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Gann Square of Nine

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wayneL

wayneL

VIVA LA LIBERTAD, CARAJO!
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Freddo,

Again, thanks for those links. I can see where Gann was going with this and think I've got a loose grasp of it.

It gave very good levels on lest nights ES chart.... slightly better than the floor pivots. (thats if I put all the right numbers in, which I don't know if I have)

So the Anchor is a significant high or low and constitutes the middle of the wheel chart thingy right?
 
Bronte had this to say:

Bronte said:
Just a word of warning about "Gann Square of Nine"
There is a lot of rubbish posted about this Gann tool.
In the right hands, used correctly it works very well :)
Battman does use it when "Trading the SPI"
Click to expand...

So their support and resistance levels are based, at least in part, on this square of nine business.

Sierrachart www.sierrachart.com even has it as a standard indicator. From what I can make out it is a support/resistance setup similar in idea to floor traders pivots, and can be used to trade trend reversals.

Anyone care to add?
 
Wayne, I never did get to learn about the square of nine from Safety in the Market - even went to an extra seminar specifically as it was on the agenda, but they only did a very quick overview (felt pretty ripped off!) - so I am watching on with interest too!

Anyway, I did a google search and found this pdf which might help a little more: http://www.marketinsight.com.au/articles/article.php?name=Ganns_Square_of_Nine

Cheers
 
sails said:
Wayne, I never did get to learn about the square of nine from Safety in the Market - even went to an extra seminar specifically as it was on the agenda, but they only did a very quick overview (felt pretty ripped off!) - so I am watching on with interest too!

Anyway, I did a google search and found this pdf which might help a little more: http://www.marketinsight.com.au/articles/article.php?name=Ganns_Square_of_Nine

Cheers
Click to expand...

Margaret

Cheers :)

I'm sure there is some useable stuff from Gann once stripped of all the marketing, BS and mystique.

There does seem to be a mathematical/geometric relationship to the swing of emotions in markets. Pivots, Fib Murray Math, Gartley and other methods etc. all seek to capitalize on this.

So just really trying to cut to the chase with all this Gann stuff.

I'm sure we'll get to the bottom of it. :)

Cheers
 
Ok doky

I have my Square of 9 ready to rock and roll.

I'll have a go at working out levels for the SPI200
and maybe a shot at some time predictions as well
 
Freddo said:
Ok doky

I have my Square of 9 ready to rock and roll.

I'll have a go at working out levels for the SPI200
and maybe a shot at some time predictions as well
Click to expand...

Excellent Freddo.

Will be looking forward to those
 
With regards to Gannism;
Gannism is esoteric, not easily understood, possibly highly discretionary, and thus always viewed with suspicion.

As to the origins of the time theory element to Gannism the following caught my attention.

In 1913, a PhD was published by Bachelier in France, and demonstrated via rather complex mathematical equations that, price fluctuations grow in range and will be proportional to the square root of time

Stock prices in the United States over the last 100 years have 66% of the time fluctuated within a range of 5.9% on either side of their average.
The range in a course of a year has not been 72% or a multiple of 12 [year] rather, it has averaged around 20%

This is 3.5 times the monthly range.
The square root of 12 = 3.46

quote:
--------------------------------------------------------------------------------
But exactly just what did Mr Gann write about angles? For anyone with an original Gann course, if they will turn to the first page of the section titled The Basis of My Forecasting Method, looking at line 10 from the bottom; they will read the following quote. "There are three kinds of angles-the vertical, the horizontal, and the diagonal, which we use for measuring time and price movements." Today every usage called "Gann angles" uses "diagonal angles" only. Yet the Master says we must use all three angles-the vertical angle, the horizontal angle, the diagonal Angle. Definitely not the last and least important, the diagonal angle alone.
Click to expand...

--------------------------------------------------------------------------------

The above caught my eye from page 3
Intrestingly, this is another application of higher mathematics, referring to chaos

This is chaos in the mathematical definition, not your standard day-to-day useage.

In it's simplest form chaos can be written;
4x{1 - x}
Computing the value of *x* of that expression for some initial value of *x* then substituting this answer back into the original expression starts a feedback loop.

Repeating this simple iterative process repetitively produces surprisingly complex, unpredictable mathematical behaviour.

The mathematical behaviour expresses the same kind of disorder produced by non-linear equations

The simplest non-linear equation;
Xn+1 = KXn - KXn(1 - Xn)

This equation determines the future value of the variable x at the time step n + 1 from the past value of x at time step n

This is known as the logistic equation
All well and good, but, what the hell is this to do with the Gannies?

Logistic equations are used in Medicine to predict population expansion, via Birth rates, Death rates, due in part to availability of food, water, arable land, disease etc.

It can also be used in ecology, for populations of insects, crops, etc.
Gann was interested in commodities.
Wait, there's more.

The logistic equation is a quadratic equation with a linear first term, and, a non-linear second term

It is the non-linear, or feedback component that is important.

For a given value of K once a starting point Xo is specified, the evolution of the system is fully determined. One step, inexorably leads to the next.
The whole process can be pictured on a graph.

It forms a parabola, that opens downwards.
There is a short-cut provided via the graphical representation, that avoids endless computations.

Re-read the quote at the start of this post;

The addition of a 45 degree line up from the horizontal axis [representing the line Xn+1 = Xn]
The best course is to steer is from Xo vertically to the parabola to reach X1 then horizontally to the 45 degree line, and vertically back to the parabola.

These paths or Orbits give the first indication of which routes lead to the erratic behaviour of chaos

Whereas some orbits converge, on one particular value, others jump back and forth among a few possible values, and many roam, never settling anywhere.

When K is between 1 & 3, just about every route no matter where it starts, is eventually attracted to a specific value called a fixed point which occurs where the parabola intersects the 45 degree line at x = [k - 1]/k This corresponds to to a steady state or equilibrium

Therefore, taking the previous mathematical work performed by Bachelier, combined with a logistic equation, and you can reproduce seemingly Gann.

The question is, historically, who, and at what date, was the initial work completed in logistic equations?

How did Astrology get involved?
Mathematicians have always historically been associated with planetary movements orbits etc.

jog on
d998
 
Wow!

I can tell this is going to result in neutron collisions in my head and consequent gamma ray emmissions from my bodily orifaces.

I'm already running out of RAM. :eek:

Which text is this from Duc?

Cheers
 
enzo

The first text was Bachelier and he published a Ph.D in 1913 titled, The Theory of Speculation, the finding, is as posted.

The second is standard mathematics in medical research looking at population growth & death rates in third world countries, bacterial & viral growth/death rates in colonies etc.

Very often the calculations are extrapolated into graphs to reduce the calculations required, they as stated form a parabola.
Intrestingly, the 45 degree line is dominant, with confirmation of points taken with horizontal & vertical intersects.

These form areas of confluence, or orbits
Does this not all sound rather Gannish?

My contention is that Gann was an accomplished mathematician, who was aware of the mathematics discovered [invented] by Bachelier & Malthus who published An Essay on the Principal of Population as it affects the Future Improvement of Society + remarks somewhere between 1766 - 1834

So all the mathematics was available and readily available circa Ganns era, and all he needed to do was dress it up in some market terminology, and, hey presto, instant methodology that could be sold or used.

It is the orbit part that increases the suspicion that Gann modified the terminology to disguise the origins somewhat, substituting planetary orbits, for the strict mathematical definition.

jog on
d998
 
ducati916 said:
enzo

The first text was Bachelier and he published a Ph.D in 1913 titled, The Theory of Speculation, the finding, is as posted.

The second is standard mathematics in medical research looking at population growth & death rates in third world countries, bacterial & viral growth/death rates in colonies etc.

Very often the calculations are extrapolated into graphs to reduce the calculations required, they as stated form a parabola.
Intrestingly, the 45 degree line is dominant, with confirmation of points taken with horizontal & vertical intersects.

These form areas of confluence, or orbits
Does this not all sound rather Gannish?

My contention is that Gann was an accomplished mathematician, who was aware of the mathematics discovered [invented] by Bachelier & Malthus who published An Essay on the Principal of Population as it affects the Future Improvement of Society + remarks somewhere between 1766 - 1834

So all the mathematics was available and readily available circa Ganns era, and all he needed to do was dress it up in some market terminology, and, hey presto, instant methodology that could be sold or used.

It is the orbit part that increases the suspicion that Gann modified the terminology to disguise the origins somewhat, substituting planetary orbits, for the strict mathematical definition.

jog on
d998
Click to expand...

Interesting.

Nothing new under the sun eh?
 
:)

Hi folks,

Many theories have surfaced about Gann's work with astrology
and mathematics, but to speculate on links between Gann's
work and the likes of Bachelier is irresponsible, if there's no
proof of such links ... it only clouds the issues, unnecessarily.

It was the same with Judah Touro/Gann links ..... speculation
has it that the Touro family showed Gann how to forecast the
cotton markets, but the relationship fell apart after a dispute.

Nowhere, in Gann's own works is the Touro family mentioned
in terms of trading ANY market.

----

Gann as a mathematician ..... sure, he even tells us, that
his mathematics for the markets is based in the works of
Pythagoras ..... in particular, the Music of the Spheres.

Other simple maths Gann used can be found in books listed
in Gann's own book list, including those on numbers and
astrology, as well as music and cosmology ... like in our Bible
and Oahspe.

All of the above can be verified from within Gann's own
written works ..... so let's deal with some established facts

.....

Now, Square of Nine ..... what is generally sold as a Gann
trading tool today, is NOT complete and there is now a few
variations on Gann's original theme.

Basically, it's no secret that Gann used the natural squares
of numbers, as zones of support and resistance in his trading
and Sq of 9 is simply a primitive square root calculator.

In that context, it can be used in isolation, but Gann's work
shows us that he tried many geometric configurations,
including the square, with the cardinal and fixed crosses to
determine support and resistance levels .....

..... but it does not end there, as there's additional details
that can be added to the wheel, by way of several overlays.

While the cardinal and fixed crosses take care of the
square or 22.5, 45 and 90 degreee moves, another overlay
brings the 60 and 120 degree moves into perspective, against
a 360 degree dial.

Of course, all of the above are aspects used in planetary
movements, so we can also use other overlays, showing
planetary transits, compared to price and the astroshart
of the stock's incorporation or FTD, as well.

=====

There's several free online Sq of 9 calculators now, that may
be used to calculate (x points/step in time) and many ways
to interpret their use.

Gann experimented with zero and 1 central to the square,
as well as significant highs and lows, in the square's centre.

More later.

happy days

yogi

:)
 
Yogi

a ²+b ²=c ². In spite of its name, the Pythagorean theorem was not discovered by Pythagoras. The earliest known formulation of the theorem was written down by the Indian mathematician Baudhayana in 800BC.

Thus interestingly, Gann, may very well have chosen this example with tongue firmly in cheek, that is to say, in the same way the theorem was incorrectly attributed to Pythagoras, so Gann has incorrectly attributed his sources; viz. Bachelier & Malthus.

Now, Square of Nine ..... what is generally sold as a Gann
trading tool today, is NOT complete and there is now a few
variations on Gann's original theme.
Click to expand...

There are many interpretations, seemingly all exhibiting degrees of inconsistency;

But exactly just what did Mr Gann write about angles? For anyone with an original Gann course, if they will turn to the first page of the section titled The Basis of My Forecasting Method, looking at line 10 from the bottom; they will read the following quote. "There are three kinds of angles-the vertical, the horizontal, and the diagonal, which we use for measuring time and price movements." Today every usage called "Gann angles" uses "diagonal angles" only. Yet the Master says we must use all three angles-the vertical angle, the horizontal angle, the diagonal Angle. Definitely not the last and least important, the diagonal angle alone.
Click to expand...

It is this excerpt that dovetails so closely with the mathematical equation for chaos, as previously detailed. The resulting confluence of data points, fall within mathematical orbits, not, astrological orbits.

However, seemingly Gann had either a disdain for peanuts, or a rather dry sense of humour, and possibly substituted an astrological orbit in place of a mathematical orbit.

All of the above can be verified from within Gann's own
written works ..... so let's deal with some established facts
Click to expand...

Your statement is written with some very large assumptions;
*the above statement is not a priori
*the statement is synthetic in its structure

Therefore, prior to the assertion of factual, in any shape or form evidence must be demonstrated that can support the predicate, as by definition, a synthetic statement is one whose truth or falsehood is not determined solely by the meaning of it's terms.
Therefore, if a synthetic statement, it is by definition, a posteriori
If that is indeed the case, then the evidence of the synthetic statement will be available.

Until such evidence is shown, and confirmed, the resultant conclusions that you have drawn are logically inconsistent and are not supportable.

I suspect, herein, lies much of the frustration of non-Gann adherents, in that the structure of the methodology is, and seemingly, has always been opaque.
If the methodology was transparent, the veracity of claimed predicates could be subjected to confirmation [refutation] via testing.

jog on
d998
 
:)

Hi duc,

Facts about Gann's work are quite plainly available,
if we take the time and effort to dig for them.

For example, proof that Gann used astrology is available
on his own commodity charts, in the form of the astro
symbols and the trendlines relating to them.

His continual references to Sepharial's works also gives
us much insight into his work.

As for Pythagoras ..... the stuff Gann used has NOUGHT to
do with his theorem ..... but, a lot to do with Pythagoras'
"Music of the Spheres" = more planetary stuff.

Gann's use of 44 as the centre of his Sq of 9 calcs for beans,
as 44 was the all-time low in that market.

So, the evidence is everywhere, we just need the
perseverance to find and APPLY it.

Must go ..... running late.

happy days

yogi

:)
 
Yogi

Master Mathematical Price Time and Trend Calculator
By Daniel T. Ferrera

In 1954, at the age of nearly 76, W.D. Gann released a course based upon mathematical rules for making market predictions. In the advertisement for this method the author of the add writes: “We will not sell the course of instructions or teach the mathematical formula for market predictions just to get money, which we do not need or have to have; we will only sell the courses to people wh meet our requirements, and if we feel after a thorough investigation that a man or woman cannot make a success investing or trading we will refuse to teach them the courses”. “The Master Calculator can only be used with the Master Courses. It is not sold separate from the other courses”. The price shown for Gann’s Master Course in this ad is $5,000.00, it does not list the additional cost of the Master Mathematical Calculator. The ad describes the calculator as a plastic overlay that accurately measures Time, Price and Trend. Many Gann experts and students have tried to use these overlays, which require the chart to be hand drawn to a proper scale on graph paper that has 8 squares to one inch. This creates a lot of extra tedious work. This has caused one of Gann’s greatest discoveries to have been overlooked for many years. I know that some software programs have the ability to make these overlays on price charts but that is still not going to help most people because it turns out that there are also very precise mathematical rules regarding the horizontal axis or Time! In fact, these same mathematical rules apply to price as well but we will leave this topic for latter. The advertisement itself contains clues about the calculator, such as “W.D. Gann’s Record for 52 years”, “After fifty-two years of experience and research going back hundreds of years, I have proved to my entire satisfaction that history repeats and that when we know the past, we can determine the future of prices”. The calculator that Gann is talking about in this ad is his square of 52 overlay, which is based upon the 52 weeks in a year.
Click to expand...

Jumping over to Gann’s Angle course, on the last page, GA-32, Gann says: “Figuring $100, or par, as a basis for stock prices and changing these prices to degrees, 12 ½ = 45-degrees, 25 = 90-degrees, 37 ½= 135-degrees, 50 = 180-degrees, 62 ½ = 225-degrees, 75 = 270-degrees, 82 ½ = 315-degrees, and 100 = 360”. This tiny little paragraph is the basis of the entire Murrey Math Trading Course, which readers of Traders World should be very familiar with since, T.H. Murrey has written numerous articles for the magazine. These numbers are all natural 8th numbers off of the base of 10, 100, 1000, 10000, 100000, etc. The part that is most confusing is balancing this with the time element, but based on the information given by Gann himself it should be obvious that he has already shown us part of the relationship. For example: If shares of XYZ stock moved up 12 ½ dollars in 45 days, weeks or 45 months then the stock is on the price degree of it’s time angle, that is to say that price and time are equal or balanced. Gann’s example: “When a stock sells at 50 on the 180th day, week or month, it is on the degree of its time angle”. “On February 1, 1915, U.S. Steel made a low at $38, which is closest to a price of $37 ½, which is 3/8th of 100 and equals 135-degree angle. Steel was 14 years or 168 months old on February 25, 1915, and hit the angle of 135-degrees, which showed that the price of Steel was behind time, but was in a strong position, holding at $38 above the 135-degree angle or the price $37 ½”. Just to make sure that you understand this information, U.S. Steel would have been balanced or “on the degree of its time angle” at a price of $46 5/8th because $100/ 360-degrees = 0.27777cents per degree and 168 months multiplied by 0.27777 = $46.67 which is closest to $46 or 5/8th in price. Therefore, Steel is $8 5/8th behind time. T.H. Murrey has his time rules based off the “Harvest Moon” but I would stick to W.D. Gann’s time definitions when using this natural 8th system and his plastic overlays as his method has a clear degree relationship to both price and time and also to the fractal structure, which he described in the quote mentioned above.
Click to expand...

Moving on to the subject of time we know that Gann placed great emphasis on the cardinal points of the solar year. These are the Vernal Equinox, Summer Solstice, Autumnal Equinox and Winter Solstice or March 21st, June 21st, September 21st, and December 21st respectively. Gann always said that the year begins at March 21st (not January 1st) and that this was a very important seasonal time. Now this is where Gann’s “within the circle forms the square” quote gets real interesting! If we treat each natural year (March 21st to March 21st) as a complete circle, which it is because the earth has gone 360-degrees around the Sun, and take W.D. Gann at his word that there is a square within this orbit then we come up with some very unique geometrical information about time and squares, i.e. Gann’s plastic overlays. Lets build a hypothetical square running from Vernal Equinox to Vernal Equinox as our horizontal axis and we will use 0 to 100 as our vertical. If we draw in the two 45-degree Angles corner to corner we have a shape that looks like a box with an x in it. The two 45’s will meet at the exact center of both price and time at $50 on the Autumnal Equinox or September 21st. If we bisect this square again with a horizontal line going left to right at $50, and a vertical line going straight up from the Autumn Equinox we can create four smaller squares with half of the x already completed. If we complete these smaller boxes with the missing 45-degree line we will find that these points come out at $25 and $75 in price and also 25% and 75% in time or Sumer Solstice to Winter Solstice (June 21st to December 21st). If we take these 4 points, which are $25 on June 21st, $75 on June 21st, $25 on December 21st and $75 on Decembers 21st and make a new square, we find that our new square is exactly half the size of our former square set within the ¼ points in terms of both price and time. Our new square also maintains the exact center of our old square at $50. This new square is now an exact musical octave of the old square because it’s based upon powers of 2 or is exactly ½ our old square. This tells us that if we want to find a square that is within our old square that we will only find it between the two Solstice points in the year! If we wanted to enlarge the original square (to find an outer square) we would again follow the natural law of the musical octave, i.e. powers of 2. The first part of the problem is easy because we know that the next square is going to be twice as large as our old square. So this means that we are moving up from a one-year square to a two-year square in terms of time but this does not answer where in time this new square begins and ends. To calculate where this larger square begins and ends we have to use the rule “as above so below”. In other words, when we made the smaller square, we found that it existed within the larger square at the 25% and 75% points in time, therefore March 21st to March 21st is within the ¼ points of the larger square above it. In our one-year square, a ¼ of time is 90-degrees or 91.3125 solar days. This means that a ¼ of time in the next larger square is 180-degrees or 182.625 solar days, i.e. twice as big. If we add and subtract 180-degrees/days from our smaller square running March to March, we will find that our two-year square begins and ends at the Autumnal Equinox. The same is true for a 4-year, 8-year, 16-year square, etc. Getting back to the inner squares, a 90-degree square (1/2 of our 180-degree Summer Solstice to Winter Solstice and winter back to summer circle) would begin and end 45-degrees after the Sumer Solstice and 45-degrees before the Winter Solstice because 45 is ¼ of 180. This would be 45.65 days or ¼ of 182.625. So this means we would have another (90-degree) square running inside the (180-degree) Solstice squares beginning on August 5th and ending November 5th. Then just as we have two 180-degree Solstice squares running from Summer to Winter, then Winter back to Summer, we also have four 90-degree squares running from August 5th to November 5th, November 5th to February 5th, February 5th to May 5th and May 5th back to August 5th.
Click to expand...

“ Within the circle forms the square, there is an inner circle and an inner square, as well as an outer square and an outer circle which prove the Fourth Dimension in working ou price movements”.
Please note that the inner square is an exact musical octave of the larger outer square.
Click to expand...
 
“On February 1, 1915, U.S. Steel made a low at $38, which is closest to a price of $37 ½, which is 3/8th of 100 and equals 135-degree angle. Steel was 14 years or 168 months old on February 25, 1915, and hit the angle of 135-degrees, which showed that the price of Steel was behind time, but was in a strong position, holding at $38 above the 135-degree angle or the price $37 ½”. Just to make sure that you understand this information, U.S. Steel would have been balanced or “on the degree of its time angle” at a price of $46 5/8th because $100/ 360-degrees = 0.27777cents per degree and 168 months multiplied by 0.27777 = $46.67 which is closest to $46 or 5/8th in price. Therefore, Steel is $8 5/8th behind time.
Click to expand...

US Steel *X*

From the year's 1911 - 1920

Steel shipped.......13,866,000 tons
Gross Sales.........$840.7 million
EBIT................$159.7 million
Bond Interest.......$31.6 million
Preferred Dividends $25.2 million
Net Profit..........$102.9 million
Dividend on Common $35.6 million
Balance to Surplus..$67.3 million
Surplus.............$271.0 million

This era was particularly profitable for X, as it included the war years, and tremendous demand from home and foreign markets.

Therefore, on a Fundamental basis, operating conditions were extremely favourable on an economic basis.

jog on
d998
 
:)

Hi duc,

There's no question, that simple maths make up an
important part of Gann's trading methods ..... !~!

Aside from Ferrera, many others have studied Gann's
mathematics, in depth ..... :)

..... in fact, if you refer to "Patterns of Gann"
by Granville Cooley, you will find more than 610 pages
of mathematical calculations, relating to the many
different geometric shapes that Gann employed,
including the Sq of 9.

Whilst success in the 1911-1920 period, may have been
somewhat to the prevailing economic conditions, some
of Gann's best commodity trades were made in 1909
..... 256 out of 268 (???) correct trades, while being
monitored by an independent assessor.

(Exact figures escape me now, but it was in that order.)

So, unless we have some definite documentary proof of any
association between Gann and Bachelier, it would seem that,
to pursue that angle any further, will likely lead nowhere.

-----

Have worked and played with a number of good friends
from Whangerei, in the past ..... great people.

happy days

yogi

:)
 
Yogi

So, unless we have some definite documentary proof of any
association between Gann and Bachelier, it would seem that,
to pursue that angle any further, will likely lead nowhere.
Click to expand...

I have no documentary proof.
That was never really the point, nor the issue.

What we do have are two concepts, with the associated mathematical proofs + some 100yrs of empirical evidence to substantiate the somewhat esoteric methodology claimed, but never convincingly explained by the Gann adherents.

The two concepts are, reversions to the mean, or equilibrium, measurable in time and predictive reversion to the mean, or decay measured through price combined, they describe Gann based methodologies logically......sans the hocus-pocus that usually walks hand-in-hand.

jog on
d998
 
wayneL said:
Excellent Freddo.

Will be looking forward to those
Click to expand...

Wayne

Sorry, been busy playing with pivot points.

A whole lot easier and so far proving profitable.

Haven't forgotten the Square of 9 though!
 
wayneL said:
*BUMP*
Click to expand...
WayneL just found this after posting in the SPI forum and saw your "BUMP" .... a cursory read ... looks interesting ... can you share what the original links Freddo gave? Pity the discussion petered out. Am interested in following it up ...as soon as I get over the tech glitch which hit my system and currently slowing me down.
 

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