A SAMPLE OF THE AUTHOR’S STYLE…
“Life affords no greater pleasure than that of helping others
who are trying to help themselves.”
With this book, I’m going to argue that you can make profits in the commodity markets (like Mr. Gann said) as well as all other markets. Further I argue that you don’t really need to devote much time and effort to accomplish that feat. I hope to help convince you that this is true. At a minimum, maybe I’ll convince you to do a bit of “big picture” work for yourself. If that happens and your life is made better, my book will have become primarily dedicated to you.
I mostly decided to write this book for my son. He’s nineteen years old and not ready for such things as investing and retirement planning. I’d guess that his attention span is limited to about six inches…J Someday he may care more about finances.
Selling a book was never part of my “master plan.” Mr. Stewart prompted me to do this and make it something that he might make available to you. He’s shifty that way, but I’m glad that he “made me” get this done. I now know how much effort goes into writing books and I’ve gained a new appreciation for authors like Mr. Gann. I also learned more about my own studies. Work generally pays a dividend.
I vowed to Mr. Stewart that I would not agree to sell a book unless I wished I could have bought that book for myself 20 years ago. If I didn’t think it would benefit me back then, I wasn’t interested in selling it now. I have satisfied my own requirements. I can honestly say that I wish I had a copy of this book back then.
I hope this book “pays for itself” and you cherish its simple truths. I don’t think our combined trading activities will be moving many markets. It is natural laws that will do that for us. We just need to be prepared to “catch the wave.” My goal with this book will be to show you some simple ways you might accomplish that feat.
HOW THIS BOOK WAS BORN
I’ve purchased books published from the Sacred Science Institute in the past and they have made positive contributions to my knowledge and total experience. If you are like me, you get occasional emails about new courses and special offers.
I was curious about the offerings in one of those emails. I replied with a question about the complexity and time involved with mastering the newer esoteric and mathematical offerings. Don’t get me wrong, I love wonderful esoteric and mathematical studies. I just don’t always have the time or mental horsepower.
In my email to Mr. Stewart, I sent charts to show how I preferred simple stuff that often worked. I didn’t want to get a “PhD” in some new topic of study. I wanted to keep things simple so my little brain might hope to grasp them. I joked with Mr. Stewart that I was showing him the easy stuff that few people seem to see the value in doing for themselves.
Mr. Stewart then commented that the charts brought back memories of his studies with Dr. Jerome Baumring way back in the 1980s. Then, he suggested that these things would be a wonderful little course for someone that liked to keep it pretty simple and trade medium to long-term. That was especially true once we discussed my trading approach. In short, these are things he already wanted to see in a book.
I thought the man was nuttier than a squirrel turd... I didn’t know ‘Jerome Baumring’ and I didn’t think anyone would want to buy a book about simple things that they could do for themselves. Then, I remembered my own years of largely ignoring Mr. Gann’s words and how many years it took me to begin to “understand” his many teachings.
Let’s see if you like these simple concepts as much as I do. Beginner or seasoned trader, I hope there is something here for you. We’ll keep it simple and show you how and why. Remember that Mr. Gann didn’t have computers and charting software and all the fancy technical indicator witchcraft of today. He just needed his work ethic and some elegant mathematical simplicity.
MY DISCLAIMERS, ASSUMPTIONS, AND PRINCIPLES
· I provide absolutely no trading advice to you. This book is an academic study of doing very few of the many things Mr. Gann told us to do. If you’ve done the requisite work for yourself, and are adequately convinced you can try to trade, your trading decisions are yours and only yours. You are CEO and Chairman of the Board for YOU and your accounts.
· If you seek an instant riches trading plan, this book is probably not for you. You may hit it rich relatively quickly, but that isn’t the goal here. Instead, I’d rather show a reasonable business plan.
· I’ll not sugar-coat things. Trading is a difficult business to figure out. If it wasn’t, everyone would do it well. Everyone DOES NOT trade well. For many prospective traders, they also have a full-time job and/or families and other commitments. Those people are often too busy “making a living” to change their lives.
· I am indebted to many wonderful analysts, friends, and authors who have made their work accessible to me. While I attempt to clumsily stand on their shoulders, the focus of this book is just a small smidgeon of Mr. Gann’s work. Accordingly, I’ll generally stay pretty specific to what Mr. Gann said or did so I don’t inappropriately infringe upon the work of another. Please know that the very limited scope of this material leaves out many wonderful concepts and theories. I intentionally keep it simple.
· I will provide charts as visual aids. They do not present a perfect picture. We will focus on simple mathematical solutions. However, sometimes rounding and other variables can cause “assumptions” to enter the picture. For example, if you need half of 13, you get 6.5. It is difficult to plot 6.5 bars into the future.
Further, plotting horizontal lines on long-term charts can be visually deceptive. The lines may give the appearance of more precision than was actually present. A line may “cover up” a somewhat material amount of price on a chart.
As Mr. Gann said, check everything for yourself. Exact mathematical precision will be somewhat rare with most techniques. That is an important concept. Our goal will be to make reasonably close predictions. Precise predictions are always preferred but I’ll show that they are not required.
· I am human and will make errors. I’m of the opinion that Mr. Gann purposefully left errors in his writings. Some errors provided clues to those students who did enough work to notice the error (or to identify which student is inappropriately sharing his work). I’ve not done that. Please point out any material corrections. I’ll try to fix them and send out an errata sheet if deemed needed.
· I’ll make references to The Bible. This is because Mr. Gann did so. I reference The Bible as a book with knowledge and not as an imposition of my beliefs or lack thereof. No offense is intended. Let’s all be HAPPY! J
· I’ve written this book much the same as I speak. I’m no polished gentleman and may use some “colorful” language. I mean you no offense. That is just my culture and personality. Mr. Gann seems to have been as dry as cracker juice. I tend to prefer giggling while observing life.
· This book is intentionally geared to provide thoughts for finding extreme prices and/or times well in advance. Further, the intent is to show that you can target large returns in the markets without spending much time hunting your trades. Accordingly, we will oversimplify things to show that the easy stuff really can be some of the best stuff.
· Generally, markets climb like a fat man up a mountain, then drop like a hooker’s pants. They move upward slowly and take rests. They can go a very long way. Then, they often fall “horrifically.” So… the fastest and largest price moves will tend to be going downward with bear moves. We will target both bull and bear markets. However, as a general rule, the bears will more often provide the fastest and juiciest profit potential.
· Many of Mr. Gann’s documented trading campaigns started with small accounts ($300 - $1,200). There was a reason for that. If you can’t take small sums of money and turn them into large sums, you damned-well better not start with large sums! The easiest way to end up with a million dollars in the stock or commodity markets is to start with a billion.
From my studies, I believe Mr. Gann “blew out” many accounts and loved to “gamble.” That said, he learned to “gamble” with knowledge and strong risk management. We’ll discuss his rules throughout this book in one form or another. With those rules in hand, this book will assume that we have only a small amount of capital to lose. We’ll advocate small bets with limited risk to hopefully generate comparatively large profits.
· Whatever the apparent strength of your analyses, Mr. Gann tells us to always trade with a stop-loss order. We can and will be wrong. When that happens, we should be prepared to change our minds. Mr. Gann said that a man that couldn’t change his mind would soon have no “change” to “mind.” I’ll approach his rule of using stop-loss orders with a twist.
· Mr. Gann tells us that we should review the past. Accordingly, we have to find historical data to help us find our future opportunities. Our data of choice must be selected for the purpose at hand. We generally have difficulty getting a wealth of historical data. Sometimes, we have to do things the old-fashioned way and use books or even the library (gasp!). Thankfully, some of Mr. Gann’s books are “encyclopedias” of market history. I’ll provide examples of this for Corn and Wheat.
· Hand charting is a lost art. When you hand chart, your mind and body “internalize” history in some way. The Gann purist in me has to recommend that you try it. It is an interesting learning experience that makes you think about “scale” and other concepts we’ll avoid in this book. If you wish to think about “scale”, Daniel Ferrera’s latest book, The Path of Least Resistance, is one you might consider. If you understand what he shows, you are mastering a few of Mr. Gann’s concepts. If you understand about “scaling charts”, you’ll have more fun with hand charting. Otherwise, you’ll have to learn about “scale” as you go.
· The inherent nature of this book is that my examples have the benefit of hindsight. I hope to show that hindsight can become foresight with many examples of Mr. Gann’s techniques working after he died.
· After I had written a few dozen pages of this book, I noticed my repeated use of the word “again.” Get your mind right and use that as a subliminal message. “A-GAIN”, over and over. Again, A-Gain, and A-Gann.
· We don’t need to trade often. We just need to trade well when high-odds opportunities present themselves… AND we can formulate a low-risk and high-reward strategy. That is somewhat uncommon, “common sense.” We will target quality and not quantity. Actually, my examples will be slanted toward identifying the largest “generational” opportunities. We can trade many other signals and setups. However, I show you things Mr. Gann said you can almost surely succeed with if you have the patience and discipline.
· Please note that I will NOT be showing you what I’d consider to be revolutionary new trading and analysis concepts. My intent is more to “package” some of Mr. Gann’s simplest concepts into a useful and pretty easy trading approach. I’ll try to show pretty simple ways Mr. Gann told us to trade. Simple is good.
· I’ll attempt to pay homage to Mr. Gann by proving that even the simplest of his words are well worth studying. Hopefully, this book will prove that to you. The most complex of his words are well worth studying too! However, our goal here is keeping it simple and developing a proper trading mindset. We’ll tend to stay with “the basics” that provide a solid foundation for trading success.
· I have biased my coverage toward commodities in this book. Part of my objective is to show that Mr. Gann’s own words still echo in today’s markets. Using Mr. Gann’s examples forced a focus on commodities.
However, we’ll be playing with “natural laws” and math. In theory, I can use the same techniques to find opportunities for trading currencies, or stocks, or bonds, or ETFs, or mutual funds, or Forex, etc. We won’t be intimidated by any market. However, my experience is more with the equities and commodities so that’s where I’ll spend most of my time.
· If you are serious about markets, I believe you should study all of Mr. Gann’s books and courses. He tells us in The Tunnel Thru the Air that most of us will need to read his book three times to gain an understanding. I’m still in the process of reading all of Mr. Gann’s works for the second and third times. I’ll provide examples showing why I decided that I should read his work much more than I had. In other words, I decided that I should generally try the things Mr. Gann tells me to try.
THE GAME PLAN
Rather than presenting a table of contents, let’s just have a game plan. That’s how an amateur author will choose to tackle this communication process. I’ll remind you about this and expand upon it as we progress. Here are the high-level objectives:
1. We’ll think about time and price in a short Part 1.
2. We’ll focus more on price in Part 2.
3. We’ll focus on time in Part 3.
4. I’ll discuss how I approach developing a low-risk, highly-leveraged trading and business plan in Part 4. When time and price collide at major trend changes, this will show a basic strategy that can be used to exploit the “knowledge” gained in Parts 1-3. We will be attempting to do what Mr. Gann told us to do. We’ll hunt “MARKET VIBRATIONS” in order to “make profits trading.”
“Education is what remains after one has forgotten
what one has learned in school.”
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