Background
W.D. Gann (1878-1955) was one of the most controversial figures in trading history. He claimed to have made $50 million in the markets using geometric and astrological methods, though his actual verified trading record is disputed. His methods — Gann angles, the Square of Nine, time/price squaring — are mathematically complex and have passionate followers and equally passionate sceptics.
Core Methodology
Gann's methodology is based on the idea that price and time have a geometric relationship, and that markets move in predictable patterns based on mathematical and (controversially) astrological cycles. His Gann angles (1×1 = 45°, 2×1, 1×2) create support/resistance levels based on the rate of price change over time. The Square of Nine is a spiral calculator used to project price targets.
Key Trading Rules
- Gann angles: draw from significant highs/lows. The 1×1 (45°) line is the most important — price above = bullish
- The 2×1 angle (steeper) acts as stronger support/resistance than the 1×1
- Square of Nine: used to calculate price targets by 'squaring' price with time (geometric projections)
- Time cycles: markets tend to make important turns at square root intervals of significant highs/lows
- Price and time square: when the number of price units equals the number of time units from a significant point, expect a change in trend
- Anniversary dates: markets tend to make important moves on the anniversary of prior significant highs/lows
Key Concepts
Books & Resources
How to Make Profits in Commodities by W.D. Gann. The Tunnel Thru the Air by W.D. Gann. 45 Years in Wall Street by W.D. Gann.