Dynamic Gann Methodology
Much of our plan incorporates the findings and techniques of one William Delbert (W. D) Gann who was born on a farm some seven miles outside of Lufkin, Texas, on June 6, 1878. His life is a story of hard work & vision in itself. In 1920 W. D. Gann “discovered”the Harmonic Mathematical Rhythm of all markets after talking with a Russian, P. D. Ouspensky who came to New York (1919-1921) to speak about the Harmonic Balance of everything in the Universe (set inside the Cube.) From this W. D. Gann “discovered” the pure mathematical rhythm of all markets. This discovery is the basis of what is known as Gann’s six clues. It is this mathematical rhythm of the market that has become a cornerstone of the KnovaWave method.
In 1924 W.D.’s first book, Truth of the Stock Tape, was published. A pioneering work on chart reading, it is still regarded by some as the best book ever written on the subject. His market forecasts during the twenties were reportedly 85 percent accurate. In his forecast for 1929, he predicted the market would hit new highs until early April, then experience a sharp break, then resume with new highs until September 3. Then it would top and afterward would come the biggest market crash in its history. We all know what happened. W. D. Gann prospered during the Depression, which he predicted would end in 1932.
William Delbert Gann is an affirmation of the American Dream, he started with nothing. W. D. Gann rose early, worked late, and approached his business with great energy, a testament that hard work pays. Virtually all his education was self-administered. This teacher, writer, and prescient forecaster had a third-grade formal education. But he never stopped reading.
Unconventional thinking may have its merits, W.D. was intellectually curious to an extraordinary degree. He was unafraid of unorthodox ideas, whether in finance or in other areas of life. He wasn’t always right--none of us are--but he dared to pursue a better idea. We find in W.D. Gann someone to admire and have as a mentor, an extraordinary man who never stopped studying the market, even after his forecasts happened and he achieved international acclaim. Although he believed in cycles, he also knew that markets are always changing and that decisions must be made based on today’s conditions, not yesterday’s.
KnovaWave and W.D. Gann
Taking the spirit of W.D. Gann’s beliefs and methodology we at KnovaWave continually evolve our Dynamic Gann techniques with other components of our system. After all to be profitable we must be working with today’s conditions. We continue to be led down a long and winding road in adding to our technical understanding of his theories. W.D. might have rested on his laurels. But he kept studying and seeking greater understanding. If he couldn’t afford to stop, can any trader afford to do so?
There is no doubt that in studying Gann we are exposed to a tremendous amount of esoteric information. This is the greatest barrier to understanding and accepting Gann’s Theory as the esoteric side of the Gann material can be confusing and is often passed over or misunderstood. To make use of any of the higher principles one needs to understand such principles and ground them in our world.
Traders are always bleating about trends, seasonals, swings and pullbacks. On most of their computer screens can be found indicators such as Stochastics, RSI, and moving averages to name a few. Given the nature of most traders and their lack of desire to leave their comfort zone, it is easy to lose site of the connection between our plane, the trader’s plane and Gann’s plane, the esoteric plane. To most these two planes are totally unrelated, but to truly grasp Gann you must understand and believe they are totally integrated.
We utilise the concepts of "true time" espoused by W.D. Gann, the cycles when applied to simple everyday indicators become much clearer.
Dynamic Gann time & price benefits to our trading plan;
- Generic to all markets and time frames.
- Relates to actual market functions.
- Dependant on human behavior.
- Similar to other natural occurrences.
- Geometrically sound and quantifiable.
- Does not bias the data.
- Has predictive value.
- Uses objective manual or automated applications.
- Contains a symmetry and inter-connectivity to all parts.
We utilize cycles in our methodology, specifically the work W.D. Gann did on them. Cycles are Natures way of doing business. Indeed Gann ties cycles way back to the Bible and outlines the planetary impact on time and cycles. Simply everything in our universe vibrates, as a result our senses and sensitive electronics pick up these oscillations. This spirit energy combines with other cycles to form all that we know. Therefore everything is the same but of different scale or octaves. Do you get the gist; we see the fractals in the markets, in human behavior as shown in price patterns. Within cycles there exists deviation to cause change. If not, there would be no growth or evolution and devolution.
Let us just understand one point here, Market cycles found on charts are first sensed or felt, then identified and quantified. A big problem is that they do not repeat every time to the nth decimal point, nor do they turn on a dime. A day is a day but how many are exactly 24 hours long sunrise to sunrise? Night does not turn into day in a second nor does spring immediately become summer on June 21st.
The markets are constantly changing but with dynamic consistency. Each market attracting different groups of people must be treated as such. Theories to the contrary are just man-made conveniences and counter-productive and why it is important to avoid the over manipulation of data. You see, cycles are basically waves, with tops and bottoms. Each pattern of bottom to bottom defines one phase of the cycle.
- Markets movements are always coming and going.
- The same data has two different views.
- Charts are 2-dimensional and Markets are 3-dimensional.
- People become 1-dimensional overlooking the obvious.
That is why we benefit from cycle and time and price analysis in the KnovaWave Gann system and why we strive to understand the esoteric components of W.D. Gann’s work to grasp them.