An Introduction To Gann - Square of 9

An Introduction to Ganns Square of 9
At one point in his trading career, W.D.Gann took three years 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 tools power
we can look at the most closely watched market in world trading today, the S&P 500 in
the USA.
Its quite ironic that we choose for an example a market that didnt 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.
Lets take a very basic step by step approach to this tool, remember we are only looking
at one minor aspect of this tools capabilities.
Many people may not realize 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.
Lets 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 lets 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 22the 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 todays 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

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An Introduction to Ganns Square of 9

The Square of 9 is so fabulous for traders to understand because it is

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