William Delbert Gann (1878–1955) introduced innovative technical analysis tools, including the Gann angles. He is said to have made 50 million USD during the Great Depression. In 1933 alone, he reportedly gained 4,000% on his capital.

 

William Delbert Gann's Background

 

William Delbert Gann, often called W.D. Gann, was a pioneering trader and technical analyst who developed unique forecasting methods that remain influential in financial markets today. Born on June 6, 1878, in Lufkin, Texas, Gann became one of the most enigmatic figures in trading history, known for his mathematical and geometric approaches to market analysis.

Gann introduced several groundbreaking concepts in technical analysis, including:

• Gann Angles – A geometric tool used to predict price movements by drawing trendlines at specific angles (e.g., 1x1, 1x2, 2x1) based on time and price.

• Square of Nine – A mystical number system used to identify key support and resistance levels and potential turning points in the market.

• Time Cycles – Gann believed markets move in predictable cyclical patterns influenced by natural laws, planetary alignments, and ancient mathematics.

 

Track Record

Gann’s most legendary achievement was profiting immensely during the Great Depression, a time when most traders faced financial ruin. Some of his notable accomplishments include:

• Allegedly earning $50 million (equivalent to hundreds of millions today) through his trading strategies.

• In 1933 alone, reportedly achieving a 4,000% return on his capital—an almost unimaginable feat.

• Winning 422 of 479 trades, an 88% success rate that highlights his precision in market timing.

 

Legacy

Gann authored several books, including How to Make Profits in Commodities and The Tunnel Thru the Air, which blend trading principles with esoteric theories. Today, traders continue to study his methods, and modern software incorporates Gann indicators for market analysis. W.D. Gann passed away on June 18, 1955.

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William Delbert Gann's Trading Rules

 

1. Only trade active markets

Gann recommends trading exclusively high-volume markets where your entries are always easy and you pay a tight trading spread. An active market means a liquid market and lower transaction costs.

 

2. Avoid getting in and out of the market too often

A great number of trades means you pay too much to your broker. Avoiding frequent trading leads to the reduction of transaction costs. 

 

3. Be willing to make money from both sides of the market

Trade any kind of market bullish or bearish without getting emotionally attached to a particular bias.

 

4. Do not try to guess tops or bottoms

Tops and bottoms are the outcomes of random events. It is impossible to predict the exact levels where the market will stop and reverse.

 

5. Never buy or sell just because the price is low or high

Focusing on the real value, and not the market price. Phillip Fisher once said: "The stock market is filled with individuals who know the price of everything, but the value of nothing".

 

6. Never risk more than 10% of your trading capital in a single trade

Portfolio Diversification is a essential for long-term success. Most professional traders never allocate more than 2% of their capital in any trade.

 

7. Never let a profit run into a loss

Capitalizing profits before they become a loss. Moving your stop-loss is the perfect way to ensure a great portion of your profits.

 

8. Never average a loss

Cut your losses short and do not increase a losing bet.

 

9. Always use stop-loss orders and never cancel a stop-loss after you have placed the trade

Reduce your risk by applying a stop-loss and follow your strategy with discipline.

 

10. Do not enter a trade if you are unsure of the trend. Never buck the trend

In other words, trade only if you are able to ensure that you can understand the trend.

 

11. Distribute your risk equally among different markets

Always applying Portfolio Diversification (in terms of different assets, markets, currencies, economic zones, etc).

 

12. Never get out of the market because you have lost patience or get in because you are anxious from waiting

Balancing your trading decisions with discipline and logic by eliminating your emotions.

 

13. Never change your position without a good reason

Stay loyal to the reasons that made you open a position.

 

14. Reduce trading after the first loss; Never hedge a losing position

By hedging a losing position you enlarge the potential for a loss. A bad trade usually affects your morale and the effectiveness of your decision-making, cut it short

 

◘ William Delbert Gann Trading Rules

Giorgos Protonotarios, Financial Analyst for Forex-Investors.com (c)

 

 

BOOKS:	» William Delbert Gann on Google Books
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