W. D. Gann
Financial Prophet in the Early Twenties
To most of the technical analysts and
financial traders, the name, William Delbert
Gann, is well-known. Gann was one of the greatest
traders in the early twenty centuries, who has
extremely arcane trading analysis techniques and
methods that based on ancient mathematics and
geometry. Yet, as it was never
unveiled explicitly, the theory of Gann is
admired by most, but grasped by few.
To understand Gann's theories, it is essential
to know his life and living.
W. D. Gann was born in an Irish family in
Lufkin, Texas in the United States on 6 June
1878. His parents are devoted Christians with a
strong Methodist background. W. D. Gann was
himself a devoted Christian. He claimed that his
market cycle theories were discovered from the
The home country of Gann was a cotton land,
the influence to the childhood of the great
trader was understandable. With Gann was 24 in
1902, he made his first trade in cotton futures
contract and enjoyed the profit from trading. The
53 years of trading hereafter, it was said that
he had gained US$50 million from the market. The
wealth of that scale compared with the purchasing
power at his time was, in deed, very
In 1906, Gann moved to Ohakama with ambition
to start up his career as broker and trader. His
life and trading are with up and down. His advice
after decades of trading were that if an investor
enters the investment market without a grasp of
knowledge, his chance to failure would be 90%.
The reasons behind their failures are human
emotions: hope, greed and fear are the enemies of
Knowledge is the way to win in the market.
Starting from his early age, Gann had already
realized that the natural law is the underlying
driving force that moves the market. He claimed
that he had spent 10 years in studying the
relationship between natural law and the market.
During these 10 years, he had traveled to
England, Egypt and India for knowledge. When he
was in England, he spent days and nights in the
British Museum to study the financial markets for
over a hundred years. One of
his important techniques, the Gann Cardinal
Square, was said to be inspired from the
structure of Egyptian and Indian temples.
After the long journey for knowledge, he
concluded his findings that the financial markets
are driven by the "Law of Vibration".
The law once grasped, one can tell the future
market time and price with high accuracy. Gann
also claimed that the "Rate of
Vibration" of individual stocks and futures
contracts determine the up and down of their
Unfortunately, the details of his theory are
often kept in veil. Late comers are very
difficult to grasp the essence of his techniques.
In 1908, Gann moved to New York at the age of
30, where he started his brokerage and research
business and serious tested his theories and
trading techniques. In the same year, he
developed his major technique "Master Time
Factor" with success that made him famous on
the Wall Street.
In October 1909, he was interviewed by Richard
D. Wyckoff of the Ticker and Investment Digest, a
then popular financial magazine in early
twenties. The interview extended for an usual
period of one month in order for the reporter to
monitor his trading activities.
To the surprise of the reporter, Gann stroked
a return of 1000% on his trading capital. He had
made a total of 286 trades in 25 market days, 264
times won and 22 times lost. The profit rate was
up to 92.3%. During that month, the average
interval between trades was only 20 minutes. On
one trading day, he made totally 16 trades, 8 out
of them are the reversal points of the intra-day
According to Gann's friend William Gilley,
"One of the most astonishing calculations
made by Mr. Gann was during last summer 
when he predicted that September Wheat would sell
at $1.20. This meant that it must touch that
figure before the end of the month of September.
At twelve o'clock, Chicago time, on September
30th (the last day) the option was selling below
$1.08, and it looked as though his prediction
would not be fulfilled. Mr. Gann said, 'If it
does not touch $1.20 by the close of the market
it will prove that there is something wrong with
my whole method of calculation. I do not care
what the price is now, it must go there.' It is
common history that September Wheat surprised the
whole country by selling at $1.20 and no higher
in the very last hour of trading, closing at that
At the peak of his career, Gann founded two
market research companies, W. D. Gann Scientific
Service, Inc. and W. D. Gann Research Inc., and
employed 35 people to produce technical charts
and conduct market research. He published
investment newsletters and made annual stock and
commodity forecasts that attracted much attention
from the investment community. Gann also hosted
several investment and trading seminars. Gann
tried to make his teaching secret and confined to
few people, every student is not allowed to give
the materials out to others. The fees for these
seminars were US$2500 and sometimes US$5000,
which enormous at his time. It may be equivalent
to US$25,000 to US$50,000 nowadays!
According to his followers, the accuracy of W.
D. Gann's prediction was up to 85%. Gann claimed that his
every forecast was solely based on mathematical
principles. With sufficient information, he could
forecast the forthcoming events with his cycle
theory based on ancient mathematics and geometry.
In his mind, the nature of things had not
changed, all of the events were based on
What are the mathematical principles?
W. D. Gann said that the 360 degrees of a
circle and the numbers from 1 to 9 were the
origin of mathematics. In a circle, there may
place a square and a triangle. Outside the
circle, we may also construct a square and a
triangle. These constructions are in fact the
dimensions of the market.
Strange enough? In fact, W. D. Gann believed
that the market reversal points (tops and
bottoms) were related by the mathematical
principles. There are no single market top or
bottom cannot be explained by angles and support
/ resistance levels. In other words, if he was
given the time and prices of the historical tops
and bottoms of any market, he could utilize the
mathematical and geometrical principles to
predict futures market turning points.
His Market Predictions
Interesting enough, W. D. Gann lived in the
early Twenty Centuries while the economic life of
the world was in total chaos. Gann experienced
the first World War, the historic stock market
crash in 1929, the great depression in the
Thirties and the out-break of the World War II.
In these years of frustration, conducting
investment business was risky, not to mention
Since the Twenties, W. D. Gann began to
publish annual market forecast reports. These
reports provided market forecasts for the whole
year to come. It was nothing new by
providing these types of service. The new things
were that W. D. Gann actually depicted the market
movement of the whole year by providing detailed
time and prices of the market reversal points! Although, he predictions might not be
totally correct, his approach turned a new leaf
in market forecasting.
Surprisingly, he accurately predicted the
stock market crash of the century in 1929 to the
date. In his annual forecast published on
November 3, 1928, he explicitly predicted that
September of 1929 would be the dangerous month.
Stock prices would slump on "Black
Friday". In fact, the Dow Jones Industrial
Average toped out on September 3, 1929 at 386.10.
Two months later, the Dow fell to below 200! The
bear market brought to the western world the
great depression and the Dow eventually bottomed
out at only 40.56 in July 1932.
In Gann’s late years, he was deeply involved in financial astrology. It was said that he lost most of his fortune because of such practice and he did not leave much of his wealth to his children. W. D. Gann passed away at 77 on June 14, 1955.
W. D. Gann's Writings
W. D. Gann had numerous writings including:
"W. D. Gann Stock Market
"W. D. Gann Commodity Market
"The Truth of the Stock Tape"
"Wall Street Stock Selector"
"Stock Trend Detector"
"45 Years in Wall Street"
"How to Make Profits Trading in
"How to Make Profits Trading in Puts and
"Tunnel Thru' the Air"
"The Magic Words"
Most of his writings are related to investment
and trading. "Tunnel Thru' the Air" is
however a love story. Gann claimed that the first
time you read, it would be a book of love story.
The second time you read, it would be a book of
parables. The third time you read, it would be a
book of market truths!
The "Magic Words" is a book of
(Copyright Reserved 1999)