" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 19 WIDTH="93"><div> 3</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 9</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 27</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 81</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 243</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 729</div> </tD> </tR> </TABLE></div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="593" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 19 WIDTH="93"><div> 4</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 16</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 64</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 256</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 1024</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 4096</div> </tD> </tR> </TABLE></div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="593" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 19 WIDTH="93"><div> 5</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 25</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 125</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 625</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 3125</div> </tD> <tD VALIGN=TOP WIDTH="93"><IMG BORDER="0" SRC="1x1.gif" HEIGHT="19" ALIGN="bottom" WIDTH="93" HSPACE="0" VSPACE="0"></tD> </tR> </TABLE></div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="593" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 19 WIDTH="93"><div> 6</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 36</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 216</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 1296</div> </tD> <tD VALIGN=TOP WIDTH="93"><IMG BORDER="0" SRC="1x1.gif" HEIGHT="19" ALIGN="bottom" WIDTH="93" HSPACE="0" VSPACE="0"></tD> <tD VALIGN=TOP WIDTH="93"><IMG BORDER="0" SRC="1x1.gif" HEIGHT="19" ALIGN="bottom" WIDTH="93" HSPACE="0" VSPACE="0"></tD> </tR> </TABLE></div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="593" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 19 WIDTH="93"><div> 7</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 49</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 343</div> </tD> <tD VALIGN=TOP WIDTH="93"><div> 2401</div> </tD> <tD VALIGN=TOP WIDTH="93"><IMG BORDER="0" SRC="1x1.gif" HEIGHT="19" ALIGN="bottom" WIDTH="93" HSPACE="0" VSPACE="0"></tD> <tD VALIGN=TOP WIDTH="93"><IMG BORDER="0" SRC="1x1.gif" HEIGHT="19" ALIGN="bottom" WIDTH="93" HSPACE="0" VSPACE="0"></tD> </tR> </TABLE></div> <bR> <div> The problem is that when you start counting all these numbers off former highs and lows they become confusing as to their possible validity as a technical indicator.</div> <bR> <bR> <div> GANN SQUARING PRICE INTO TIME & TIME INTO PRICE</div> <bR> <div> One of Gann's techniques of analysis for determining market tops and bottoms was to "square" price into time and time into price. When one or the other became square he would look at it as a signal for a change in trend.</div> <bR> <div> There are 3 distinct approaches: -</div> <bR> <div> 1. Squaring a high or low price forward in time.</div> <bR> <div> In the example below the All Ord's 1987 low was 1149. The first "square" of 1149 counted in "degrees" fell within 1 day of the 1991 low.</div> <bR> <div> 2. Squaring a price range forward in time.</div> <bR> <div> There are 2 examples below, the points decline between the 1987 high and the 1987 low was 1163 points. The calendar day count between the 1987 low and the 1991 low was 1163 days exactly. The price range between the 1987 high and the 1991 low was 1113 points, the calendar days from the 1991 low to the 1994 high was 1113 days exactly.</div> <bR> <div> 3. Squaring time between highs and lows forward in price units.</div> <bR> <div> My first example is below, the time between the 1987 low and the 1991 low came out at 1148 degrees. The point's rise to the 1994 high was 1150 points.</div> <bR> <div> <IMG SRC="5eaa0af0.png" border=0 width="672" height="431" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <bR> <bR> <bR> <div> When squaring time into price units you can take the time between two market swing dates. The price units are calculated from the ending date of the time cycle you are going to "square".</div> <bR> <div> My comments: -</div> <bR> <div> I have been monitoring these analysis methods of Gann's for years and years and even tho I can find examples to demonstrate them occasionally I don't feel they are going to advantage anyone as a primary trading tool.</div> <bR> <div> I can see more structure in the market using my geometric approach to dynamic time and price analysis.</div> <bR> <div> The problem with the Gann approach to time squaring future price or price squaring future time is that you can only use them on certain markets that are trading at price levels which allow them to fit.</div> <bR> <div> For instance the methods seem to work OK in complexes such as the Grains and the All Ordinaries but they seem to have no validity in markets like the currencies for example. Of course they might have if you could isolate what the degree of price was that related to time. A commodity that has a small price range may have to be reduced to 1/8<FONT SIZE="1" COLOR="#000000" FACE="Arial" >th</FONT> increments or decimal places to compare the squaring of time results.</div> <bR> <div> This becomes a tedious course to follow as we have no idea what 1 unit of price to use that would be reliable against 1 unit of time.</div> <bR> <bR> <bR> <div> GANN ZERO ANGLES</div> <bR> <div> Gann zero angles are another technique for squaring price to time.</div> <bR> <div> The way this works is that the price being tested is a value that equals a time from some other past important chart point.</div> <bR> <div> For instance the All Ordinaries extreme 1991 low was 1199 points and it was 1199 degrees elapsed time from the date of the 1987 high (the then all time high).</div> <bR> <div> I have found examples of this technique working in the past but they are so few and far between. I wouldn't use or recommend the method as a primary analysis tool. But I still monitor the major campaign swings to check the method.</div> <bR> <div> <IMG SRC="5ec18d00.png" border=0 width="792" height="464" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <bR> <bR> <div> I have devised a fast method to check all the Gann teachings in my DOS swing chart software. I don't work them out in advance, all I do is check them when a new high or low is forming that may be important.</div> <bR> <bR> <div> <IMG SRC="5ed2fbe0.png" border=0 width="815" height="446" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <bR> <div> It often amazes people how I knew these things the day they happened or the day after.</div> <bR> <div> All my calculations are to the day or degree. I believe in accuracy if you are going to do something properly. During the period of these examples I am showing you, the self proclaimed Gann Guru in Australia was teaching students to plot everything by hand on 5 foot high charts.</div> <bR> <bR> <div> GANN ANGLES</div> <bR> <div> Contrary to popular belief Gann angles are just another method for visually squaring price to time.</div> <bR> <div> Most Gann students are using the technique incorrectly, they think that the Gann 1x1, 1x2, 1x3 are market support angles in an uptrend and resistance in a downtrend. Well, they are no such thing! </div> <bR> <div> They may have some self-fulfilling tendency from time to time but they are really not support or resistance angles. You can work that out by the number of times a longer-term trend will cross backwards and forwards along the angles, finally the trend terminates itself on one of the them.</div> <bR> <div> A standard Gann 1x1 is drawn on a chart at the rate of 1 unit of time to 1 unit of price. A 2x1 is two units of price to one unit of time.</div> <bR> <div> <IMG SRC="5ee1bc70.png" border=0 width="795" height="455" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <bR> <bR> <div> The value in the angles is purely mathematical as Gann taught students to look for a termination of a trend when time and price became square.</div> <bR> <div> Now “square” could be represented by a trend that terminates on 2 units of price to 1 degree of time, 1 unit of price to 1 degree of time and even ½ a unit of price to 1 degree of time.</div> <bR> <div> I can even show you examples of time and price squaring in other ratios of the sacred canon, i.e., 1.618 units of price to 1 degree of time or 1.414 units of price to 1 degree of time.</div> <bR> <div> The possibilities are endless</div> <bR> <bR> <bR> <div> GANN PRICE RETRACEMENT LEVELS OF A PRIOR RANGE</div> <bR> <div> This technique of analysis allows you to relate price range to price range geometrically and is the most popular Gann tool used today.</div> <bR> <div> The units risen in a bull market are related to the units fallen in a bear market or vice versa.  This technique is useful in any time frame, relationships can be worked out between moves which occur very short term  or long term.</div> <div>  </div> <div> Gann taught students that ratio retracements of prior ranges were very important for determining change of trend and worked with 1/8ths and 1/3rds  of the prior range. </div> <bR> <div> The 50% level is the most important level of any prior range according to Gann.  50% is also known as the balance point.</div> <bR> <div> Unfortunately the World works to an unfolding natural geometry and often requires other relationships for the continuing price structure to remain geometric.</div> <bR> <div> Elliott Wave recommends ratios of 0.382, 0.50, 0.618 as the most important. </div> <bR> <div> We have found there is another element of geometry involved and ratios of 0.577 and 0.707 that are related harmonically to the square and the cube can be equally important under certain circumstances.</div> <bR> <div> <IMG SRC="5ef0fe30.png" border=0 width="783" height="483" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <bR> <bR> <div> GANN PERCENTAGE CHANGE TO PRICE</div> <bR> <div> Any square value change in price was also a price target for a termination.</div> <bR> <bR> <bR> <div> GANN ALTERNATE RANGE LEVELS</div> <bR> <div> Price ranges between alternate trends of similar degree will often relate when a market terminates trend without making any identifiable retracement level of the prior range.</div> <bR> <div> Price can “square” either directly, as in a retracement, or it can square with the alternate wave, i.e., the wave prior of similar degree heading in the same direction. One way or the other support or resistance will be clear.</div> <bR> <div> To calculate possible support or resistance levels in advance project ratios of the alternate trend from the beginning of the current trend.</div> <bR> <div> A keen Gann student will always know in advance the Alternate wave levels and the retracement levels in any market campaign.</div> <bR> <div> <IMG SRC="5f028cc0.png" border=0 width="808" height="460" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <bR> <div> When the move down began you would be using the prior smaller correction wave, once it was over balanced you would move back in wave degree to an Alternate wave that was greater in amplitude.</div> <bR> <div> The secret to identifying market geometry is in the evaluation of which waves relate in similar degree. If you can identify those relating with perfect geometry it is then possible to forecast the future.</div> <bR> <div> The future is only going to be a repetition of the past in similar degree, the ratio relationships may rotate from the square to the golden mean or to the circle geometry of the pyramid - but they will relate geometrically as the market patterns unfold.</div> <bR> <bR> <div> PRICE RANGES unfolding IN TRENDS OF SIMILAR DEGREE</div> <bR> <div> Unfolding price ranges can relate to each other equally or they can expand. If they expand they are said to be impulsive.</div> <bR> <div> Each impulse range can relate by a ratio of the preceding range of similar degree.</div> <bR> <div> In the example below of the Sydney Share Price Index expanding upwards from the 2086 low, 17th July 1996 to the 2520 high (2520 = 7x360), 19th February 1997, there were three distinct low to high ranges of equal proportion. </div> <bR> <div> After the first two expansions of 224 points were recognised, myself and several analysts I know calculated that 2518 would equal a triple wave range of similar degree when measured from the take off point 13th December 1996 at 2294. We realised that the market would suffer selling at that point.</div> <bR> <div> The fact that 2518 fitted in with all the other price projections confirmed it as a very important level.</div> <bR> <div> When the 2520 high was made time and price squared at 2 points per day from the 17th July 1996 low, another important Gann observation!</div> <bR> <div> When you are looking for additional confirmation of price squaring you can monitor both the cash market and the futures contract, it will help you immensely. But this one was the set up to end all set ups.</div> <bR> <bR> <div> <IMG SRC="67916cf0.png" border=0 width="790" height="463" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <bR> <bR> <div> SFE - Sydney Share Price Index - 1991 Low</div> <bR> <div> It is important to understand the intricate ways markets can relate in time and price. Studying the works of W.D. Gann and R.N. Elliott opened my eyes and I will never forget it. Since then I have taken these theories to a higher level.</div> <bR> <div> By combining both the Gann & Elliott disciplines, together with pattern and trend and long-term cycle analysis it is possible to explain every major market reversal very close to it actually beginning.</div> <bR> <div> At the time of the 1991 low in the All Ordinaries Index I noted the following time and price relationships within the Share Price Index, which is the futures derivative. I have often mentioned these relationships to students, but, this is the first time I have put them into print. If you study everything contained in this text you will be prepared when similar situations repeat in the future.</div> <bR> <div> Use my examples to get your ideas on what to look for when a market changes trend, if you explore the past it will open your eyes to the power possible from this knowledge.</div> <bR> <bR> <div> <IMG SRC="5f204410.png" border=0 width="772" height="577" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <bR> <div> Keep a record of important events and you will learn to anticipate new ones.</div> <bR> <div> Since the 1987 crash the Sydney Share Price Index has traded through 3 major bear markets. </div> <div> It's important for the future to note that the 1992 & 1994 bear markets were ratios in time of the 1989-1991 bear market. Any future bear market should relate in time, by ratio, to one of these prior bear markets.</div> <bR> <div> I know in the future we will experience another bear market similar to one of these, especially in regards to a large price decline. Once the next bear market takes hold I will be looking at future dates that fall on ratios of time to one of these bear markets.</div> <div> At most major market reversals you will find perfect cycles of time generated from prior highs and lows. Often but not always the TIME or PRICE counts fall on important numbers mentioned. </div> <bR> <div> The problem with time counting the Gann way using static numbers from prior swing highs and lows is when you put them altogether you will end up with a “Gann pressure day” for everyday of the year.</div> <bR> <div> Gann repeatedly states in his writings and books, "The future is just a repetition of the past; there is nothing new under the Sun." </div> <bR> <div> The future is working out time and price to everything which went before in similar degree.</div> <bR> <div> Gann implies if you are prepared to study the past, then, the future will explain itself as it unfolds. This is perfectly true as human nature does not change.</div> <bR> <bR> <div> <B>My point of view is this:</B></div> <bR> <div> <B>Many of the Gann esoteric techniq</B><B>ues ar</B><B>e low probability tools and could be superfluous as an aid to your trading.</B></div> <bR> <div> <B>Nevertheless his overbalancing and his 1:1 equal swings rules, price retracements and alternate wave rules, also the  percentage change teachings and natural psychological levels, together with his swing charting approach are pearls of wisdom.</B></div> <bR> <div> The original so called “Gann Secrets” were promoted by Billy Jones, who purchased Gann's library from Lambert his partner and publisher,  these were grossly overstated; mainly because the promoter invented a story that Gann charged $5000 for a weekend course in 1954 and was supposed to have made over $50,000,000 in his trading career.</div> <bR> <div> There is no evidence to verify any of this and knowing Billy Jones (who is deceased now), one has to take it all with a grain of salt.</div> <bR> <bR> <div> So take it for what it is worth, you could have paid $5000 to find out what I have basically just told you for free.</div> <bR> </td> </tr></table></body>