A have been convinced that GANN has usefullness in the marketplace but I have NOT one inkling to what its about. Could someone suggest three to four books I can seriously study? Thanks.
Quiet One of the best books written incorporating W.D Ganns theory is a book called Turning Point Analysis in Price and Time by Joseph Duffy. Probably one of the best books written about trading in the last 10 years. Thats why its expensive. Theres another book called Pattern Price and Time Using Gann Theory in Trading Systems by Jim Hyercyk. Not as good as Duffy but it costs half as much. Sterling
Gann Masters - Technical Analysis Course By Halliker's, Inc. Publisher of Trader's World Magazine Also expensive, but worth its price and comes with a diskette containing several Excel sheets with all Gann's formulae
I am not a Gann 'expert', but I'll toss in my two cents for what it's worth. I have never been a believer in any of Gann's methods because they are not IMO consistent or reproducible. My understanding of Gann, is that it uses angles to form the basis for support and resistance (45 degrees, 60 degrees, etc). The problem with this, is that the angle of the price patterns are not reproducible by two different traders. For example, suppose I am using Real Tick and you are using E-signal (or plotting by hand)... Depending on the spacing between the bars, and the height of the chart, you can end up with two completely different resulting angles, by looking at the same exact price action. Therefore, a fixed 45 degree angle, for example, has absolutely no meaning, since it is not reproducible by different traders using different charting methods. By zooming out on your daily chart, you can quickly turn that 45 degree angle into a much steeper angle, or you can zoom out and make a much smaller sloped angle. This being the case, I don't think that Gann angles is a valid trading theory. I hope this argument is clearly made, and I recognize that I may be totally out in left field on this one. If so, perhaps an experienced Gann user will clarify this for us. Just my two cents... -Eric
Eric - The problem with your thesis is that your assuming non-standardized chart geometry. As you observed, you can't just lay a protractor on different screens and get the same results. To uniformally apply a chart angle across different chart scalings you need to compute it from a standardized price/time grid (i.e., X units of time per Y units of price) and then draw the angle lines based on that grid (e.g., 45 degrees is 1 grid box horizontally and 1 grid box vertically). Some software does this with what's called a Gann Box to lay out the basic grid.
I'm still not sure I understand... For example, let's assume we are looking at a 15 minute chart on MSFT. What would be the appropriate 'standardized price/time grid'? I assume that the x-axis would be time, with each grid unit equaling on 15 minute bar. On the y-axis is price, with each grid unit equaling what? A nickel? A dime? Is there any 'right' answer to this using 'proper' Gann? Certainly , the angle derived will be different if we use a dime per grid unit instead of a nickel... The same question goes for changing the x-axis time increment. Suppose I want to view the Gann analysis on the 5 minute chart and not the 15 minute chart. I assume that each grid across the x-axis will now represent 5 minutes. Doesn't this now change all of the Gann support/resistance angles for the exact same price action that we just reviewed on the 15 minute chart? Wouldn't the same thing happen again if I looked at a 10-min chart? Seems like you can find ANY support or resistance level you want, simply by adjusting the timeframe of the chart, and the price range of the vertical axis. -Still Confused (sounds like I'm writing to Dear Abby )
After Schwager had interviewed the market wizards (who were all using various different methods of analysing the markets), he came to the conclusion that the specific method of analysis mattered less than the amount of time and experience the trader put into it. I.e., a method might have a less than scientific basis but if it is a method that has the trader looking at price action a great deal, the trader is bound to absorb patterns subconsciously. The method would eventually begin to 'work'. For that trader.
"A have been convinced that GANN has usefullness in the marketplace but I have NOT one inkling to what its about." I think the ambiguity of this statement says it all
As for the doubts and confirmation of Gann itself, its really a non-issue. The true fundamentals of making money is within the mind and the method is secondary. I have been trading for over 12 years, with the last 6 profitable 90% of the months. Monthly income is now over 6 figures. I don't say this too be boastful, nor do I exaggerate the statement. I say it because even at my experience level, I am STILL and WILL ALWAYS look to learn more about the market. More knowledge does not equal a better trader, but MORE KNOWLEDGE combined with a DEADLY CONSISTENT/SOUND trading mind is a powerful combination. Good luck to everyone and thanks again for the titles, I'm damn excited to read 'em!!