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W.D. Gann Trading Methods - Genius Trader or Overrated Guru

W.D. Gann is one of the most famous traders of all time, and has a huge devoted following - however the fact is, Gann never made the huge profits many of his disciples claim.

He did not have a success rate of 90%, as is often claimed - the logic his methods are based upon are unsound, and his predictive methods don�t predict - they leave everything to subjective opinion!

Let�s examine his theories of investment in more detail and see.

Let�s look at some common myths about how great a trader Gann actually was:

Many sources quote Gann�s trading profits at $50 million dollars, however this is not true.

An interview that Alexander Elder had with his son tells the truth.

Firstly, his son confirmed that when his father died in the 1950s his estate was valued at just $100,000 - and that included his house.

Secondly, his son confirmed that Gann was unable to make enough money from trading, and therefore supplemented his income by writing and selling courses.

W.D. Gann�s Predictions

Many sources quote he had a success rate in all his trades of over 90% - again not true. We can easily deduce this from the value of his estate.

If he could make money trading and had a 90% success rate, he would have made hundreds of millions in his trading career - and he clearly did not - that�s why he had to sell books and courses.

The only evidence of a 90% success rate came from a small number of trades - and was not representative of them all.

Gann�s Methods are Predictive

Gann came to the conclusion that all natural phenomena are cyclical - including financial markets. This is true, but this is an obvious statement - we all know we�re going to die but when exactly?

A predictive theory is not a predictive theory if it can�t predict.

If Gann�s theory really is predictive, then there would be no market - as we would all know the price in advance!

Gann�s theory is subjective - and he really had no way of predicting the future with accuracy. It�s all subjective analysis and this is NOT a predictive theory.

Gann�s Logic

The basis of Gann�s theory is the principle that price and time must balance.

His methods are based on the squaring of price with time - this occurs when a unit of price equals a unit of time.

Gann for example would take a prominent high in the market, convert that dollar unit into a specified period of time and project it forward. When that time is reached, price and time are squared - and a market turn is due.

What? - How can one unit of price equal one unit of time? If you think about and answer this question for yourself, you will see how absurd the connection is.

This isn�t the only inconsistency used in his analysis - we also have the legendary Fibonacci numbers which are supposed to work with stunning accuracy - but they don�t, and neither do all sorts of astrology and geometry, that appeals to the far out investment crowd.

As we have seen, Gann was a trader who had modest success, and claimed to have discovered a predictive theory - which predicts nothing with accuracy.

Finally, we have so many subjective indicators cobbled together, that the theory can prove anything in hindsight, but if you want a tool to trade the markets look elsewhere.

For those of you still not convinced - I recently saw on the Internet, Gann�s trading methods selling for under $1,000!

Sounds like a bargain to get trades with 90% accuracy - I wonder how many serious money managers have it on their bookshelf.

Enough said.

Visit our web site now and grab your CD http://www.tradercurrencies.com

Forex Snippets

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With proper timing, foreign currency exchange trading can pay off big. The world's financial markets have a great deal of volatilty built in, due to the dynamic nature of their design. With millions of participants and trillions of dollars at stake daily, currency trading represents a fast-paced opportunity to earn very good money, provided you learn a profitable trading strategy.
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Forex TRADING: A MIND GAME
You must change your mental attitude first from a normal person to that of a speculator. Almost all traders I have met, except a few successful ones who really made millions and billions trading in the market, simply waste all their time trying to learn the easiest part in perfection, like about how to read data and charts, and trying to perfect entry and exit skills, etc. Trading is a mind game and without having a right frame of mind, it is a losing game even before it starts. Training a trader?s mind is the first step for any successful trader but almost all new traders neglect that part and that explains why more than 95% of traders are a failure in the long run.
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Another way that experienced brokers and traders in the Forex use to forecast the trends is called fundamental analysis. This method is used to forecast the future of price movements based on events that have not taken place yet. This can range from political changes, environmental factors and even natural disasters. Important factors and statistics are used to predict how it will affect supply and demand and the rates of the Forex. Most of the time, this method is not a reliable factor on its own, but is used in conjunction with technical analysis to form opinion about the changes in the Forex market.

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