The Gann Studies

W.D. Gann was one of the most successful traders ever profited from stock and commodity market. He is known for his predictions regarding both financial matters and others, was a publisher of some of the most read books and was the inventor one of the most popular trading theories. In early 1920’s he opened two trading accounts, $300 and $150 accounts, and was able to make great profits; profit of $25,000 in three months from $300 account and $12,000 in one month from $150 account.

Gann in 1908 invented his so called ‘theory of market time factor’. The theory holds that the market price movements are predictable. The three basic underlying assumption of market time factor theory are:

1. There are only three market factors to consider – Price, time and range.
2. The market works in a cyclical manner.
3. The market is geometric in nature; in both design and function.

Gann studies involved three main areas as

1. Price studies – which include support and resistance levels, angles and pivot points.
2. Time studies – which involves identifying historically reoccurring days.
3. Pattern studies – which involve studying the markets using different patterns and trendlines.

Gann’s trading and market timing ideas were simple but they demand total dedication to be a master of them. Also there is hardly any follower of Gann studies who replicated the trading success that Gann got, although there are many who managed to get over-average returns. Now for most traders, Gann studies are one another method to analyze markets trends and to find support and resistance levels.

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