An Introduction to Gann s Square of 9
Post on: 15 Июнь, 2015 No Comment
![An Introduction to Gann s Square of 9 An Introduction to Gann s Square of 9](/wp-content/uploads/2015/6/an-introduction-to-gann-s-square-of-9_1.gif)
At one point in his trading career, W.D.Gann took three year’s leave to go to the U.K to study the past history of selling prices of Wheat. During his meticulous studies, he developed some very powerful and innovative techniques, none more so than his use of the tool we call The Square of 9.
I soon began to note the periodical reoccurrence of the rise and fall of stocks and commodities. This led me to conclude that natural law was the basis of market movements. I then decided to a devote 10 years of my life to the study of natural law, as applicable to the speculative markets and to devote my best energies toward making speculation a profitable profession. W.D. Gann
The Square of 9 is so fabulous for traders to understand because it is the only tool that can generate specific dates into the future where a market may have major changes in trend or direction.
Now just that statement alone can cause some traders to scoff. How can anyone know the future trading direction or price of a market?
Gann held a trading record which has been unsurpassed by anyone since. In front of a customs inspector he turned $130 into $12,000 in less than 1 month. Again, in the presence of an independent witness, he made 286 trades, 264 winners and 22 were losses.
Gann closely guarded his secrets whilst he was alive, but almost certainly the Square of 9 calculations was pivotal in his trading methods. The Square of 9 was not created by Gann. He actually found it inscribed in a temple in India and on the walls of the Great pyramid in Egypt, but he was certainly the first trader to recognise its importance and relevance in market trading.
To give an in depth education in one article is simply not possible, it would not do this powerful tool justice, but to give one small and simple demonstration of this tool’s power we can look at the most closely watched market in world trading today, the S&P 500 in the USA.
It’s quite ironic that we choose for an example a market that didn’t exist until approximately 20 years after Gann died. but if this tool is to be of any use it must work in this market and indeed any liquid traded market.
Let’s take a very basic step by step approach to this tool, remember we are only looking at one minor aspect of this tool’s capabilities.
Many people may not realise that the Earth, in its rotation around the sun, does not proceed in a nice even circle. It rotates and wobbles on its own axis, but it also has a movement known as the Equinox.
In graphic 1 below, I would like you to imagine you are in space looking at the Earth and the Sun from a side on view. Here we see the path of the rotation as described as an oval, not a neat round circle.
In the above graphic, imagine the green line is the centre or equator of the sun. You can now see that the Earth rotates around the sun, but also moves above and below the equatorial line or plane, as much as 22 to 23 degrees higher and lower.
Let’s focus on the Winter Solstice, where the Earth is at its lowest point below the centre of the sun. This date is approx June 22 every year.
Gann, after his many years of research and study, told us to watch this date for a major change in trend or direction in the markets.
What did not escape his attention was the model he found inscribed into the walls of the Great Pyramid and the temples in India also noted this date specifically. I have simply highlighted this area of the Square of 9 below:
Now, the S&P 500… let’s see if this market reacts to this date in any way that may prove profitable to the educated trader.
Looking carefully at the S&P 500, we can see a double bottom pattern occurred early June, as marked by the green line. This price support encouraged traders to buy into the S&P and of course the market rallied. Once it passed the minor top marked on the chart this encouraged traders to add more to their positions, or for some to now start buying long, as we now have the Dow theory coming into play, which is buying in when we have a higher low (right hand side of the double bottom in June) and a higher top (formed once the market passed the Minor top).
Gann traders that have researched the Square of 9 were not fooled by this ambush. As you can see, the June equinox date is too close and represents a potential change in trend or direction.
The trade was confirmed by the Outside Reversal bar (in blue) on Monday June 21, a well known pattern for market reversals. This presents us with the elementary basics of a Gann trade: Time and Pattern. Price is also a key element, and this was also present at this juncture, so the core elements of Time, Price and Pattern gave Square of 9 traders a reasonable risk to get short in the S&P on June 22…the very same date we have just seen on the Square of 9 emblem!
In 8 trading days, the S&P dropped 10% after the Gann Square of 9 date started a market fall.
Again, on the currency chart of AUD against the USD it should be noted that this trade is presented on a market that was not even considered when Gann was alive. This chart definitely proves beyond any doubt the validity of using this tool in today’s high powered computer driven trading. In the video material we show you how easy it is to set up these levels and wait for trades. This chart is lifted straight from the instruction video.
With further research into the Square of 9 tool, we find that Gann discovered a much more accurate method of calculating Time. Our standard calendars do not take the 365.25 days per year into account so we must add on one day every 4 years to balance out the anomaly.
When we follow this remarkable work, we will see trades we cannot see using any other tool or strategy, and in many cases these dates can be forecast weeks, months and years in advance. Whilst this June date is generic to market trading, every stock or currency or market has its own specific dates or ‘vibration’ points, similar to each of us having a different birthday.
Mr Gann predicted a big decline for the month of November. He said in the 1922 forecast November 10 14 panicky break During this period stocks suffered a severe decline, many falling by 10 points or more in four days I found his 1921 forecast so remarkable that I secured a copy of his 1922 stock forecast in order to prove his claims for myself. Now, at the closing of the current year. I am more than amazed by the result of Mr. Ganns remarkable predictions based on pure science and mathematical calculations. Arthur Angy, Financial Editor, The North Side News 1922
Learning this tool has not been easy, and in my years of searching for knowledge I have found it very difficult to obtain the correct guidance to use this tool effectively. For this reason I set out to create an in-depth training program on how you can take the secrets of Gann’s Square of 9 and apply them to your own analysis.
I look forward to hearing of your great successes,