Legendary Trader Gann and His Commodity Trading Systems

Legendary trader W. D. Gann amassed a fortune of $50 million dollars in the first half of the last century, although he died in 1955, his commodity trading systems are still utilized today by traders all over the world. Successful commodity trading systems have the ability to take the emotion out of trading, liquidating losses quickly and spotting and holding the huge longer-term trends and that's exactly what Gann's Commodity trading systems did. Gann's commodity trading systems allowed him to make some stunning predictions and trading gains such as the prediction of improvements in business in 1921 and also the Bull Run in stocks. He made another prediction in 1928 regarding the end of the Bull Market in stocks. The predicted crash indeed happened in 1929. In 1932, Gann bought stocks in the Dow at an all tme low. Eighty three trades showed profit from among the 98 trades in cotton, grain and rubber way back 1935. Gann's profitable trades were always 90% up.

Aside from being a successful trader, Gann was a gifted writer and wrote extensively about commodity trading systems in book series and courses. Some of his ideas had been grounded in empirical studies, while others have been a lot more mystical in character. Gann believed that certain laws governed both markets and nature and thus, universal in scope. He further believed that human psychology was constant and that this manifested itself in repeatable price patterns.
"We cannot escape it (emotion) in the future it will cause an additional panic in stocks. When it comes both traders and investors will sell stocks, as usual, after it is too late or within the latter stages of a bear market" He was aware that human nature was constant and influenced the majority of traders. "Therefore, so that you can make a success, the trader should act in a way to overcome the weak points that have caused the ruin of others" For additional information on trading psychology, excellent books to read are those by Jake Bernstein, Jesse Livermore, Larry Williams, Van Tharp and Jack Shwager and you will see why human character repeats itself.

One of the most significant thoughts behind Gann's commodity trading systems was the concept of combining price and time. Gann believed that crucial price movements happened when price and time converged. These points could indicate an important trend change was imminent. Time was always prioritized over price whenever the time and price failed to converge. The ultimate indicator for Gann was time because all of nature was governed by time.

"Just remember one thing, whatever has happened in the past in the stock market and Wall Street will happen again. Advances in bull markets will come in the future, and panics will arrive in the future, just as they have in the past. This is the working out of a natural law …" and, "It is action in a single direction and reaction in the opposite direction. To be able to make profits, you must learn to follow the trend and be flexible when the trend changes," said Gann.

Commodity trading systems abound; however, Gann's system stands out due to its unique method of analysis. Day traders and long-term position traders should seriously consider this when choosing an excellent commodity trading system since said system can best help you out in becoming a more knowledgeable trader

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