WD Gann

Discussions about the testing and simulation of mechanical trading systems using historical data and other methods. Trading Blox Customers should post Trading Blox specific questions in the Customer Support forum.
Post Reply
BARLI
Roundtable Knight
Roundtable Knight
Posts: 650
Joined: Sat Jan 17, 2004 6:01 pm
Location: USA

WD Gann

Post by BARLI » Mon Oct 02, 2006 9:13 am

[MODERATOR'S NOTE: This was split from another topic in order to keep that topic on point. The original statement from nussgipfel which prompted the diversion was:

After having spent years studying the works of W.D. Gann and trying to find ways to pick tops or bottoms I finally realized that many of the things I thought were so important were not nearly as crucial than I thought in order to be successful in this profession.

which prompted this reply by BARLI:]

Nussgipfel, did you master the square of nine eventually and did it really call the bottoms and tops?

Nussgipfel
Roundtable Knight
Roundtable Knight
Posts: 115
Joined: Sun Nov 20, 2005 12:02 pm
Location: Westport

Post by Nussgipfel » Mon Oct 02, 2006 3:59 pm

Barli,

Many of the tools by W.D. Gann are amazing, fascinating and CAN be at times really very accurate indeed. I especially thought the Square of Nine, Square of the High, Low and Range in addition to his interpretations of the cycles of time are sometimes just plain simply astonishing.

I am attempting to use this aquired knowledge in combination with systematic trading now. One of many difficulties with the work of W.D. Gann though always was that you could never really backtest it and keeping up with charts was very time consuming. In addition I started looking for THAT secret, that ONE THING or combination of THINGS that would enable you to predict (as he did) the future.

I still believe many of his teachings are very valuable but it is all these other things that I have most recently learned especially in TB and by reading Van Tharp's book that finally let me to the conclusion that even if you KNEW the tops of bottoms you still might not succeed in this business for so many other reasons.

I believe the study of the Square of Nine is really worth your time though and I do not regret the time I invested in this.

BARLI
Roundtable Knight
Roundtable Knight
Posts: 650
Joined: Sat Jan 17, 2004 6:01 pm
Location: USA

Post by BARLI » Mon Oct 02, 2006 4:16 pm

what should I use as a starting date when working with Square of Nine?

Nussgipfel
Roundtable Knight
Roundtable Knight
Posts: 115
Joined: Sun Nov 20, 2005 12:02 pm
Location: Westport

Post by Nussgipfel » Mon Oct 02, 2006 4:40 pm

I am using an important high or low within any current calender year e.g. align 0 to the low of 7/17/06 and look for division of time on the outside of the square for time cycles then align 0 to the price of the low on that day (1219 in the S & P 500) and check for price resistance going up and down in the inner side of the S of 9. So in time you could get 10/16/06 for a potential high while in price 1363 looks interesting as it is squaring out price and time.

BARLI
Roundtable Knight
Roundtable Knight
Posts: 650
Joined: Sat Jan 17, 2004 6:01 pm
Location: USA

Post by BARLI » Mon Oct 02, 2006 5:15 pm

0 is either 360 degrees or 0 degrees right?

Lets take December Corn 2006, 7/12/2006 was an important top, how you'd be calculating the bottom both time and price?

Nussgipfel
Roundtable Knight
Roundtable Knight
Posts: 115
Joined: Sun Nov 20, 2005 12:02 pm
Location: Westport

Post by Nussgipfel » Mon Oct 02, 2006 5:57 pm

That is correct 0 and 360 is the same. You have to put everything into perspective of 360 degrees or it's division e.g. 90, 180, 270, 360 or 45, 135, 225, 315 or 30, 60, 120. Then there is 36, 72 and 144 degrees. Also look for yearly cylces e.g. 1 year from hi or low and 45 days from low and 90 days from low to expire a 1 year cycle from an important turning point.

JonS
Full Member
Full Member
Posts: 11
Joined: Mon Jul 07, 2003 1:05 am

Post by JonS » Wed Oct 04, 2006 1:57 am

I am not going to do this topic nowhere near justice by my these very quick remarks, but a problem with Gann can be that while the theory is fascinating, it is that way in hindsight, and knowng which of very many many potential future time and price points or relationships will be significant is the problem. Hence comments like 'paralysis by analysis' and 'even a broken clock is right twice per day' come to mind. I think it may be very subjective looking forward.

I would like to see a demonstration of where a Gann trader states their entry and exit price levels for the next day in advance over a period of time and then we could evaluate their actual long-term performance. What I am driving at here is that it may be easier to talk about Gann theories than it is to actually make reliable predictions, but perhaps I am being unfair.

BARLI
Roundtable Knight
Roundtable Knight
Posts: 650
Joined: Sat Jan 17, 2004 6:01 pm
Location: USA

Post by BARLI » Wed Oct 04, 2006 3:16 am

JonS, you're not being unfair, you put it right: sounds great on theory with combining time and price but not everyone can implement these techniques on practice. Some people diss Gann badly, others take him seriously, I was doing abit of a research on Square of Nince and some other of his works and found that some of the stuff he used lots of good traders use today, so there's something there in his theories and trading practices, at the same time the one shouldn't be 100% devoted to one technique... From Gann's Commodities Course (original one written in 1920's) I found some flaws: he said that trading Eggs(back then Eggs were being traded as futures contract) was different from trading Corn(or some other market), from what I understood his method shouldn't be different for different commodities since it's supposed to call tops and bottoms. No one know how well he did personally in his account, some folks claim that he had a yacht and went back and forth from Cuba to NYC back its just what people say, the fact is that Jesse Livermore had a bigger yacht than JP Moran had is the fact ( so of course I'd rather trust Livermore than Gann ), thus trading profitably can be done without having a technique to call bottoms and tops, I think it's finding your own style and your own edge you know works for you

Nussgipfel
Roundtable Knight
Roundtable Knight
Posts: 115
Joined: Sun Nov 20, 2005 12:02 pm
Location: Westport

Post by Nussgipfel » Wed Oct 04, 2006 6:50 am

After having dedicated years to the study of Gann's work and have seen it work AND fail many times I simply came to the conclusion that it is very difficult (at least for me) to make it work as he sole input.

One of the best out there in this field is Bill McLaren who will be the first one to admit that the you first have to understand the nature of trends and the basics before you apply Gann's work. Another problem I encountered was the internal struggle the "feeling so bad about myself" when a projection did not work out and a cycle just was not working. In the meantime I believe John Henry has been very successful in COMBINING trend following methods and Gann's work and others do also well using his work.

I do not regret the time and money I spent on Gann's work and I have seen it work too many times for that but I will be the first one to admit that his work all by itself in isolation was not for me hence my quote below. The way I am using it now is to put me on alert when a critical point might be approching in the market or a stock but use a mechanical system to get me in or out and define the risk.

Nussgipfel
Roundtable Knight
Roundtable Knight
Posts: 115
Joined: Sun Nov 20, 2005 12:02 pm
Location: Westport

Post by Nussgipfel » Mon Aug 20, 2007 6:47 am

Interesting that the market topped again on or about 7/16 in the S & P 500! Check back to 1982 how many times the S & P 500 changed direction within days of the this date! Yes I know it is by no means statistically significant at all. Next time cycle to watch would be at around 9/5 (lower high?) and 10/17 (Low?) Realize that has little to do with what this site is all about but thought I point it out anyway as it is one of the reasons I am still fascinated by W.D's work despite all the controversy about his approach and methods.

BARLI
Roundtable Knight
Roundtable Knight
Posts: 650
Joined: Sat Jan 17, 2004 6:01 pm
Location: USA

Post by BARLI » Mon Aug 20, 2007 1:40 pm

I am biased such cycles exhist...thanks for sharing your dates observations with us :D

Post Reply