Saturday, June 18, 2016

Adding color to Mr. Gann's 22 losses in "The Ticker Interview"

You'll need to have read the immediately preceding essay to understand this one.  The question was posed whether Mr. Gann took 22 losses in one month of trading as an observer recorded his 286 trades in 25 days; only to be "fashionable."  I contend Mr. Gann could have recorded 286 winners but he "took a dive."

Let's add to the amazing mathematics that might be derived from 286 trades, 22 losses and 264 winners.  Already on the table is the two-part reductions of the number 264 to arrive at the same end, 11 which create the quotients 66, 33 and 11 (in yellow) and 88, 44 and 22 (in purple).  The third part of the series giving all 9 two-self same digit numbers creates the latter from the already formed former, namely the numbers 55, 77 and 99 (in blue).  Here's that table from the previous essay:


Not really the new ground or 'color' promised in the title but I did add some color(s).  Okay, here's the  alluded new ground in a table:


Four points:
  • 1.  In green.  Look at the two-part reductions in the first table.  In the first of two you divide by 2, 2, 2 and 3 and in the second you divide by 3, 2, 2, and 2.  Those series of divisors each add to 9 and arrive at the final product of 11.
  • 2.  Look again at the first table at the red highlighted numbers.  The first reduction is 132 which divided by the smallest reduced number, 11, gives you 12.  12, one of Mr. Gann's favorite numbers.  You can extend the math game to the number 264, the number of gains.  That divided by 11 gives you 24 or the first square of 12 or...the number of hours in the day.
  • 3.  What about that third series of numbers highlight in blue?  Those 3 numbers are spaced by the number of losses...22.
  • 4.  Is there nothing more we can do the numbers?  In tan of the second chart, you'll see the division of many of the numbers is a consistent 1.5.  Not presented, you will find similar divisions producing 2, 1, 1.4 and 1.8.  
What an exquisite number that 264 derived from one of its subsidiary products, the number11.  Did Mr. Gann coincidentally, derive this display of numbers by randomly choosing to enter 286 trades and randomly incur 22 loses?

I don't think so but I have a low threshold for proof.  I've seen too much.

*******

When once I marveled over the 286 trades with only 22 losses, a noted person emailed me to inform me that a student of Mr. Gann and published author of his revelations had traded in silver and gold in the 1980s and created a great wealth from a modest trading fund; those results were audible from receipts and the record can be found online.  I did the same thing, having started with less than $10,000 September 1, 2008 and closing my accounts on September 29, 2008 with a seven digit number which I deposited in the bank out the back door pending option settlement.

[A tip of the hat.  Robert Prechter put his academic record on the line and entered and won the 1984 U.S. Trading Championship.  Obviously wrong a lot of the time, he demonstrated an "edge" which he proved true in a short time frame.  My 2008 success (and later failure) was based on that same methodology, my lack of any discipline and the "Henry Watson pathology" found on page 200 of TTTTA).]

The differences in our respective stories are 1) I lost most of that money (save for my adequate retirement fund) in the next 4 years proving I didn't know diddly, 2) I did it over a 3-week period where he did it over years in the 1980s in the most bullish metals market in history, and 3) he sells his studies of WD Gann for thousands of dollars per course where I provide whatever my questionable insights for free.  My points being, can you buy the true perfect knowledge of WD Gann?  Well, he isn't selling that as I can determine (although it might be advertised as such) and I don't know it.  

So, I'd make this challenge.  I don't have a lot of money but enough that I'd fund my time and expense to attend anyone who would walk the NYSE floor (of course, this could be done sitting in an office with a person or person present and auditing the results) trading for 25 days to see if a trading record could be amassed rivaling 286 trades with only 22 losses.  I'll put together a coalition of my alma mater CPA firm and the other major CPA firms and, jointly, we "will walk the floor" with anyone willing to undertake this challenge.  I think all of us, except the one trading, would have a jolly good time.

Obviously, I do not expect anyone selling WD Gann trading courses to risk their market franchise to accept such a challenge.  First, they don't have that perfect system and second, if they had that knowledge, why would they risk their personal safety in dramatically demonstrating their possession of it?  

Jim Ross

2 comments:

  1. Gann "modifed" the interview. I am sure you know there are 2 versions.
    Slight changes to feed his need to hide things in plane sight.

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    Replies
    1. Actually, I was not aware of that. The Ticker Interview seemed a bit, well, staged.

      His explanations and descriptions of the market were too perfect. His exposition on the market likened to the periodic table with each stock in a group having similar properties alludes to the analytic nature of the solution to the market.

      What I am working on is the composite market and ignoring the individual properties of individual stocks. The composite will be the "curve of the future" or the independent variable. Ultimately, the use of individual vibration determined by Luo Clement's (who is WD Gann IMO) methodology would be applied to the "curve of the future" much as you would apply a multiplier to the independent variable to arrive at the value of the dependent variable.

      But, aside from all that, any person believing in "random walk" must declare WD Gann, Wyckoff and the independent observer, frauds and conspirators to avoid the uncomfortable position that he had only 22 losses.

      Ultimately, the future is an analytical structure, not Gaussian. Predetermined. It is as he said so many times of his methods; math and science.

      Jim

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