Black Wednesday – How George Soros Tried to Crash the Pound
Trading guides, webinars and stories
Trading guides, webinars and stories
William Delbert Gann was a stock & commodity trader in the early- to mid 20th century. He’s best known for developing methods of technical analysis that include using geometry and astrology to predict the financial markets. His most famous techniques are Gann Angles and the Gann Fan. He wrote a great deal about his trading techniques and they have been the subject of a lot of debate and criticism. In spite of that, many of them are still in use today. The majority of traders familiar with his approach outright dismiss these outlandish techniques, but some swear by them. Rather than evaluate the methods themselves, it may be worthwhile to examine the story of the man whose mind they sprang from. If for nothing else, but to provide an entertaining distraction for a few minutes.
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Gann was born the son of a farmer in 1878 Texas. As the oldest of 10 siblings, he spent most of his youth working on the family farm with little to no formal education. He was a self-taught man. He learned to read & write from the Bible. The cotton warehouses he worked at also taught him a great deal about commodity trading.
Later he moved to Texarkana where he got a job at a brokerage firm. In the meantime he continued to learn and improve his trading by attending night classes at a business school. It was also around this time that he married his first wife, who he had two children with.
His real trading career began in 1903. He started out trading stocks & commodities on Wall Street. It didn’t take long before he stopped trading for others and opened his own firm the same year. The new brokerage, named W.D. Gann & Company, ended up prospering.
Allegedly, one of his most notable successes was predicting the panic of 1907. This three week financial crisis resulted in massive bank runs that heavily strained the liquidity of NY City banks. It’s also sometimes referred to as the Knickerbocker Crisis,
There were rumors that William Delbert Gann managed to make a tidy sum of profits as a result of the crisis, although this hearsay was never confirmed. As an aside it’s interesting to point out that a year later he divorced his wife and married a woman 10 years younger.
Starting with his 30 page essay, Speculation A Profitable Profession in 1910, William DelbertGann would go on to write many books. His body of work ranged from technical manuals where he outlined his trading methods in great detail to sci-fi novels.
One notable example of the latter is The Tunnel Thru the Air published in 1927. Some view the fictional war that takes place in the book as prediction of WWII and Japan’s attack on the US. It’s worth noting, however, that W.N. Gann isn’t known to have made any such claims himself.
Of course what he’s best known for is his educational material. These include the Wall Street Stock Selector in 1930, New Stock Trend Detector in 1936, as well as How to Make Profits in Commodities and How to Make Profits Trading IN Puts And Calls, both published in 1941.
By the mid 1930s William Delbert Gann had both earned a reputation for his trading acumen. He also started making impressive profits from his educational material. At this point he was in his early 50s and he made several luxury purchases including a number of private airplanes and cruising boats. Whether or not his extravagant spending was the reason, he ended up divorcing his second wife in 1937. After the divorce he continued to focus on his trading and writing, eventually earning a spot on the Chicago Board of Trade in 1941 and later marrying his third wife in 1944.
Although it seemed like everything was going his way, he did have some personal worries. One of them was his falling out with his son John L. Gant in the 1940s. John worked at his father’s company both before and after the war, however, they ended up parting ways over two major disagreements. The first was the son’s criticism of astrology and astronomy as a means of technical analysis. The second was more personal in nature. Apparently he strongly disapproved of his father marrying a woman 30 years younger.
William Delbert Gann eventually both his trading company and the publishing rights to his works and moved to Florida. There, he spent the rest of his life teaching trading courses for prices of up to $5,000. By today’s standards that would be around $50,000.
As mentioned at the beginning of this article, many of Gann’s methods are still in active use today. Gann Angles and Gann Fans in particular. However, neither his personal life nor his professional work were entirely free from controversy. Although he’s credited with a history of highly accurate predictions, according to his son he was not able to support his family with his trading. Instead, his main income was said to be from his exorbitantly priced trading courses.
On the other hand it’s also fair to point out that much of this criticism is supported mainly by an interview with his son, who is known to have been on bad terms with his father. At the same time it’s also entirely plausble that his legacy is being heavily embellished by profiteers trying to sell his courses even today. As for how good the trading techniques of William Delbert Gann really are, we may take a closer look at them in the future. For now, here’s our advice on using financial astrology: don’t base your trading decisions on your horoscope.