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Ferrera D. 2002 Everything Comes Full Circle

Everything moves in cycles due to the natural laws of action and reaction. By studying historical price movements, analysts can identify dominant time cycles that allow them to project future market trends. W.D. Gann used his knowledge of time cycles to accurately forecast market movements both in price and time. His research showed that harmonic divisions of circles correspond to natural cycles in financial markets at intervals of 15, 30, 60, 90, and 180 days. As an example, a simple 60-day cycle in the stock market is shown, and mirror imaging is used to forecast that the market will reverse over the next 120 days based on this repeating cycle.

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196 views3 pages

Ferrera D. 2002 Everything Comes Full Circle

Everything moves in cycles due to the natural laws of action and reaction. By studying historical price movements, analysts can identify dominant time cycles that allow them to project future market trends. W.D. Gann used his knowledge of time cycles to accurately forecast market movements both in price and time. His research showed that harmonic divisions of circles correspond to natural cycles in financial markets at intervals of 15, 30, 60, 90, and 180 days. As an example, a simple 60-day cycle in the stock market is shown, and mirror imaging is used to forecast that the market will reverse over the next 120 days based on this repeating cycle.

Uploaded by

thepaganntrader
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Everything Comes Full Circle

Cycles of Price & Time

Of all the techniques used in technical analysis, the use and knowledge of
dominant time cycles is one of the only methods that allows you to project and anticipate
a point in the future, where the market you are studying is likely to change trend. This is
possible because price action unfolds in repetitive rhythms over time. W.D Gann used his
knowledge of time cycles to make many incredibly accurate market forecasts in both
price and time. Gann believed that “Time is the most important factor in determining
market movements” because everything moves in cycles, as the result of the natural law
of action and reaction. “By a study of the past, I have discovered what cycles repeat in
the future”. Because a cycle literally refers to a circle, Gann knew that the harmonic
divisions of the circle would be accurate forecasting tools. This is applicable to all time
frames, hours, days, weeks, months, years, etc. Therefore, the important natural cycles
are 15, 22½, 30, 45, 60, 67½, 90, 112½, 120, 135, 150, 157½, 180, 202½, 210, 225, 240,
247½, 270, 292½, 300, 315, 330, 337½ and 360. The chart below shows a simple 60 day
cycle in the Stock Market. If we utilize another forecasting technique called a mirror
image foldback, we can make an interesting projection or forecast. Basically, the
technique assumes that the market under study has found a balance point and is now
going to fold backwards over the same human emotional energy that it has just crossed,
only this time in reverse. Because we are using a static 60-day cycle, the foldback
forecast would only be good for 120 days (2 x 60). The charts below, illustrate the
method.

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