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One of the most well-known traders of all time is W.D. Gann. He has a vast dedicated following - but the fact remains, Gann was never successful with the huge profits that many of his followers claim. Gann's success rate had never reached 90% - which was often claimed.

Let's take a look at why Gann became a famous trader; let us examine his theories of investment. Before going through the details of his trading system, did you know that Gann's trading income was at $50 million? However, there's a myth about Gann.

Gann's son, Alexander Elder, tells the true story:

First and foremost, when Alexander's father died in the '50s his land estate value was only $100,000 - that includes the house.

Second, Alexander also confirmed that Gann was incapable of making sufficient money to be used for trading - hence, he sustained his earnings by selling and writing courses.

Predictions of W.D. Gann: Numerous sources cite he had an achiever rate of 90% in all of his trades - this is again untrue. If this was true then why would he write and sell courses and books to sustain his income?

Gann's Methods are Predictive: Gann came to a decision that all natural phenomena are alternating - this includes financial markets. This statement is true, but this is also an obvious affirmation. Everybody knows that we are all going to die, but the question is, when exactly?

You can't call it a predictive theory unless it can predict.

If the theory of Gann is really predictive, then the market would not exist, since we all would know the price earlier.

The theory of Gann is purely subjective; there is no way that Gann's theory can actually predict the future accurately. Therefore, this is not predictive theory at all, but merely subjective.

Gann's Logic: The foundation of Gann's theory is the rule that time and price should be balanced. Gann's methods are supported on the squaring of time with price - this happens when a unit of time equals a unit of price.

Example: Gann would take a striking high in the market, exchange that dollar unit into a given period of time and cast it ahead. When the time is reached time and price are squared - and the market turn is due.

In detail, how can a unit of time be equal to a unit of price? You will see the connection between the two is absurd.

However, this is not the only incompatibility used in Gann's analysis - we also gather the legendary Fibonacci numbers that are expected to work with impressive accuracy - but it actually doesn't. And neither do all sorts of geometry and astrology theories that attract the far-out investment crowd.

Gann had humble success, and then called for finding a predictive theory - that predicts nothing accurately.

Lastly, there are many subjective indicators mixed together. Theories can prove everything in hindsight. But their ability to predict the future is not so successful!