W. D. GANN'S MECHANICAL METHOD (OVERNIGHT CHART)

Later in life, Gann becomes a bit frustrated that his students were straining to learn the more intricate astro-based techniques in 'The Truth of The Stock Tape,' and 'The Tunnel Thru The Air.' The older he grew, the more he would emphasize this simpler but ingenious 'Mechanical' Method.

Originally designed for the US Indexes, the Mechanical Method identifies a 2 to 4-day trend for its entries and exits. The real beauty of the Gann's Mechanical Method is that it is a self-contained trading framework. It works independently of astro and numerology, because it captures a repeating short-term pattern inherent to equity markets. This ancient market pattern determines the trader's risk, reward, and money management.

The Mechanical Method wows you once it is unlocked. Inside of Gann’s wonderful discovery is found timeless principles measuring supply, demand, and near-term market direction over a couple days. To see a picture of it, it simply looks like a bunch of random entries and exits on a chart. But the back-testing tells another story. We had to repeat it over and over by hand, because it looks too good to be true. These Mechanical methods are taught in their entirety in our "W. D. GANN: MAGIC IN THE MARKETS" Training.

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Because W. D. Gann taught to both professional traders who had access to the floor data in additional to retail investors, Gann organized different ways to trade the Mechanical Method. Gann delineates another variant which he earmarked the "Safest" method.

Pictured are the results for the 2020, 2021, and 2022 (so far this year) back-testing of Mechanical Method of the ES with just 1 contract per signal and 1 contract for runner trades. Results compare Gann's 'Basic' Mechanical Method with his 'Safest.' We have the actual trade diaries going back to 2017 proving these results are consistent. The column numbers represent net point return per month. We would advise shaving 10% off the profitability for slippage.

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The Mechanical Method labelled 'Basic' in these panels is the basic method Gann first describes and gives example trades of. The column 'Safest' was the method where Gann added pullback buying, multiple signal entry, and further safeguards which qualified entries.

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Gann gave the 'Basic' method to traders who has less access to market data and wanted fewer trades. "Basic' includes more double-reverse stops which could be handled by brokers in the 1940's and 50's. While the 'Basic' method waits until previous trades play out before entering anew, the 'Safest' method enters more lots on each new signal of the same direction.

Trades on both methods usually result in durations of a few hours to a couple weeks. Ideally there is a trade working at most times which is considered a 'runner,' or longer running trade than the first lot.

Though many traders and investors reel at the market volatility of 2020, W. D. Gann's Mechanical Method seems to work better. See the table to the right for 2020 through July All this through the most volatile market in American history.

These Mechanical methods are taught in their entirety in our "W. D. GANN: MAGIC IN THE MARKETS" Training.

W. D. GANN SOYBEAN MECHANICAL

Click to expand this graph of results for Gann's Soybean Mechanical System for the last 4 years. The Soybean Mechanical Method works on a similar principle as the basic Mechanical Method does on US Indexes, but the details are substantially different. The timeframe and cycle are a bit longer. Like the previous Mechanical Method.