William Delbert Gunn, best known worldwide as W. D. Gann, is a legend in the world of stock trading. He was one of the most successful, ever lived, stock traders.
W. D. Gann was born 6 June 1878 on a farm about seven miles from Lufkin, in texas. He was the first of 11 children of Sam Huston Gunn and Susan Gunn. The Gunn family lived in a very small house without any frills. They were poor and young Willie walked seven miles to Lufkin for three years, to attend school. His father was a farmer in Angelina Country.. They were all worried about the price, which their cotton will bring. If you asked young Willie, did he want, when you get older, also cultivate the soil in East Texas, then he, probably, would say “No”, he didn't think so – he wanted to be a businessman.
But work, which he could do on the farm, was more important to the family, so William never finished elementary or high school. Like the eldest son, he had a special responsibility, and those years of work on the farm, maybe, laid the foundation for his hard work habits.
A few years later, William worked at a brokerage office in Texarkana and attended business school in the evenings.. In 1903. William made a fateful move to New York at the age of 25 years. Gunn started trading on the commodity and stock exchange. In 1908. he opened his own brokerage office “W.D.Gann and Co.”, on the corner of 18th Street and Broadway.
During World War I, William Gunn predicted 9 November 1918, resignation of the Kaiser and end of the war. W. D. Gann, which traders know today, appeared in “Roaring twenties”.
Significant Predictions and Trade Record
Using your own style of technical analysis, Gunn has earned more 50 million dollars in profit on exchanges! In today's markets, this would be about 500 million dollars! After decades of incredible success, Gunn moved to Miami, to Florida, where he continued his research until his death 14 June 1955.
Gann based his trading methods on “time”, and not on “price”, like many systems today. This allowed Gann to determine not only when the trend will change., but also the best price to enter or enter the market. Gann's methods were so accurate, that in the presence of representatives of the main financial public, he committed 286 transactions during 25 trading days, as on long, and on short positions. Of them 264 deals were profitable! In 1933. Gunn committed 479 transactions during the year. 422 were profitable, And 57 were unprofitable. The income on his capital was about 4000 %. In most cases, Gann gave accurate prices in advance., for which certain shares and goods will be sold, together with prices close to the then prevailing values, that have not been affected.
During his career, Gann repeated these incredible trading achievements over and over, giving amazing predictions for many markets for the year ahead. Gunn used the law of nature and geometric proportions, circle-based, square and triangle, which are just as effective today on stock and commodity exchanges, like 50 years ago. His methods work in any market and time period.. His methods seem to many traders a little unusual and even mystical., but they in the past century have confirmed themselves again and again.
His directions were supernatural
D. Gunn was “Wall Street Scientist”. He could predict the top of a bull market in a year. One of his startling accomplishments was his stock forecast for 1922., released in December 1921. This forecast indicated the first top of a bullish wave in April, second peak in August, and the last top and end of the bull market 8-15 October, and how strange it is, average prices of twenty industrial shares reached the highest level 14 October and decreased by 10 points thirty days from this date. Gunn predicted a large decline during November. He said in the forecast: “10-14 November panic drop”. During this period, there will be a serious decline in stocks, many will fall on 10 items or more within four days, And 14 November, the lowest average prices were reached for 1.500.000 Shares, traded on the New York Stock Exchange.
People were amazed at the results of Gann's remarkable predictions, based on pure science and mathematical calculations.
His experience is in his own words.
“Over the past ten years, I have devoted all my time and attention to speculative markets.. Like many others, I lost thousands of dollars and experienced the usual ups and downs, inherent to a beginner, who enters the market without prior knowledge of the subject. I soon began to understand, that all successful people, be it lawyers, Doctors, or scientists, spend years studying and researching their specialty or profession before, how to make money on it”.
These words of Gann will go down in history forever., since he was a great man of his time, which stimulated thinking and research. History Repeats Itself. Greed and desire for big profits don't change. They are inherent elements of human nature., and these elements affect the average person and lead him to losses in investment or speculation. This is one of the valuable lessons, which we learned from Gann. No doubt, the name V.D. Gann is truly legendary in the world of trade.
William Delbert Gunn was born 06 June 1878 years at Lufkin, Texas. His father, Samuel Houston Gann, was a teacher, traded horses and cows. He also owned a small billiard club..
His mother, Susan Rebecca Gann (in the maidenhood of Trevation), devoted all her time to the upbringing of V.D.. Ganna and his younger siblings. She taught young William to read with the Bible Books, which later greatly influenced his reflections on the nature of financial markets.
His family was poor.. Samuel, Susan and their eight children lived in a small house., and young William, to get to school, walked seven miles every day for three years. Gunn never graduated from high school.
IN 1894 year, William Gunn, Age 16 years, Left education and started looking for work. He became a peddler. (sold newspapers, Food) on the train, who traveled between Texarkana and Tyler in Texas. He also worked in a cotton warehouse.
IN 1901 year he worked in a brokerage firm in Texarkana and married his first wife Rena May Smith.
IN 1902 the first daughter Nora was born. 1902 was also the first year, when Gunn made his first cotton trades.
IN 1903 year Gunn moves to New York. He already 25 years.
IN 1905 his second daughter, Macie Burnie, is born. 12 September 1905 in the local newspaper Gunn gives his perspective on cotton price movements. IN 1906 Gunn works as a broker in Oklahoma.
IN 1907 Gunn makes big profits by predicting stock market panic and falling commodity market.
IN 1908, Age 30 years, Gunn divorces his first wife and marries 19 летней Sadie Hannify. Together with him, his two daughters move to New York. It was that year, when he researched his "Master Time Factor". He traded on two accounts.. First, open on $300, brought to him $25000 for three months. Second, started with $130, Brought $12000 almost for 30 days. Since then, Gann has a reputation as an unusually talented trader..
IN 1909 Gunn and Sadie had their first child, a girl, which was named Velma.
IN 1910 Gunn writes his first book "Profiting a Profitable Profession". He also publishes The Busy Man's News., and later his famous "Supply and Demand Letter".
At the beginning 1914 Gunn predicts world war and panic in the markets. IN 1915 son John is born.
In March 1918 Gunn successfully predicts the end of the First World War and the abdication of the Kaiser from the throne. His predictions were published by many of the leading newspapers of the time., including the "New York Times". IN 1919 he started working for himself. He publishes Supply and Demand Letter, where it includes predictions for the stock and commodity markets. IN 1923 Ганн пишет «Truth of the Stock Tape». This book has been rated by many as the best book on the market.. For the period c 60 days Gunn got more than $30000, starting with start-up capital in $1000.
IN 1927 Gunn writes the novel "Tunnel Thru the Air". Gunn wrote it as a statement of his own discoveries.. These discoveries were hidden in the interweaving of the plot of the book.. Traders have been trying to uncover the secrets of this book for many years., but little success. In Tunnel Thru the Air, Gunn predicts World War II, in particular Japan's attack on the United States.
IN 1928 Gunn successfully predicts the top of a bull market 3 September 1929 years and the subsequent greatest panic in history.
IN 1930 Gunn writes "Wall Street Stock Selector". In this book, he describes the state of the market with 1931 on 1933 of the year. IN 1931 Gunn becomes a member of the New York Rubber Exchange and the New Orleans Cotton Exchange.
IN 1932 Gunn gives his client a recommendation to buy shares, during the founding of the Great Depression.
IN 1936 Gunn writes New Stock Trend Detector and buys his own fully-metal Silver Star aircraft. He was the first in the USA, who owned the private, metal plane. After a few years, he buys several planes. Its pilot for 19 years was Elinor Smith. Gunn also buys real estate and a high-speed yacht.
IN 1937 Ганн пишет «How to Make Profits Trading in Puts and Calls». In the same year, he divorces his second wife..
IN 1940 Gunn writes "Face Facts America". In this book he explains, why Germany will lose the war and why America should not go to war. He also highlights big problems., which he sees in the "New Deal" of the American government and its consequences.
IN 1941 Gunn becomes a member of the Chicago Mercantile Exchange. He is campaigning against Roosevelt and his "New Deal". It was time, when the US government had a huge budget, and Ford stopped production due to the crisis of overproduction.
IN 1941 Ганн пишет «How to Make Profits in Commodities». By the authors of the original edition 1941 years were V.D. Gunn and his son John.
IN 1944 Gunn marries Londi for the third time, which was on 30 years younger than him. Gunn treated her, like a queen (much to the displeasure of their children). Gunn Moves To Warmer Climate Miami Florida. There he trades, is engaged in real estate investment and continues to teach its students.
IN 1948 Gunn sells his Joseph Lederer company to Sao Luis (Missouri).
IN 1949 Gunn writes "45 Years in Wall Street". Based on the merits of this book, "The International Mark Twain" makes him an honorary member of the Society.. IN 1950 Gunn writes "The Magic Word". This was his contribution to Bible literature. 23 May 1951 Years Gunn along with Ed. Lambert founds Lambert-Gann Publishing Company. This company has published all of Gann's books and courses.
Gunn revises and republishes How to Make Profits in Commodities, removes John's name and photo from the book. Updated edition 1951 of the year was a huge success. Aged 73 years Gann had free funds for $500 per day for your consulting service.
He sells "W.D. Gann Research, Inc.» C.C. Loosely in New York City. IN 1954, Age 76, Gunn buys high-speed yacht, naming it "The Coffee Bean" in honor of a successful deal on the commodity exchange. Gann's "Great Master Course" sells for $5000, and in 1954 year is the price of an average house.
Gunn suffers a heart attack, and after the examination he is diagnosed with stomach cancer.
IN 1955 Gunn returns from one of his many trips to Cuba, where he liked to buy tickets for the Cuban Lottery and play at the races. He felt sick and very weak..
Son John took him from Florida to New York, where Gann was admitted to the Methodist Church Hospital in Brooklyn.
V.D. Gunn died in 15:20 18 June 1955 year of age 77 years. Gann's children agreed to bury him with his second wife Sadie, in the Masonic section of the Greenwood Cemetery in Brooklyn, on the alley overlooking the Manhattan highway and his beloved Wall Street. (John Gunn was a pilot during World War II. He spoke very harshly about his father., especially after that, how he got married for the third time. John Gunn died in 1984 year.)
Numerology Anna
William D. Gunn used many schemes in trade: square 9, a circle 24, schedule 360, square 144, hexagonal graph, a circle 72 and many others. He also used astrological charts in his work., such as square 52. To the average person, usually, much easier to understand trading patterns, than astrological charts.
each schema is designed for a specific time period, therefore, you need to choose the correct scheme for its time period. Square 52 used for weekly charts, since in the year 52 weeks. Many ancient games, have also been associated with this number. So, in a deck of cards 52 cards, which are divided into 4 fat on 13 cards in each, since at the same time of the year 13 weeks. On the roulette wheel 36 Sectors, Deans-related astrological cycles.
The weekly chart is one of the most reliable trend indicators, he shows us the trend changes for each circuit. Always analyze time and price changes squared 52. It is not a predictive tool., since predictions are made using loops.
Use this pattern when forming all important tops and bottoms of the market.. This will give you an idea of important time frames and price levels.. When they match, we are seeing a change in trend.
"Square of nine"
In the section, titled "Time and Resistance Price Points According to Squares of Numbers" Gann wrote:
Market instruments tend to squares of different numbers, triangle points, squares of their bases and tops or to an intermediate point of different squares according to the time period.
Consequently, it is important for us to study the resistance levels according to these numbers. Squares of each number and intermediate point, between the square of one number and the next are very important. For example:
Square 2 = 4; square 3 = 9. Intermediate point between them 4 and 9 = 6,5.
Square 4 = 16; square 5 = 25. Intermediate point between 16 And 25 = 20,5.
Square 6 = 36; square 7 = 49: Intermediate point between 36 And 49 = 42,5.
Square 8 = 64: square 9 = 81. Intermediate point between 64 And 81 = 72,5.
Square 10 = 100; square 11 = 121. Intermediate point between 100 And 121 = 110,5.
Square 12 = 144; square 13 = 169. intermediate point between 144 And 169 = 132,5.
If you carefully examine the numbers from the "Square of Nine" or "even and odd graphs", then you can see, that these squares coincide in the same corner from the center. Odd squares 1,9,25,49,81 etc, go from the center down to the lower left corner. Even squares 4, 16, 36, 64, 100 etc, go from the center to the upper right corner.
Since the distance is from 16 (square of four) to 25 (square of five) equally 180 degrees around the graph, becomes clear, why Gann expected the price trend to change in 180 degrees or "at the corner 180". Likewise, he expected a change on 90 Degrees (half of one square) And 360 Degrees (two squares).
Square progression, seems, works better with three characters. If you are studying the market with a price, containing four characters, then try to reduce the number of characters, to get the number, which you can use on the graph. Similar, if you are looking into a low price market instrument, then add zero or move the decimal place, to get three essential signs.
Investigating the use of "Square. Nine "in calculating price support and resistance.
Gunn gave clear instructions on how, where to expect such support and resistance, on the "Square of Nine". Gunn repeatedly returned to the corners., because, that they describe the geometry of a square (0, 90, 180, 360 Degrees), which can then be placed in a circle. In this way, known term "Squaring the circle" becomes a reality.
By placing these angles on natural squares of the graph from the center, one step from one natural square to the next is 180 Degrees. The middle between the squares is reached by 90 degrees and full cycle or circle in 360 degrees goes two full squares from its starting point.
The first example describes the market for December wheat contracts in 2002 G.
Maximum in 319 was made in early January. In the beginning of May, the market marks a minimum at around 283 ,05.
Calculate the square root for this movement. Square root of 319 = 17.86
Square root 283.05 = 16.84
17,86 – 16,84 = 1,02, what is within ,02 full square. This is easy to see in the "Square of Nine", finding 319 just right in the corner, rising up from the center in the direction of 12:00 hours. Then 180 degrees or directly opposite below, is at least in 283.
The following example describes S&P- mini contracts for electronic trading, This is a scaled down version of the S stock index.&P.
The market showed a maximum 7 January at the mark 1178,5. Intermediate minimum, following this maximum, fixed on February 20th at 1073,75. then 19 in March, the market rallied to a double top at 1177,5. Thereafter 7 May the market made a lower swing to 1045,75.
I follow the square root formula, we get the following values:
Square root of 1178.5 = 34.33
Square root of 1073,76 = 32,77
34.33-32.77 = 1.56 or only ,06 from the movement in 1,5 squares or 270 Degrees.
Next movement back to 1177,5 will obviously also amount to 270 Degrees.
Then:
Square root of 1177.5 = 34.31
Square root of 1045.75 = 32,34
34.31-32.34 = 1.97 or only .03 from the movement in 2 full squares or 360 Degrees.
It is easy to see on "Square". Nine "location 1178 on the right side just below the corner, directed from the center towards 3:00 hours. The first minimum is obtained by moving 270 degrees counterclockwise to 1074. The second minimum is 1045 located near the highs 1177 And 1178.
Main and Order Cross
" Square. Nine "or as it is also called" Pythagorean Cube "or" Odd Squares Calculator "is considered one of the most important trading tools of Gann. Gunn used "Square. Nine "with date ring on top, he could revolve around the center. This ring made it possible to shift dates with the values of the most significant tops and bottoms..
Without a movable date ring, the Square of Nine calculator cannot be synchronized with the current market vibration.
The following is a continuous chart for December grain. According to Anna, we must string together the December grain contracts, forming one continuous grain contract, containing only the December contract. The main maximum is shown in this graph. 28 December 200g. By price 2.62 $.
Gunn has repeatedly described the Main Cross (angles in 90, 180, 270 And 360 Degrees) as the most important points of support and resistance. The second most important was the Ordinal Cross. (angles in 45, 135, 225 And 315 Degrees).
Calculating the time on the calculator for the main high on the price 262 (price changed to three digits), we have moved the prices of the Main Cross and Ordinal Cross so, to keep them in tune with the market vibration. To do this, move the central ring on the Natural Squares Calculator so, so that the line of zero degrees was on the price 262.
We have now created a new Main Cross and Ordinal Cross. Major numbers have moved from 249 to 245 ½, from 233 to 229 ½, from 218 to 215 and from 204 to 201 ½. The numbers of the Ordinal Cross have moved from 257 to 253, from 241 to 237, from 225 to 221 and from 211 к207. From now on,, any reference to the numbers of the Main and Ordinal Cross will apply, to "displaced" numbers.
From the main maximum in 262 the market made the first move down to point # 2 on 243, keeping within 2 ½ cents of support in 90 degrees of the Main Cross. Then he did another 2 attempts at the same level, finally, rose from triple bottom to high, marked # 3. The price at point # 3 is 252, which is exactly half the distance from # 1 to # 2 and also 45 Degrees of Ordinal Cross.
The next downward movement goes to point # 4 at the price, which is on 180 degrees of the Main Cross. Gunn spoke, that the strongest angle is the angle at 180 Degrees, making this place for a potential rally. The ascent to point # 5 stopped at 241 ½, which on the "unmoved" Order Cross provides resistance.
The next movement down to # 6 stopped at 220, which is one cent from 225 degrees ordinal cross, From there rally back up to # 7 to the old bottom 230, which is again 180 degrees of the Main Cross.
Move down again through the old bottom on the price 220 And 270 degrees of the Main Cross to 315 –Degree support of the Ordinal Cross at a price 206 ½ – point №8. The rally back to # 9 brings the price back to the old bottom and 225 degrees Sequence number.
The final move to the bottom at point # 10 goes up to the price 202 ½, which is within one cent of 360 degrees of the Main Cross and the next after the start at a price 262.
Of these 5 waves down were almost exactly 135 degrees on the calculator. They were from # 3 to # 4 (from 45 degrees up to 180 Degrees), from №7 to №8 (180 Degree-315 degree) and from №9 to №10 9225 Degree-360 degree)
Synchronized solar time.
Next, we will show, how to use the moving date ring on the Natural Squares Calculator, to move time this way, to be in harmony with the date of the high or low of the market.
As an example, the same chart for December grain with a maximum , Tagged 28 December 2000. On the price 262.
The Natural Squares Calculator has a separate – Rings. Which allow you to move the Main and Ordinal Cross (degree ring, which shows, where intersections are formed) separate from the date ring.
To align “Natural squares calculator”, we rotate the date ring counterclockwise so, to the red date of the bear market – 28 December (date of maximum in 262) was at the same angle from center as zero degrees. Done right, an angle of zero degrees or the right side of the Main Cross must be at the price 262 and continue on the red date – 28 December.
We have now set the Calculator in harmony on price and time with this maximum and expect, that trend and countertrend movement will fluctuate in accordance with this, if we used the correct high or low as a starting point.
From the date of 28 December, set at a maximum price of 262, we can now introduce the concept of Synchronized Solar Time (SST). In this example,, the natural Gann time divisions of the calendar year were reset from equinox and solstice time to natural divisions SST with the beginning 28 December. The table below shows the actual SST times and their corresponding price squares..
One eighth SST 10 February 252Ѕ
One Fourth SST 27 Martha 246
Three eighths SST 13 May 236
A half 29 June 230
Five eighths 14 august 221
Three-quarters 29 September 215
Seven eighths 13 november 207
Full cycle 28 December 201 1/2
In addition to natural divisions SST, every day after 28 December combined with the square of the price, which is on the same corner from the center as this date. In other words, every day from 28 December in a bear market, the date ring creates the current SST angle, matching the square of a slightly different price. For example, 20 January would be a square in the upper right corner with a price 257.
The first high of the rally, marked # 3 on the chart, reached the mark 252 . This rally is definitely half way back from the low at 243 to the maximum for 262 and up against the displaced Ordinal Cross. Besides, the top of the rally has occurred 2 Martha, which is the square of the price 249,5. The market rally is taking place 3,25 cent, then immediately reverses completely and returns below the current SST.
The market makes a minimum of # 4 at 229 on the corner 180 degrees from 262. Besides, this minimum falls on the date 30 Martha, which is within 3 days, to be on the corner 90 degrees from 28 December. This is a common case and shows, how natural SST is the best place, to watch price reversals.
The next maximum number 5 arises 16 April. This is the first time since 2 Martha, when the price was able to rise back to the current SST. Maximum - 241.5 Happens 16 April exactly at the corner of the current SST
From this high, the market accelerates the decline and can never return to the current SST again., which in itself is a strong sign of the weakness of this market. Above already explained the ongoing price vibration on the displaced Main and Order Crosses for the rest of the decline.. The final minimum in 202.5, marked # 10, occurs within one cent from the corner at 360 Degrees. Besides, minimum happened 25 June, what is within 4 days from the corner to 180 degrees from 28 December. Again we have an example of a major change in trend., arising at natural SST and the price of the Main Cross.
Combination of natural and current “Synchronized Solar Time” (SST) and displaced Major and Ordinal price divisions is extremely important for understanding market vibrations.. This December grain example proves, what, using the correct high or low in the market, we can harmonize “Natural squares calculator”, to determine vibration, which is currently being sold on the market.
The most significant predictions:
November 1928. - predicts the end of the big bull market in stocks in the annual review 3 September 1929 and huge panic, follow-up. Here's an excerpt from that prediction.: “September marks the biggest fall of the year. Undermining investor confidence, the public will try to exit the market, but it will be too late ... ‘Black Friday’ indicates a panicky drop in the stock market with very small upward corrections. Sale in “Short” will be the most profitable. You have to short the stock and build the pyramid all the way down. "
«Wall Street Stock Selector». In the spring 1930 year V.D. Gunn wrote "Wall Street Stock Selector", which was published in June 1930. This book had a chapter – “Investor’s Panic”, which describes 1931, 1932 And 1933 of the year. ... further excerpts from it from pages 203-204 ... The predictions were confirmed by the panic fall of the market from 1930 on 1932. In April 1930 DJ30IA was sold by 297 ½, he fell to 40 1/2 k 8 July 1932 of the year.
Elected a member of the New York Mercantile Exchange. In March 1931. - Elected a member of the New York Rubber Exchange, New Orleans Cotton Exchange and later becomes a member of the New York Mercantile Exchange.
Gann's working methods
Methods of work V.D. Gann can be called complex, Whole. By plucking out one of his methods and working only with him (how often is it done now, for example with Gann angles), you won't get serious results. He linked his work in financial markets with the study of global, fundamental laws of the universe, calling it all "The Law of Vibration". In his work “The W.D. Gann Technical Review» т.1, he says: "Law, which i am applying, provides information on more than just these long cycles and fluctuations, but also predicts daily or even hourly stock movements. Knowing the exact vibration of each stock separately, i can define points, on which each of them expects support or strong resistance ".
His experience is in his own words: “Over the past ten years, I have devoted all my time and attention to speculative markets.. Like many others, I lost thousands of dollars and experienced the usual ups and downs, inherent to a beginner, which enters the market without prior knowledge of the subject ".
One more thing: “Soon I began to understand, that all successful people, whether it's lawyers, doctors or scientists, spend years studying and researching their specialty or profession before, how to make money on it ".
Gann encouraged his students to study, research the market. He repeated many times, that history repeats itself, and human nature remains unchanged. Greed and desire for big profits don't change. They are inherent elements of human nature., and these elements affect the average person and lead him to losses in investment or speculation. To successfully invest in stocks or speculate in the commodity markets, you must have a well-developed plan., and also the rules, which have already shown themselves on the market 50 years and more. After learning the rules, you should exclude "guess work", "Expectations" and "fears", but follow the rules. Then you can make a profit!
Cycles
History Repeats Itself. Gann's predictions were based on the position, that history repeats itself. In his short story "Tunnel Through the Air", he says: “My calculations are based on the theory of cycles and mathematical sequences. History repeats itself. What I have always been convinced of, so it's in that, to know and predict the future of anything, You just have to look at that, what happened in the past and find the right base or starting point for calculations. My conviction in such a statement (that the future is only a rehearsal for the past) backed by the Bible:
Ecclesiastes 1:9: "What happened, then it will, and what was done, then it will be done, and there is nothing new under the sun ".
Ecclesiastes Again 3:15: "What happened, even now there is, and that will be, that already was, and God will call the past ".
This makes it clear, that everything works according to the previous cycles, and that history repeats itself in people's lives, nations and stock market. /Gann, W. D., “The Tunnel Thru The Air”, Lambert-Gann Publishing Company, Pomeroy, 1927, pages 75 and 76./
Gann emphasized the importance of the 10-year cycle, and various divisions (Harmonics) this cycle: “The 10-year cycle repeats itself over and over again, but the largest increases and decreases in prices occur at the end of 20-year and 30-year cycles, and then again at the end of 50-year and 60-year cycles, which are the strongest ". /Number 3 Master Forecasting Method, «Forecasting», November 1935, page 6, 7/
As well as: “To forecast for 1929 year, i compared 1919 – 10 years ago, 1909 – 20 years ago, 1899 – 30 years ago, And 1869 – 60 years ago, having received the Greatest Cycle ... ". /Number 3 Master Forecasting Method, «Forecasting», November 1935, page 8/
Numbers in Analysis
Gunn was a rare mathematician. He was a student of numbers, number theories and number progression. As you study his work, you begin to understand, that certain numbers dominate his trading method for various reasons: some - religious and spiritual, others - historical, and still others - psychological. Most often, he mentioned such numbers as 7, 9, 12 And 144. Number 3,5 Gunn also considered important, because. it is half of the 7, and in the Bible it appeared many times (Gunn considered her – the most important book of all time). Also squares of numbers occupied an important place in his works.: 16, 25, 36, 49, 64, 121 And 144.
Gunn Tools
Gunn counted, that there is an ideal relationship between time and price, if the price rises or falls at an angle 45 degrees to the time axis. This angle is designated "1x1" and corresponds to a unit price increment for each unit time interval.
Fan Anna (Gann Fan)
Gann Fan Lines (Gann Fan) are plotted at different angles from an important bottom or top on a price chart. Gann considered the 1x1 trend line to be the most important. The position of the price curve above this line is a sign of a bull market., and below it - bearish. Gunn believed, that the 1x1 ray is a powerful support line in an uptrend, and the breakout of this line was considered an important reversal signal. Gunn highlighted the following nine main corners, among which the angle 1x1 is the most important:
1x8 - 82,5 Degrees
1x4 - 75 Degrees
1x3 - 71,25 Degrees
1x2 - 63,75 Degrees
1x1 - 45 Degrees
2x1 - 26,25 Degrees
3x1 - 18,75 Degrees
4x1 - 15 Degrees
8x1 - 7,5 Degrees
So that the considered ratios of price and time increments have the corresponding slope angles in degrees, the X and Y axes must have the same scale. This means, that the unit spacing on the x-axis (ie. time, day, Sunday, month) must correspond to a unit spacing on the Y-axis. The simplest way to calibrate the graph is to check the angle of inclination of the 1x1 beam: it should be 45 Degrees.
Gunn noted, that each of the above rays can serve as support or resistance depending on the direction of the price trend. For example, in an uptrend, the 1x1 ray is usually the most important support line. A fall in prices below the 1x1 line indicates a trend reversal. According to Anna, further prices should go down to the next trend line (in this case it is a 2x1 ray). In other words, if one of the rays is broken, price consolidation should be expected near the next ray.
The Anna line (Gann Line)
The Anna line (Gann Line) represents a line, held at an angle in 45 Degrees. This line is also called “one-to-one” (1×1), which means one change in price per unit of time.
According to Gann's concept, a line at a forty-five degree angle represents a long-term trend line (upward or downward). While prices are above the rising line, the market is bullish. If prices hold below the falling line, the market is characterized as bearish. Crossing the Gann Line usually signals a reversal of the underlying trend.. When prices go down to this line during an uptrend, time and price are completely balanced. Further crossing of the Gann Line indicates a violation of this equilibrium and a possible change in the trend.
To draw the Gann Line, you need to define two points.
Anna's grid (Gann Grid)
Anna's grid (Gann Grid) represents trends, built at an angle in 45 Degrees (Gunn's lines). According to Gann's concept, the forty-five-degree line represents a long-term trend line (upward or downward). While prices are above the rising line, the market is bullish. If prices hold below the falling line, the market is characterized as bearish. Crossing the Gann Line usually signals a reversal of the underlying trend.. When prices go down to this line during an uptrend, time and price are completely balanced. Further crossing of the Gann Lines indicates a violation of this balance and a possible change in the trend.
To build the Gann Grid, you need to specify two points, defining cell sizes
Market vibrations
Description of vibrations, which I wrote about. D. Gunn in the first half of the 20th century and how Billy Jones defined them 20 years ago, operate on the same principle in today's markets.
This confirms that, that Gunn was right, when I wrote:
Human nature never changes. For this reason, history repeats itself, and markets operate in much the same way under certain conditions year after year and in different time cycles.
First graph, shown below, displays the wheat market in May 1998., which is the same product and in the same month, which Billy used in 1982. It starts from the high of August 29, 1997. and continues with a period of 36 trading days on October 21st, 11-December, and 4th February 1998.
In the example, which Billy used, the market was trading up at 36 cents every 36 days. This was an example of a market trading at an angle 1 X 1, moving at a rate of one cent per day. In the example below, the market is trading down at 18 cents every 36 trading days. It matches the corner 1 X 2, with the market moving downward with the degree of change 0,5 cent per day.
One interesting reason for this less steep line is, that markets move faster at higher levels, rather than at low levels. This is the same principle., as in centrifugal force. The further the object is from the center or “0”, the faster it has to move, to maintain a balanced balance.
In the used May wheat example, it trades at price levels from 3.40 $ to 4.00 $ per bushel (35,2 Liters). In the example, used by Billy Jones, she traded on 4.50 $ – 5.75 $ per bushel.
In addition to trading very close to the average price vibration 0,5 cent per day, this market gives a swing top for swing trading for one or two days after the countdown 36 trading days.
The second chart depicts the pork market in October 2001.. The minimum was noted earlier – 20 September 2001. Supplement 36 trading days gives 9 November 2000, 3-is January 2001. and 26th February 2001.
The Gann angles in this graph will be the angle 1 X 2 built up from the base. Chart scale – 10 cents per pound. Therefore the angle 1 X 2 from the base moves upward with a degree of change 5 cents per pound.
Combination angle 1 X 2 and countdown 36 trading days as indicated by the vertical dashed lines defines a significant swing base for three trading days.
The horizontal dashed lines show, what are the lows these days “Vibration” are essential, because they are not overcome by the subsequent market movement. If trader is in a long position with stop orders placed, which are taken into account as an angle, so wobble down these days, then a very significant profit can be obtained in the end.
IN. D. Gunn writes in his book “How to make a profit in the commodity markets”:
Most money is made by swing trading or long-term positions, which follows a certain trend, as long as this trend continues up or down.
These are classic examples of one technique., which allows the trader to do something, what Gann was talking about in the aforementioned dictum. He also described several trade deals in his book., when he made a huge profit, following the market up or down with the corresponding movement of stop orders.
W. D. Gunn was a curious person. He noted many parallels within various fields of natural and scientific phenomena.. For example, Gann noticed analogies between the periodic law in chemistry and the harmonic octave in music..
The keyboard in music has a fundamental octave of seven notes, and each octave repeats these seven notes in a higher or lower key or number of vibrations. The elements, when listed in the order of their atomic weights, tend to repeat fairly simple properties in every 7th element, like notes in a musical scale.
Ganna was interested, first of all, because, that these deep laws and characteristics also shared common features throughout the markets.
In the accompanying May 1981 wheat chart. Note, was celebrated on June 6th, when the minimum was fixed on this chart. See also, that trading days are marked on July 29th, 18-th September, 10-1st November and 5th January (from the minimum they would be 36th, 72-ym, 108-th and 144th days, as marked).
An angle was built under 45 degrees from the base and angle under 45 Degrees, down connecting marked days.
Pay attention to the fact, what's on the bullish side of the market, Each 36 trading days, the price rises by 36 Cents! On the Bear Side, Every 36 trading days the price is reduced by 36 Cents! The pattern doesn't end there., since it can be continued to the 180th, 216-on the mu and 252nd trading day.
It is worth noting, what, as soon as these 36 days have been finished, the price did not trade below the lows of these days, when it was on the bullish side and did not trade above the highs of these days, being on the bearish side (cm. dotted lines on the chart). The study shows, what is this phenomenon in 36 trading days, repeated on the market from time to time with minor changes.
Let's take a look at some statistics:
36 trading days x 7 = 252
225 minutes in a trading day (wheat) x 36 = 8100
8100 = 360 degrees square or 90 x 90
Looking closely at the May wheat chart, we can see a certain harmony and rhythm.
Doesn't it have the same properties, that meet in the musical octave, periodic law of chemistry or color spectrum? Gunn insisted, what “vibration” is a leading factor.
Gunn stated:
Through the law of vibration, each market instrument moves in its own distinctive sphere of activity., in terms of intensity, volume and direction; all essential qualities of his development are characterized by his own degree of vibration.
Market Instruments, like atoms, are truly centers of energies, therefore they are controlled mathematically. They create their own field of activity and power.; forces to attract and reflect, which explains, why some market instruments move the market at one time and become sluggish at another time. In this way, to speculate scientifically, it is absolutely imperative to follow natural laws.
Vibration is fundamental; nothing is exempt from this law; it is versatile, therefore applicable to every class of phenomena on earth.
That's why, I confirm, that each class of phenomena, whether in nature or on the market, must be subject to the universal laws of causation, harmony and vibration.
Shopping areas
Many Gann techniques, used by him in his trading and technical analysis, went unnoticed after his death. While studying his old diagrams and notes, some of these methods were revealed.. Not known, why didn't Gunn mention them, unless he believed, that they took a long time to test and prove their reliability. Whatever the reason, we believe, that some of these methods are interesting and useful for trading and market analysis.
One such technique – “Zonal system”. This is a fairly simple method and, undoubtedly, he deserves attention. As you can see in the graphical example below, which is taken as the graph of May wheat, The Zone System uses an angle of 45 Degrees [1 x 1], deferred upward from various earlier points of the movement in question. These zonal lines will divide ongoing traffic into three important sections or zones., That, after that, how were installed, will no longer change. Initially, other lines will also be used, but after a while, some of these lines will be discarded, and you will be able to select the main divisions, which will remain the same throughout the entire market movement. An experience, as in most cases, is developed by trial and error. As with most systems, The Zone System works best in trending markets (bullish or bearish), not in a dull sideways market during periods of consolidation. As soon as the traffic picks up speed, and the trend was established, major zonal subdivisions become final. Ideal shopping area, set in early movement, will not change as the market advances. The same happens for sales areas.. It means, that you should have bought May wheat (cm. given example) on 472 and this is, as it turned out, would be a good buy, considering the subsequent price increase. You will have similar results, if buy by 492 or on subsequent movement to the shopping area. Purchases should be made as soon as, how the market moves down to the buy zone. You have to sell, when the market moves to the selling area. If you are a short term trader, then you have to buy in the shopping area and keep, until the price reaches the sales area. During this time, you must sell and go short.. If you are a long-term trader, then you have to buy every time, when the market enters the buy area, adding to your position, until the general movement is over. Various methods can be used to enter and exit.. Supposed, what will you use the graphic
the system “One on one”. In this case, angle in 45 degrees defines zones. If a great unit of price and time is used, then a different angle may be needed, but not 45 Degrees, to set the correct zones. The Zone System can be used in conjunction with the Mechanical Gann Method and Trendline Indicator.
These methods can be used for both short-term, and for long term timescales. It must be remembered, what is this, only, another technical tool, which is designed to help you analyze the market. It should be used in conjunction with other technical analysis methods., which will allow you to trade successfully.
Market pyramid
The relationship between price and time
Analysts on Gann's methods have spent years, studying old charts and records in search of Gunn's secrets, and countless people keep saying, what new nuances of the Gunn technique were discovered, who eluded others. Maybe, someone discovered
Don Hall published a book and developed a system, called pyramidal points (Pyrapoint), That, as it seems, based on the principles of Anna. The purpose of this article is, to take one of the ideas, used in Don's work, and present it from different points of view and draw conclusions from this.
Geometric Gann angles are trend lines, drawn from clear tops or bottoms at some angles. The most important angle is 45 degrees, which means, that the slope of the line is one unit of price per unit of time. (Note: Depending on the used chart scale, the line may look like, maybe, and no, held at an angle of 45 degrees). Many Gann analysts use the phrase “square of time and price” In Don's method, it is expressed as follows:
Price = Time squared or P = t 2
This relationship between price and time can be plotted graphically., as shown in the diagram below. Time values 10, 20, And 30 marked with arrows.
For clarity, let's take the visible top or bottom, arising from the price 400. According to the theory, this essential point has a mathematical link. Start a new time curve at this time point, and this will give us the expectation of a future top or bottom, which should appear on this curve. This principle can be expressed as, “When the price meets the time, change is inevitable”. This attitude “price meets time” demonstrated in the following diagram.
With top or bottom visible at P, if the price meets the curve at the point (BUT), then she will do it on 18 Bar. Point time (BUT) is equal to the square root of the price at the point (A). Price at point (BUT) Equals 324. Square root of 324 Is 18.
If the price meets the curve at the point (B), then she will do it on 20 Bar. Time for a point (B) equals the square root of the price at the point (B). Price at point (B) = 400, therefore, time for B = 20 I'm looking for.
If the price meets the curve at point ©, then she will do it on 22 Bar. This is a very interesting concept.!
Remember, that price and time are related by the formula: P = t2 or t = kv. root (P)
Slope of the trend line
Now we will go ahead and determine the slope of the trend line using the resulting price-time ratio.. Let's take a look at the following model:
As shown in the previous paragraph, the next time the curve needs to go through t bars to reach the price P. At time t + 1, the price will meet the curve at the price P1. Now, let's find the slope of the trend line, which connects P and P1 (shown in blue).
P = t2
P1 = (t + 1)2 = t2 + 2 t + 1 = P + 2 t + 1
Tilt = (Price change) / (Time change)
Price change = P1-P = P + 2 t + 1-P = 2t + 1 = 2 t + 2-1 = 2[t+1]-1
Time change = t + 1
That's why, slope of P to P1 =(2[t+1]-1)/(t+1)=2-1/(t+1)= 2-1 / sq. root (P1)
If we reduce all prices to three-digit numbers, then they will be in the range [100…1000]. Using price boundaries in the slope formula, we can get the range of slopes as follows:
For the price P1 equal to 100, slope of the uptrend line to 100 = 2 – 1 / 10 = 1.9
For P1 equal 1000, slope of the uptrend line to 1000 = 2 – 1 / 100 = 1.99
The slope of an uptrend line in the middle of this price range is 2 – 1 / kV. root (500) = 1.96
Let's call this trend line the 45 degree line., because we calculated the slope, using one unit of price change from P to P1 with one unit of time t. For this line at 45o, the slope is basically equal to 2. I think, it explains, why gunn used 2 cents as a price grid interval on their daily charts. Such an arrangement of the scale naturally gave Hann angles of 45 degrees.. tilted 2 cent per day bar. I showed, what 2 is the slope of an uptrend line at 45o, what is derived from the ratio of price and time, given in the formula: P = t2.
One can get this result for the slope of a downtrend line from P1 to P:
Slope of P1 to P = (- 2 t – 1) / (t – 1) = (- 2 [t – 1] – 3) / (t – 1) = -2 – 3 / (t – 1) = – 2 – 3 / (kV. root (P) – 1)
For a price P equal to 100, slope of the downtrend line to 100 = -2 – 3/9 = – 2.33
For P equal 1000, slope of the downtrend line to 1000 = – 2 – 3/99 = – 2.03
Again,, the slope of the downtrend line is approaching the value – 2. Consequently, – 2 is a good approximation of a 45o slope for a downtrend line.
Applying pyramid points
Now let's take a look, how the above calculations can be applied to price charts. I used these calculations, to develop an analysis tool in ESPL, which draws horizontal lines at the calculated price levels, and nearly vertical time curves at calculated time intervals. This forms a trapezoidal grid similar to the previous illustration.. (Don Hall calls them “Squares”). Diagonal lines connect the corners of trapeziums to obtain support and resistance trend lines.
Below is the daily JNPR chart with trapezoidal grid plotting starting at the highest high. All price levels, time slots, and trend lines are plotted mathematically based on two initial values: price – 244.50 $ and date – 16.10.2000G.
There is much more to this graph., what can be explained in this article. But, we will indicate the main characteristics. Horizontal price lines are labeled on the left, which is the degree of rotation around the Square 9. This is described in the book on pyramidal points., but there is no way to explain in this article. note, what in this example, timelines are almost vertical. This is some kind of build method, described in the book, which uses vertical lines. The time curve forms the left and right sides
trapezium, and the price levels form the sides of the bottom and the top.
Time: Time is measured by the time curve, which is related to the price. Remember: When the price meets the time, change is inevitable. note, for the first time, when the line, Marked 12 at the base and 16 on the top. If the price meets the time 720 horizontal lines, that time for change would be the 12th bar from the top. If the price meets the time 540 horizontal lines, that time for change would be the 13th bar from the top. For 360 horizontally, the time change would be in the 14th bar. For 180 horizontal lines, the time change would be at the 15th bar. On 0 Line, time would be in 16 Bar. This is why the top of the timeline is labeled 16, and the base of the line is marked 12. Beginning with 16, for every 180 ° reduction, the time count is reduced by one bar, or for every 180 ° increase, time count increases by bar. note, that the market was really experiencing a change, when the price met the time curve, marked from 12 to 16!
Price in 12 – 16 timelines was used to obtain forecast values for the following timelines, which is marked 25 – 31. As price meets every time curve, new time curve calculated, based on price. Each of the time curves shows excellent correlation with market changes., when the price meets the time line.
Prices: visible maximum – 244.50 $ is the calculated basis for all horizontal price levels, which are shown. Remember: the market is looking for these price levels, and you can calculate these prices in advance. note, how the market fell to 540 horizontal lines, climbed to 180 horizontal lines, fell to 900 Level, climbed to 540 Level, fell to 1080 Level, and went up to 720 Level.
Trend lines: downtrend lines at 45o, depicted in red create a price channel, or as Don calls it – “price highway”. Rising trend lines at 45o, shown in green create “price highway”, going in the other direction. Red lines – these are the lines of resistance, above which the market should close, to change direction from bearish to bullish. Green lines – these are the support lines, below which the market should close, to change direction from bullish to bearish. We've all used uptrend lines, held below the lows in an uptrend, indicating support, and downtrend lines, held above highs in an uptrend, to specify resistance. The advantage of the given tool is that, that these diagonal trendlines are calculated in advance, and market, seems, coordinates its movement with them. Price follows up and down channels. The better you study the example, the, I think, you will like this tool more.
Intra-day charts
The pyramid point technique can also be successfully applied on intraday charts.. Price interval size, used on the daily chart, would be too large to be applied on an intraday chart. No problem. Don points out, that there are squares within squares. Everything, what needs to be done – this is to divide the price interval in half, Quarter, or eighths. The time interval is calculated from the price, and will not change.
One moment, which needs to be clarified: If the calculated time interval is 11 I'm looking for, since the price is 121, what intraday time format should be used? If using 1 minute bars, then we have curves
time through 11 minutes. If 2 minute bars are used, then the time curves would pass through 22 minutes. At 5 minute bars, time curves are drawn through 55 minutes. The time interval strongly depends on the choice of the intraday bar format, calculated for the following time curve.
To resolve this issue, i displayed a 1 minute chart and used a cyclical tool, to measure the rhythm of the cycle from bottom to bottom, top to top and bottoms to tops. When I found the width of the loop, which the, as it seems, fits, to catch multiple turning points, I figured out the number of minutes in the loop. I am using this formula to estimate the intraday time frame used.
Intraday bar time format = cycle width in minutes / kV. root (P)
Example: On the 1 minute JNPR chart, I found a loop at 65 minutes, when the price was approximately 133 $. That's why, bar time format = 65 / kV. root (133) = 5.6 minutes in one bar. In this way, 6-minute chart or, maybe, 5-the minute chart should show good results using the pyramid point tool. When examining the 5 minute chart, we do find an excellent correlation. In this example, I used smaller price intervals to divide the 180o intervals into eight parts..
Look at the chart, and you will see, how the price moves up and down trend channels. note, how trend changes occur on or near vertical time curves, and how the market looks for horizontal price levels. This is a detailed chart of price movement calculated in advance from the visible top., reached on January 12 in 9:35 morning.
Market Geometry Gann
Howard Arrington W. D. Gann has developed several unique methods for studying price charts., and the geometric angles of price and time were central to his methods.. let's consider, how the intersection of Gann primary angles can be used, to predict the time of price reversal. I dont know, did Gann himself use this technique, but it seemed interesting to me and I want to present it to you in that form, as I understand her.
In my example, I will use the daily chart “JDS Uniphase”. I don't give any investment advice, but only showing the process of my thoughts, to detect the timing of the market, using Gann angles. The basic principle of this theory: an upward Gann angle will be placed on the chart at a significant reversal low, and a descending Gann angle will be placed at a significant turning high. Initially, we will be interested in the intersections of lines 1×1 with horizontal lines, and the intersection of two lines 1×1. In the example shown, these intersections are marked with red arrows..
For clarity, in the first illustration, I showed only the intersections for lines 1×1. but, i am also considering lines 2×1 and 1×2 and their intersections, and show them in my illustrations on the JDSU daily chart. I started with a clean JDSU chart and first tried to find an appropriate price-time ratio, to use as line 1×1. For this I use the special Gann tool in the graphics program. “Ensign Windows” and set the parameters to default, to only show angles 1×1, 2×1 and 1×2. Also, i check option, to use the high or low value of the bar to place the top. Lines 1×1 shown in blue, while lines 2×1 and 1×2 depicted in red.
The first top was placed at a significant low on 10/05/1998. I adjusted the placement of line 1×1, so that it visually matches the market movement. I did my best, so that the trend develops along these lines or they provide support and resistance. The more correlation can be found, so they fit better. Since the top is placed on the chart, the program shows the relationship between price and time as a top number. I see this number and try to select the price and time value 1×1, which is the derivative of the price unit, or has some relation to the Gann number, Fibonacci number, or part of a circle. My first peak 05.10.1998. matched value 1×1 equal 21.0. It means, that line 1×1 increasing at a rate 21 cent per day. I am satisfied with the value 21, since it is like the number of the Gann sequence, and the number of the Fibonacci sequence.
To place additional Gann tops from recent significant highs and lows, i will expand the interval of bars. I will find a new value 1×1, since the volatility of JDSU in 2000. a lot more, than in 1998. I find, that slope 1×1 in 60 cents per bar is fine, and I want to use 60 as value 1×1 for all vertices in subsequent studies. The number suits me 60, because it is also a whole part of the circle in 360 Degrees, while 58, 59, 61, And 62 they are not. I added a rising top to the low of 12/15/1999. and a descending top to a high of 01/21/2000., to see, what is the intersection of price and time.
I marked the intersections, which predict the reversal time with red arrows. Vertical green lines drawn from red arrows to intersections for better clarity. note, that the decline of line 2×1 (cool red) had a useful intersection with all four lines from the Gann ascending top, held from the minimum of 12/15/1999.
Gann angles also provide support and resistance., and many of these points were marked with horizontal blue arrows. As you can see from the example, when the corner line is crossed, then the price will move and consolidate at the next line.
For this example, the JDSU daily chart was taken, but i'm sure, that similar results can be obtained as for any other market instrument, and other time format. but, you yourself should carefully study the possibility of using the proposed technique for your trading strategy. Besides, I don't count, that the proposed research is unconditional and definitive and I hope, that you, doing my own research, you can find something new and interesting.
Application in graphics programs
Technical Tool “Gann Squares” in a graphics program “Ensign Windows” is very flexible and can be used, to show trends, timing, and price levels. “Gann Squares” indicate possible times and price movements from important highs and lows. To build “Gann Squares” start and end points are required on the graph. Because “Gann Squares” indicate possible values for future bars, it is often useful to move the bars of the chart to the left, thus, so that there is a clean spot on the right side of the chart. For building “Quadratov Gann” on the chart move the cursor to the starting point on the chart. The starting point is generally an important high or low on the chart.. Then the cursor drags to the right, until the desired end point is reached. The start and end points will be the corners of the square. The end point is often on the right edge of the chart. Let's see, what does the form for setting the tool parameters look like?.
Price
“Anna Square” can draw horizontal lines at price levels, shown in the Horizontal Marked List. These price levels are similar to those, which could have been built, using Fibonacci price levels. You need to follow the trend, to change directions at price levels “Square Anna”.
Time
“Anna Square” can draw vertical lines at intervals, shown in the Vertical Marked List. These vertical lines are like those, which could have been built, using Cyclic tools. Follow the trend, to change time intervals “Square Anna”.
Tool “Anna Square” with horizontal price levels and with vertical time intervals is shown below.
In our example, parameters 1 / 8th, 1/4-th, 3/8-ouch, and Midpoint have been checked for both Horizontal Levels, and for Vertical intervals. In this way, our square is divided both horizontally and vertically into eight parts. Lines 3/8 And 5/8 shown in red.
Another variety for “Square Anna” would check the Fan Lines parameter, which is shown in the example of filling out the form for parameters. When the Fan Lines option is checked, the tool goes from drawing horizontal and vertical lines to drawing Gann fan lines from four corners, as shown below.
Fan lines are drawn from the corners to the same eighth points along the perimeter of the square., used by the horizontal and vertical lines in the previous example. The horizontal marked list will select points, used by two fan lines, whose vertex is on the left side of the square. Vertical marked list will select points, used by two fan lines, whose vertex is on the right side of the square. The usual configuration for these fan lines would be to support two corners on the left side., but eliminate two corners on the right side, without checking all parameters in the Vertical list except for the Perimeter option.
In addition to predicting the timing of reversals when crossing the primary Gann angles, which were discussed above. Gann lines also represent support and resistance., many, of which can be easily found in the given graphical example.
Gann Squares
Now let's look at the results of the following study., which i spent. I decided to place the tool “Anna Square” on a graph with a vertical midpoint
to the maximum 7 January 2000. The square has been placed with the left edge 7 January, and stretch out in this way, that the horizontal midpoint is aligned with the minimum 13 September. The base of the square was placed at the minimum 13 September. Below is the image, which i got.
Time measurement
I placed the left edge on 7 January 2000. and stretched out a square, so the horizontal midpoint is aligned with the minimum 13 September 2000. Interesting, what's the maximum 16 January 2001. coincided with a point 3/4 Square! This time is marked with a red arrow above the side of the square., indicating the highest maximum on the chart.
I also noticed, what 6 January 2000. was New Moon! BUT 13 September was a Full Moon.
Support & Resistance
The arrows on the chart indicate support or resistance, provided with fan lines, which are drawn from 4 corners of a square. From the above graph you can see, that the price movement does not happen by chance, but amenable to quite mathematically sound forecasting.
Reverse engineering
In his example, I used a graphic tool “Anna Square”, drawn from the recent minor top on the 5-minute JNPR chart. The maximum was 6 February 2001. and equaled 106.50$. let's, apply the technique, based on square root theory (see details. “Market pyramid” in no. 18), to get the predicted price:
1) Square root of 106.50$ = 10.320
2) Subtracting 1, Get 9.320
3) Square from 9.320 = 86.86$
Price 86.86 Equals 180 degrees around the Gann square of Nine of the price 106.50$. Consequently, since i have two prices, which independently give 180 Degrees, I will choose the width of the square in 180 Bars. This is the result, showing 1×1, 1×2 and 2×1 fan lines from the four corners of the Gann square.
The left corner top is at the lower trend high at 106.50$. The lower right corner is at 180 degrees on the price 86.86$ and on 180 bars to the right. note, on a few key points:
1. Red line 1×2 from the top left corner stopped the recovery in 138 bar on the price 98.875$.
2. Red line 1×2 from the bottom left corner stopped falling in 97 bar on the price 92$.
3. Two red lines 1×2, specified in the paragraphs 1) And 2) also stopped the recovery in the bar 186 at prices 96.75$.
4. The trend moves up and down on both red lines 2×1 from the corners of the right side.
The example also shows the construction of Pyramid Points., started at the same lesser top of the trend. The Pyramid Dots construction includes a series of horizontal bright blue price levels, pale red and green diagonal lines, and turquoise vertical lines. Here we can see, how two tools work together
