The financial market can be volatile, making it difficult for traders and investors. However, a few knowledgeable traders have discovered its complexities and can offer precise insights into future market trends.
You may have wondered about the Secret knowledge that enables them to have a significant competitive edge. Rest assured.
It’s not magic – it all boils down to understanding the Market’s Underlying Rhythm. One of the pioneers in this was WD Gann, an early 20th-century trader known for his unique market approach.
The secret sauce behind Gann’s success and distinct market approach was ‘TIME’. He strongly believed that Time plays the most important role in Market trends.
WD Gann said that Time and Price follow Predictable patterns in the Market and that Time holds more significance than Price. So, why did Gann place so much importance on Time? Let’s take a look at it in more detail.
Time is a Universal Truth
For Gann, Time was the ultimate Truth in the markets. He believed that different factors could Influence Market prices. But Time is the One constant factor that cannot be Altered.
In other words, you can’t speed up, slow down, or manipulate Time. Each Day, Week, Month, and Year follow a set structure.
There are always 24 hours a day, Seven days a week, and so on. Due to this continuity, Gann considered Time as the ultimate Truth in the Market.
History Repeats Itself
There is an old saying, “History repeats itself,” and Gann was an ardent believer in it, which he applied in his work in many ways.
He believed that the Past, Present, and Future are all interconnected and that history had a way of repeating itself, especially in Market trends. These Cyclical patterns, he suggested, were primarily defined by Time.
For Gann, Market movements were not random. They were part of larger cycles that could be predicted based on historical data. Every stock or commodity has a rhythm or heartbeat that can be detected and measured. Gann believed traders could accurately forecast future price movements by studying these rhythms over Time.
Balance of Time and Price
Gann saw the Market as a Whole in Balance, where Time and Price were the Two major factors.
Imagine a seesaw. If one side rises too high, it will come down sooner or later to balance out. Gann saw the Market in a similar way, with Time and Price being the two sides.
The Market will correct itself if a Price moves too high or too low compared to its usual value over Time. Gann believed that Time determines when these Corrections would happen.
Time Squaring: A Prime Example of the Gann Time Theory
One of the most practical applications of the WD Gann time theory is his ‘Squaring’ concept.
Gann proposed that significant market turns happen when the Price or Time ‘Square’ or Balance each other. Gann found that at these moments, the Market often changes direction. Gann’s deep respect for Time is reflected in the effectiveness of this technique.
The Interplay of Time and Price
This concept of Gann about Time requires an alteration in traditional understandings of Time.
It means we should think about Time differently. Not just to determine a swing point (high or low). But also to figure out how Time affects both Price and trend.
My findings and Gann’s charts and books demonstrate that his views on Time were far more advanced than just predicting the Date or Time. Many won’t agree with me. But that is something completely missed or misunderstood by others. However, that doesn’t change the Truth.
The WD Gann theory about Time and trading made him unique. His thoughts extended beyond monetary value. Instead, he looked at the bigger picture, trying to understand the Rhythm and flow of the markets.
Today, many years after the passing of Gann, his ideas still make traders scratch their heads.
His thoughts about how Time impacts the financial Markets have left a lasting mark on the trading world. Yet, many traders find it hard to understand and use his ideas in their own trading.
If you want to learn more about Time’s decisive role in market movements, then one method to explore is the ‘Gann Time Squaring Technique.’ A time-based method of projecting the turn in the markets.
