The Importance for Market Traders in Understanding that History Repeats

Reprinted from the Ticker and Investment Digest in December 1909

"Mr. Gann was born in Lufkin, Texas, and is thirty-one years of age. He is a gifted mathematician, has an extraordinary memory for figures and is an expert tape reader. Take away his science and he would beat the market on his intuitive tape reading alone.



…..Some time ago the attention of this magazine was attracted by certain long pull stock market predictions which were being made by William D. Gann. In a large number of cases Mr Gann gave us in advance the exact points at which certain stocks and commodities would sell, together with prices close to the then prevailing figures which would not be touched.



…..It appears to be a fact that Mr Gann has developed an entirely new idea as to the principles governing stock market movements. He bases his operations upon certain natural laws which though existing since the world began have only in recent years been subjected to the will of man and added to the list of so-called modern discoveries. We have asked Mr Gann to outline his work and have secured some remarkable evidence as to the results obtained. We submit this in full recognition of the fact that in Wall Street a man with a new idea, an idea which violates the traditions and encourages a scientific view of the proposition is not usually welcomed by the majority, for the reason that he stimulates thought and research.

These activities said majority abhors."



So what was Gann's new idea in 1909? The thing that I was to find original in Gann's work was the fact that he always said history repeats. If this were not the case we could not make a forecast. If everything that was happening around us was new it may lead to a more exciting life, but it would be far less profitable. I believe Gann's greatest discovery was that history repeats. I mean literally.



Gann believed that the best way to forecast the performance of a market was to look at what it had done previously. Let’s face it, that's how we judge people. We look at what they have done previously. It's called form. After all, the market is made up of people. Take the people out of the market and you have nothing left. People tend to do what they have done previously. Gann believed when a market was in motion it was most likely to repeat exactly what it had done on previous occasions. On a technical basis, to establish what a market has done in a previous cycle we take the bottom from the top or the lowest selling price from the highest selling price, and that gives us a range. Gann called these ranges "swings". If he is responsible for anything he is responsible for coining the phrase "swing trading" and establishing a trading method based on swing charts. This is where Gann stood out. In his books, starting with The Truth of the Stock Tape published in 1923, he elaborated on this method. Therefore, one of the fundamental things you will come to understand in the Safety in the Market training, is a form of swing trading.