Trading is a zero sum game. Winners with smarts take money from losers without smarts.
One of the great ways to become a loser (and give your money to winners) is to fall for the con. One of the great cons is W.D. Gann who promoted a trading method subjectively built around all kinds of great sounding, yet unproven, “ideas”. Consider some chat forum posts that praise Gann:
Post #1
Well, I was in LA at the time and there was a large meta-physical bookstore called Bodhi Tree. I found 9 of the books and started reading other books that were related to the subject. Some of the subject [sic] I read are [sic] Astrology, Music (Acoustics), Physics, Kabbalah, I-Ching, Meta-physics and Hermetics. I think by then I read about 80-90 books, thanks to my speedreading. By then, I had a good idea about Law of Vibration. Gann Analysis and other topics started to connect. Well, I think it was around mid-1999, sacredscience.com opened up, I bought most of the courses there. First, they had a 1/2 price sale so I bought as much as I can in a limited time, also. I understood most of the stuff but I found a few more topics that I found interesting like Chaos Theory, Sacred Geometry and others.
Post #2
It’s part of cycles. Planets move in cycles, market has cycles, people has cycles…there’s no difference…Seriously, angles are largely a representation of market cycles. Drawing Astrological line are just like drawing a 1×1 line on your chart. They should be taken in the same manner. Separation of both creates mysticism and confusion. After looking deeply into Astrology, I found myself feeling stupid about separating it from the start.
This kind of talk will not make you money. Trend followers do not think like this. Rational people do not think like this. You can’t make money thinking like this! Avoid this kind of stuff and avoid giving your money to the winners in the great zero sum game.
More Gann nonsense:
Download the Adobe PDF Brief on Gann.
What the Gann Con Reveals About Trading Psychology
The two forum posts above are not written by stupid people. They are written by people who have read 80-90 books, studied multiple disciplines, and spent significant money on courses. The effort is genuine. The direction is wrong. The Gann method works as a con precisely because it rewards effort with complexity rather than results. The more you study, the more connections appear. Kabbalah connects to market cycles. Sacred Geometry connects to price levels. Astrology connects to angles on a chart. The system is infinitely extensible because it is not falsifiable. There is always one more book, one more course, one more connection to draw. The pursuit feels like progress. The trading account does not agree.
This is the structure of every successful trading con. The method is presented as deep knowledge that rewards serious study. The serious student produces no profitable results but attributes the failure to insufficient study rather than to the method’s lack of validity. More courses are purchased. More connections are drawn. The winners in the zero sum game are the course sellers, not the students.
Trend following requires no mysticism, no planetary cycles, no sacred geometry, and no law of vibration. It requires price data, a set of rules for entering and exiting based on that data, and the discipline to follow those rules. The edge is in the systematic application of the rules across a large sample of trades over time. Nothing else is required. For what those rules actually look like, see the TurtleTrader rules.
Frequently Asked Questions
What is the W.D. Gann trading method?
W.D. Gann promoted a trading approach built around subjective concepts including geometric angles, cycles, astrology, and numerology. The method has no verified predictive track record and cannot be tested objectively because its interpretations are flexible enough to explain any outcome after the fact. It has generated significant revenue for course sellers and newsletter writers while producing no documented edge for traders who have applied it.
Why do smart people fall for trading cons like Gann?
Because the con rewards effort with complexity. The more you study, the more apparent connections emerge between the system’s concepts and market behavior. This creates a feeling of progress and deepening understanding that substitutes for actual trading results. The method is not falsifiable, so failures are attributed to insufficient study rather than to the method itself. The pursuit continues indefinitely.
What is the zero sum game and how does it apply to trading con victims?
Trading is zero sum: for every winner there is a loser on the other side of the trade. Traders who approach markets with unverified mystical frameworks make systematic errors that informed counterparties capture. The money does not disappear. It transfers from the traders relying on astrology and sacred geometry to the traders relying on price data and systematic rules.
Trend Following Systems
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