Forex

May 14

# What is the Gunn approach?

The Gunn Method is an approach to financial trading that uses a combination of technical analysis, time cycles, and geometric patterns to predict price movements in financial markets. It is derived from the theories and techniques developed by W.D. Gann, a legendary stock and commodity trader in the early 20th century. His unique approach has gained considerable attention in trading communities due to its emphasis on price and time analysis and a mystical or esoteric element that has intrigued traders for decades.

## Who Was W.D. Gann?

William Delbert Gann, commonly known as W.D. Gann was born in 1878 and became one of the most famous traders and market forecasters of his time. He is best known for his methods of technical analysis, which utilize geometric patterns, angles, and various mathematical techniques to forecast market movements.

### The Gunn Method is built on several key components, which include:

Gann Swings: These lines provide vital information that can help determine any market’s trend and information about the upswings and downswings. The most famous are the swing lines on two and three bars.

Gann Angles: These are lines drawn at specific angles on price charts, often used to identify support and resistance levels. The most famous angle is the 45-degree angle, known as the 1×1 angle, representing an equal price and time movement rate. Other angles include 2×1, 3×1, 1×2, and so on.

Gann Squares: These are geometric patterns that help traders visualize price movements within a specific time and price range. The “Square of 9” is one of the most well-known Gann squares, often used to find turning points and potential reversal areas.

Time Cycles: Gann believed that markets move in cycles, influenced by specific time intervals. He identified various cycle durations, such as 30, 90, 120, and 360 days, and used them to forecast market trends.

Price-Time Relationships: The Gunn Method emphasizes the relationship between price and time. Gann believed that price and time are the same thing, which can be visualized using geometric shapes and patterns. This perspective leads to the concept of “squaring price and time,” indicating when market movements might converge with significant price changes.

## The Mystical Aspect

Beyond the technical aspects, Gann’s approach carries a certain mystical or esoteric element. He often used astrological references, sacred geometry, and numerology in his analysis, leading to intrigue and debate among traders. While some find these elements fascinating, others view them skeptically.