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3 Introduction Over the years, many market enthusiasts have become familiar wilh the remarkable forecasting and trading record of W.D. Gann. Many so called "Gann experts" have tried to figure out how Gann was able to trade with such a high accuracy rate and make so many incredible market predictions. For example, the Ticker and Investment Digest, volume 5, number 2, December 1909, shows that W.D. Gann took a total of 286 trades in the presence of William E. Gilley of which, 264 were profitable winning trades. His success rate was an amazing 92%. In this 25day period, which the article covers, Gann was able to double his initial capital ten times for a gain of 1000% on his margin. It has also been reported that Gann carried a miniature version of the Square of Nine with him into the trading pits during his most successfully recorded trades. The source of this information is Mr. Renato Alghini an associate of Ganns for nearly six years. Gann believed that every top and every bottom in the markets had a mathematical counterpart in both price and time. He quoted Faraday saying "there is no chance in nature, because mathematical principles of the highest order lie at the foundation of all things. There is nothing in the Universe but mathematical points of force".
The true origin of the Square of Nine is unknown. It is believed that Gann either discovered it in Egypt or India and that it is of some ancient origin. I have talked with some friends of mine who are from India and they had never seen anything like the Square of Nine. One suggested that it may have something to do with a type of Vedic astrology but he was only guessing. My personal belief is that it probably came from Egypt because the Temple of Luxor 1 1 5 the Square of Nine in its architecture. However, this is only an opinion. The truth is that nobody knows for certain where it came from. Maybe Gann invented the thing himself? The only thing we know for certain is that Gann used the Square of Nine and considered it very valuable. In his Egg course, Gaim describes the Square of 4 as the "even square" because it is the square ofthe first even number, i.e. the square of 2. The first odd square would be "1" but this does not produce a number greater than itself because 1x1 = 1, The first odd square greater than itself is "9" or 3 squared. Gann said, "We use the square of odd and even numbers to get, not only the proof of market movements, but the cause". What is the Square of 9 (Keep a Square of Nine Chart in front of you while reading) The Square of Nine is basically a spiral of numbers starting with the number one in the center (or apex of the Great Pyramid) with the number 2 immediately to the left. The rest of the numbers spiral around the center in a clockwise fashion to the number 9, which completes the first cycle of numbers around the center. 10 through 25 completes the 2" cycle, 26 through 49 completes the 3"*, etc. The square is divided into eight 45degree angles. On the cover page I have provided a copy of the Square of Nine. You also have a large Square of Nine chart (for Microsoft Excel) included with this course that you can referto as well.
The numbers that run through the center in the shape of a "+" sign are the cardinal niunbers. The numbers that run through the center in the shape of a "X" are the comer numbers. In the first cycle around the center, there is one digit separating each 45degree angle. In cycle number two (10 to 25) there are 2 digits separating each 45degree angle, tn cycle three (26 to 49), there are 3 digits separating each 45degree angle. In cycle 1000; there would be 1000 digits or cells separating each 45degree angle. Technically, the number "1" in the center is a complete cycle and would therefore be cycle #1, but there is a nice simple mathematical relationship to the cycle niunber and the difference between numerical values ofthe 45degree angles when you count the Square of Nine numbers in this maimer. To fiilly appreciate the Square of Nine in terms of its geometric origins, take a look at the large chart ofthe Square of Nine that is included with this . Try to visualize it as a pyramid. At the very top or apex of the pyramid is the number 1 and there are four equal sized triangular walls descending down to the pyramids square base. Each block in this pyramid is given a number as you work your way down and aroimd each level of blocks. Now if you remember, the numbers on the are called the cardinal numbers. These numbers are all separated by increments of 90°, i.e. 90°, 180°, 270° and then 360°, which brings you back to the location that you started from. The numbers on the "X", which cormect the four comers of the square base, i.e. the comer numbers, also are separated by increments of 90°, giving the appearance of an Egyptian style pyramid. The cardinal "+" and comer "X" niunbers divide the square base of the pyramid into 8 equal divisions of 45°, hence its other popular name "The Octagon Chart" (Octa meaning eight).
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