Most traders spend years learning how the market works. They study price movements, charts, and news. They follow others and look for tips and test systems.
But very few ever stop to study themselves and their mindset. WD Gann pointed out long ago that this is one of the major reasons traders fail.
In Truth of the Stock Tape, WD Gann wrote:
“Man, know thyself! It has been well said that the greatest study of mankind is man.”
This point is critical and carries a deep meaning.
According to WD Gann, the real challenge in trading is not just the market but the trader’s own mindset. He observed that many people enter speculation without understanding their own habits, fears, or weaknesses. As a result, they repeat the same costly mistakes.
Gann explained that every trader has specific natural characteristics. He said:
“You will find that you are either a natural born Bull or a natural born Bear.”
Some people are always hopeful. They expect prices to rise. Others are naturally cautious or fearful, always expecting a decline.
The problem is that these views are not based on actual market conditions. They come from within the trader. And unless one understands this PROBLEM, they continue to make poor decisions, and their trading becomes nothing more than a reaction to emotions that they imagine as a strategy.
Gann advised staying honest about their habits.
“You must discount your weak points in trading, and know that a lot of your judgment is not judgment at all, but the result of your natural weakness or inclination for one side or the other.”
In simple words, what often appears to be insightful analysis might be a bias of which we are unaware. Another might think they’re being bold when they’re overconfident. Without self-awareness, a trader cannot distinguish between these two states. In Gann’s view, a sound approach to trading starts with self-awareness.
Gann also pointed out that traders often let emotion take over after entering a trade. He wrote:
“You must learn to trade so that there will be no hope and no fear when you enter the market.”
That is easy to say but hard to do. Hope and fear are natural emotions, but they are dangerous in trading.
Hope causes traders to hold on to a losing trade, waiting for a rebound, while fear causes them to exit a winning trade too soon.
Gann believed the solution was not to suppress these emotions blindly but to be aware of them — to recognize when emotions are affecting decisions and act based on reason instead. That’s the heart of a mature trading mindset — not avoiding emotion but learning not to follow it blindly.
Gann further emphasized that trading decisions should always have logic behind them.
“Every act, either in opening or closing a trade, must have a sound basic cause behind it.”
This principle separates thoughtful traders from careless ones. If your trades are based on emotion, you’re not applying any precise trading method.
When actions are driven by hope or frustration, the outcome becomes a matter of chance. However, when decisions are based on solid reasoning, one can proceed with confidence, regardless of whether they win or lose.
In short, WD Gann warned that many traders take action without cause, which eventually leads to frustration and loss. A stable way of thinking about the market requires decisions built on reason.
To help with this, one must observe and work on their behaviour and mindset, not just on their trades.
Gann himself kept detailed records and studied his actions closely. He saw every loss as a lesson. He said:
“Use every mistake as a stepping stone to progress; analyze each mistake you make and the cause of every loss, in order to avoid repeating the same error in future.”
This approach— learning from experience and refining behaviour — is a key part of Gann’s overall view of trading. Unlike quick-fix strategies, it builds the foundation for long-term success.
This kind of self-review is different from analyzing charts or market trends. It means examining one’s own reactions, habits, timing, and emotional patterns.
For example, how do you feel after two losses in a row?
Do you rush to make the money back?
Do you hesitate to make the next trade out of fear?
These small patterns reveal more about how you will trade than any price chart ever could.
Gann believed that without this kind of self-study, success would be short-lived if it came at all. He knew that mindset and discipline matter more than luck. So, Gann wrote:
“The man who makes a success and keeps his money is the man who, after years of experience, has profited by his mistakes and schooled himself against his weak points.”
Gann further added:
“Mistakes are all right and hard to avoid. They are good for us… But it is wrong to make the same mistake the second time.”
That is a powerful truth. These quotes reflect a deeper set of trading principles built on personal growth, patience, and reflection.
Many traders fail not just because they lack tools but also because they never learn from their own behaviour and mindset.
In reality, they need better Self-knowledge and a better understanding of how they think, react, and make decisions under pressure.
The market often acts as a mirror. It reflects our thinking and mindset. If that thinking and mindset are unclear or emotional, the results will show it.
Gann’s message is that the first step to mastering the market is mastering yourself, not through tricks or tactics but through honest self-examination, discipline, and a willingness to learn from every action.
Before asking what the market will do next, perhaps the better question is:
Why did I make that trading decision? That is where real trading wisdom begins.
Key Takeaways
Most traders fail not only because they lack market knowledge but also because they lack an understanding of themselves.
No amount of prediction can replace the power of personal discipline in trading. Discipline and mindset matter more than guessing where the market will go next.
Emotional habits like fear and hope quietly drive poor decisions.
A strong trading mindset requires logical actions, not reactions.
The market reflects the trader’s mental (mindset) state. Fix your inner behaviour, and the outer results will improve naturally.
Frequently Asked Questions About Gann, Trading, and Mindset
Why did Gann say that mindset is more important than market knowledge?
Because even the best knowledge can fail if emotions like fear and hope take over during trading decisions.
How can I improve my trading mindset according to Gann’s advice?
By staying honest about your habits, learning from mistakes, and trading based on logic instead of emotions.
What does Gann mean by “natural born Bull or Bear”?
Gann observed that traders often have an emotional bias — either always hopeful or always fearful — which can cloud judgment.
How do emotions like hope and fear hurt trading?
Hope can cause you to hold onto losing trades too long, while fear can push you out of winning trades too soon.
Is it possible to completely eliminate emotions in trading?
No, but Gann taught us that by being aware of them and acting based on reason, not reaction, you can trade much more wisely.
