His own son, John Gann was a stockbroker in New York, had no use whatsoever for his father's methods, and told anyone who asked that his father was a swindler and a fraud who made his money by charging thousands of dollars for trading seminars, and that rather than hundreds of millions his family was left with a modest inheritance. Gann followers counter by talking of W.D. Gann's choleric personality, womanising and a family feud (wow, I sure hope a Gann follower never tries to defend my memory some day!), they say Gann's family would tell malicious lies about him and try to discredit his techniques, since he was obviously such a horrid man. At any rate Gann's family never made it into any rich lists if they did receive a huge fortune and all of his trading material sat around collecting dust for a very long time, Gann's family were glad to get rid of it when someone came along and asked to take it.

Alexander Elder, in his book Trading for a Living, has this to say about Gann:

"Various opportunists sell "Gann courses" and "Gann Software." They claim that Gann was one of the best traders who ever lived, that he left a $50 million estate, and so on. I interviewed W.D. Gann's son, an analyst for a Boston bank. He told me that his famous father could not support his family by trading but earned his living by writing and selling instructional courses. When W.D. Gann died in the 1950s, his estate, including his house, was valued at slightly over $100,000. The "legend" of W.D. Gann, the giant of trading, is perpetuated by those who sell courses and other paraphernalia to gullible customers."

(Ok, some books say John was a New York broker, Elder says he was an analyst in a Boston bank. Maybe he was both, at different times, don't ask me!)

At heart, Gann's advanced methods are essentially numerology. Numbers drawn around a "magic square" and various geometrical lines drawn on charts called "Gann Fans" which are drawn at numerologically important angles, cycles, "Gann numbers", astrology, biblical predictions and even the Great Pyramid of Cheops are part of his wide variety of techniques.

Many of these techniques originally worked with little gadgets that mechanically calculated these "important" numbers. Little wheels and puzzles, you would dial up the present market levels in it and the pointer would show the various Gann numbers as output. To the best of my knowledge this represents the first historically documented case of a professional trading guru marketing a dodgy black box trading package. The workings of these devices was obvious enough, you would turn the dial and there is the answer, however how Gann never came up with any sort of evidence as to how he found his algorithms, he seems to be the L. Ron Hubbard of futures trading, presenting his "research" as a fait accompli and never subjecting it to any form of scrutiny.

In true Gann tradition, even today his methods are intentionally kept secret. In order to learn the methods you have to pay a lot of money, $1,000 books, $10,000 courses and camps, various shonky gurus and black box systems that probably have nothing at all to do with Gann use the name just to excite people. If you search the Internet you can find a vast trove of Gann info, much of it sceptical. Although now out of print, available from only one company who sells a variety of Gann materials for grossly inflated prices ($2000!!!!! For a book reprint???), to my surprise the Gann book "How to Make Profits in Commodities" somehow made it into my local public library. It is a long and confusing book, tedious and hard to read. Much of the good stuff is already common knowledge, perhaps he should be attributed with much of the basic knowledge, perhaps he just ripped off other trading methods and confused things by inventing little puzzle-like methods for pushing numbers around. For the more advanced forecasting techniques though, I am not so sure...

Weird capitalisations seem to be a Gann signature, words regularly appear in ALL CAPS to emphasise how important they are. (If you've ever read any of Gann's books you'll know his most enduring contribution was his pioneering work on the formatting of text, a style that has been widely copied by get-rich-quick spammers everywhere.) He spends an enormous amount of time reminiscing about his past forecasting successes (the words "which I predicted" are common). Gann may or may not be the worst example of such writing, but I get the impression every time you read one of his books that he is trying hard to impress on you what a genius he is, which is consistent with my theory that he's just trying to market himself and flog more seminars.

After several years of studying these methods to find out if there is anything much in them, I am convinced that there isn't. From searching the Internet, to conversations with Gann traders, all I have seen are confusing little tricks that lead to a chart covered in lines which go in every direction. Some of the lines correspond to trend changes, most don't. The lines that work are usually redrawn in bold ink and circled in red when the methods are demonstrated, but no explanation is given for the ones in feint ink which don't show anything of consequence. If you draw enough lines some of them will intersect at "important" places, so as far as I can tell Gann methods merely work by throwing out a thousand numbers and leaving it to you to guess which ones matter.

I wouldn't even bother talking about Gann except that in Australia a company that advertises very widely sells this material starting from $995 for the first course, which contains a small book and some posters, through to "Trading Incubators" costing thousands. You have probably seen their ads in the newspaper, I get asked about them all the time. I have seen most of the material offered, and what works is generic trading info that was mixed up with the Gann. A simple Gann charting technique which is moderately useful is taught and then you have to spend big bucks to get the rest. As the tapes and pamphlets they send out boast endlessly about the forecasting methods these guys teach, but the first course doesn't teach you anything about forecasting, the whole thing reeks of a bait and switch scam. I don't recommend it.

Gann on Money Management (?)

1. Amount Of Capital To Use: Divide your capital into (10) equal parts and never risk more than 1/10 of it on any trade, (try 5%). In today's market, you should work with at least $10,000, preferably $25,000, in risk capital and not risk more than 10% on any idea. If you try to work with less capital or don't have enough risk capital, I believe you should not trade commodities. This capital should not exceed 10% of your net worth.
2. Use Stop Loss Orders: Always protect a trade with stop loss orders to limit your losses. In today's market, use a (3) to (1) risk-reward ratio, risking no more than 10% of your risk capital, (try 5%); risk $500 to make $1,500, or do not make the trade.
3. Never Overtrade: This is violating your capital rules. Put only 10% of your capital at risk; never put more on any one idea.
4. Never Let A Profit Become A Loss: After you have a profit of $500 or more, move your stop loss up to break even so there will be no loss.
5. Don't Buck The Trend: Never buy or sell if you are not sure of the trend as indicated by your charts and rules. If you can't determine the trend to be either up or down stay out of the market.
6. When In Doubt, Get Out: Conversely, never get in until you're sure by using your trading rules.
7. Trade Only Active Markets: Keep out of slow, dead ones.
8. Distribute Risk Equally: Follow only (3) to (5) markets, trade in two or three different commodities. Trade a mixture of metals, grains, meats, currencies and interest rate futures. Small Traders try grains, meats, metals and foods. Large Traders can use any of the markets.
9. Use Market Orders To Exit A Trade:Trade at the market when you liquidate a position. Limit orders to enter a trade, but market orders are the best to liquidate.
10. Don't Close Out Your Trades Without A Good Reason: Follow up with stop loss orders to protect your profits. Let your stops for losses take your position out of the market. Short-term Traders liquidate at Double Tops, Double Bottoms, and Triple Tops, Triple Bottoms, unless the market is moving extremely fast, hold at Triple Tops and Bottoms.
11. Accumulate A Surplus: After you have made a series of successful trades, put some money into a surplus account for a buffer.
12. Never Buy Or Sell Just To Get A Scalping Profit. Trade with the trend for the long pull. The more you enter trades, the more risk you take.
13. Never Average A Loss: This is one of the worst mistakes a trader can make. For example, Gold bought at $400 per oz. falls to $450. Don't buy more to average your price at $475. It could fall to $450 again leaving you twice the loss.
14. Never Get Out Of The Market Because You Have Lost Patience: Nor should you get into the market because you are anxious from waiting. For example, if you are holding Gold long for (2)-(3) weeks and it goes nowhere, as long as the trend is up, and you are not stopped out, stay in.
15. Never Cancel A Stop Loss Order: Once it has been placed at the time of the trade, leave it. This is the kind of discipline needed to make money.
16. Be Just As Willing To Sell Short As You Are To Buy Long: Your objective is to stay with the trend and to make money. If the trend slows down, sell on rallies to buy back at a lower price.
17. Never Buy Just Because The Price Of A Commodity Is Low Or Sell Short Just Because The Price Is High.
18. Be Careful About Pyramiding At The Wrong Time: Wait until the commodity is very active and has crossed resistance levels before buying more and until it has broken out of the zone of distribution before selling more. Adding to your positions can be very profitable at the right time. Select commodities with a strong trend up when buying and with definite downtrend to sell short.
19. Never Hedge: If you are long one commodity and it starts to go down, don't sell another commodity short to hedge it. Get out of the market. Take your loss and wait for another opportunity.
20. Never Change Your Position In The Market Without A Good Reason: When you make a trade, make it with good reason according to some definite rule. Then do not get out unless there is a definite indication of change in trend.
21. Avoid Increasing Your Trading After A Long Period Of Profitable Trades: You should keep a disciplined, planned trading program based on 5%-10% risk.
22. Don't Guess When The Market Has Topped: For long-term Trades (one month or more), let the market prove it is at its top. The same holds true for bottoms. By following definite rules, you can do this with accuracy. We give you how many times a top or bottom should be tested before breaking out.
23. Don't Follow Another Man's Advice Unless You Know That His Trading Systems Work.
24. Reduce Trading After The First Loss - Never increase! Risk 5% on the next trade.
25. Avoid Buying or Selling Late: These are double mistakes.

    When you decide to make a trade, be sure that YOU are not violating any of the (25) rules. These are vital to your success. It is important to have enough money to trade these markets for many years to come. Proper use of risk capital will keep you in there. When you close a trade with a loss, go over these rules and see which ones you have violated. Then, do not make the same mistake again. Experience and investigation will convince you of the value of these rules. Observation and study will lead you to a correct and practical theory for successful trading in the futures market.