For learning Purpose:-
time Gann covers this topic in some way or form in nearly all of his books and trading courses. Unfortunately, the clarity of his message is at best, difficult to understand, so you really need to know what to look for when he discusses it. He covers the topic well in chapter 7 of his Master Stock Market Course but goes into a great level of detail in chapter III of his book How to Make Profits in Commodities on pages 56 to 59.In his discussion on how to forecast daily moves,Gann outlines the importance to watch for a change in trend 30 days from the last top or bottom, and then again for changes 60, 90, 120
and 180 days for significant tops or bottoms. Those day counts that Gann refers to however are simplifications of how to actually calculate the time frames you need to watch. In How to Make Profits in Commodities, Gann describes the time period of 90 to 98 days as an important time. The problem with trying to trade or forecast using a day count as wide as this is that it spans a time
frame of eight calendar days – and quite a bit can happen in the market over eight days! The eight-day time span Gann referred to, was an oversimplification, as he had actually devised a method to calculate the exact date or time period to look for. The secret behind understanding how Gann did this is covered when he discusses the concept of ‘How to Divide the Yearly Time Period’in his books and courses. To illustrate, in his book How to Make Profits in Commodities, Gann outlines that you should:
Divide the year by 4 to get the 3 months’ period or 90 days, which is 1/4 of a year or 13 weeks
Each 90-degree rotation represents one full season of the earth – spring, summer, autumn, winter – with the true beginning and end of these seasons determined by the earth’s position relative to the sun (the equinox). In the southern hemisphere, our summer actually begins on or around 21 December each year culminating approximately three months later on or around 21 March.
During that period, the earth will have travelled exactly 90 degrees around the sun in 90 days. As the season (or cycle) of summer ends, the season of autumn beings, and so we travel another 90 degrees which end on 22 June. Whilst the earth has rotated another 90 degrees during that period, it has taken us a total of 93 calendar days to get there. The two equal 90-degree movements in time, have not been represented by two equal movements in days. The earth’s ‘natural divisions of time’ as it moves through its seasons is summarised in the table below. Each division is an equal 90 degrees in time but will vary in length according to the calendar.
The natural divisions of time explain why you will sometimes see time counts in the market expiring exactly on a 90 day period and others on a period of 92 to 94 days. The highest probability daily time counts Now that we have a firm grasp on how time
counts can be measured in degrees, I would like to share with you what I consider to be the most important divisions of a yearly cycle to look for when determining future daily changes in trend. In my experience, the time counts which occur the most consistently in all financial markets to product-market tops or bottoms are:• 90 degrees (or multiples of 90 degrees) by dividing the cycle into quarters; and • 120 degrees (or multiples of 120 degrees) by dividing the cycle into thirds Total degrees travelled Days between each season Total d ays travelled 0° 21 March (start)
90° 22 Jun e 93-day s 93 day s
180° 23 Se ptember 93 da ys 186 da ys
270° 21 December 89 days 275 days
360° 21 March (end) 90 days 365 days
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