the hAnDbook oF teChnICAl AnAlySIS1×1 line, also referred to as the Gann line. Gann’s preoccupation with balance
between price and time led him to the study of market symmetry and cycles, with
an especially strong focus on the geometrical properties of price action. He was
not only intrigued by the geometry of price and time, but also by the underlying
number systems that are representative of market geometry. He was fascinated
by the employment of even numbers and the squares of simple number series like
2, 4, 8, 16, 32, 64, 81,100, 121, 144 for forecasting potential turning points in the
commodity markets. Gann also applied psychologically significant number ratios
like halves, thirds, fourths, and eighths to both price and time. Due to the scaling
of price action with respect to specially selected units of time, Gann kept a tremen-
dous number of hand‐drawn charts depicting various scale settings for different
commodities at different price ranges. Gann was meticulous in the application of
numbers, ratios, and geometry to the markets and is best known for his squaring
of price and time, price‐time angles, and percentage‐retracement approaches to
market forecasting. Some books written by W. D. Gann include:
■ (^) Tunnel Thru the Air
■ (^) 45 Years in Wall Street
■ (^) Truth of the Stock Tape
■ (^) The Magic Word
■ (^) How to Make Profits Trading in Commodities
Cardinal, ordinal, and nominal numbers
Before we begin our study of Gann’s forecasting techniques, it would be best to
review the definitions of a few number‐related terms. A cardinal number describes
amount or quantity, that is, the number of items or events such as 5 cars, 24 bars,
7 days, and so on. Ordinal numbers describe the order of things, such as first, sec-
ond, third, and so on. Ordinal numbers do not represent quantity, but rather indicate
rank and position, such as the fifth car, the twenty‐fourth bar, the second highest
marks, and so on. A nominal number labels something, such as phone numbers, car
license plate numbers, social security numbers, and so on. Nominal numbers are not
representative of quantity or rank, but are rather used for identification purposes.
anniversaries, seasonals, and psychologically
significant numbers
Due to the obvious parallel between the number of days in a year and the to-
tal number of degrees within a full circle, Gann equated days to degrees in his
analysis. As such, 360 degrees represents one year or 360 days, 180 degrees repre-
sents one half of a year or 180 days, and 90 degrees represents a quarter of a year
or 90 days. Since Gann regarded ratios such one fourth, one half, three fourths,
and four fourths as numerically significant, he paid special importance to price
action occurring over the 90‐day, 180‐day, 270‐day, and yearly periods.
Gann also studied important anniversary dates of repetitive market tops and bot-
toms, including the seasonal behavior of price, especially for agricultural commodities.
Gann placed great importance in using only historical market peaks and troughs in