In 1924, Gann’s first book, “Truth of the Stock Tape,” was published. He began publishing a daily market newsletter called the “Supply and Demand Letter.” The newsletter covered both stocks and commodities and provided traders with his annual market forecasts. In 1919, at the age of 41, Gann quit his job with a stock brokerage and set out on his own. He then set out for New York City in 1903. For a short period of time he worked for a brokerage in Texas while attending business school at night. Back then, it was not uncommon for the oldest boy to quit school at a relatively young age and stay at home to help out on the farm. He was the oldest of many children on the farm, and did not even finish grade school. His rise to trading fame is a remarkable story. Gann was born on a farm near Lufkin, Texas, in 1878. He wrote several books on stock and commodity trading and developed the well known “Gann angles” and “Gann Fans.” Using the same formula, angles can also be 1X8, 1X4, 4X1 and 8X1.William Delbert (W.D.) Gann is regarded as one of the pioneers of technical analysis and market behavior. Finally, the 2X1 moves two units of price with one unit of time. The 1X1 is moving one unit of price with one unit of time. The 1X2 means the angle is moving one unit of price for every two units of time. The primary Gann angles are the 1X2, the 1X1 and the 2X1. The more angles clustering in a zone, the more important the support or resistance. If you have a long-term chart, you will sometimes see many angles clustering at or near the same price. The same can be said for up trending angles crossing a 50% level. This combination will then set up a key resistance point. For example, often a down trending Gann angle will cross a 50% retracement level. This rule states that when the market breaks one angle, it will move toward the next one.Īnother way to determine the support and resistance is to combine angles and horizontal lines. This is known as the “rule of all angles”. Traders should also note how the market rotates from angle to angle.
![w d gann balance w d gann balance](http://www.gannplan.com/images/GannPlan.jpg)
Because the analyst knows where the angle is on the chart, he or she can determine whether to buy on support or sell at the resistance. Uptrending angles provide the support and down trending angles provide the resistance. This technique frames the market, allowing the analyst to read the movement of the market inside this framework. Once the analyst determines the period he or she is going to trade (monthly, weekly, daily) and properly scales the chart, the trader simply draws the three main Gann angles: the 1X2, 1X1 and 2X1 from main tops and bottoms.
![w d gann balance w d gann balance](https://images-na.ssl-images-amazon.com/images/I/61AkAnSFlDL.jpg)
Using a Gann angle to forecast support and resistance is probably the most popular way they are used. The three premises Gann based his theory on were: i) price, time and range are the only factors, ii) cyclical markets, and iii) geometric market design.Īll markets and time frames although this study can excel in determining if a visually flat market is starting to develop a trend. However, because the construction of a Gann fan relies heavily on subjective choices made by individual traders, the chart may be limited in its usefulness and accuracy. Gann’s ideal angle was a 45-degree angle based on his ideal balance of time and price. Gann, who was also known for his accurate financial predictions, called the Gann studies, in the early 1900s.