It always surprises me that people just look for the short-cuts in life, the number of times my W.D. Gann page has been viewed and especially when someone puts into a search engine the search term: “did Gann use Fibonacci” or terms to that effect is frightening.
If you are one of those people, past or present, then you join the ranks of myself, as I have asked that very question and from my findings I’ve never found a satisfactory answer – even from the Gann “Experts”! I must add that I’ve not looked at every Gann expert out there as after a while you lose the will to live after sifting through their work only to realise that most of it could be disclosed in 10 pages or less and the rest of the books/course is just padded out rhetoric.
So Did Gann use Fibonacci? The answer is not that simple as a yes/no answer I’m afraid.
Firstly, there is no direct evidence that Gann used Fibonacci price levels, Gann used his own division of price ranges into 3rds and 8ths – some of these levels are close to Fibonacci levels but not exact matches.
Now the next question you should be asking is did Gann know of and understand Fibonacci?
The answer to that I am almost certain of that he DID – If you read Gann’s recommended reading list then in certain publications reference to Fibonacci and the golden ratio are mentioned and in Gann’s article on the Human Body reference to this also can be construed but also another different meaning too! Confused!
In my studies of Gann there is no direct reference to him using Fibonacci or the Golden Mean, he was probably more than aware of it as I’m pretty sure Gann studied everything to do with mathematics, but he opted NOT to use it directly opting for divisions in time and price of 3rds and 8ths and 16ths etc.
His most famous price division is his 50% level – even Fibonacci experts today use the 50% level – 50% is NOT and never has been a Fibonacci number! If you do not own any of Gann’s works then it is important to know that he wrote an entire course on resistant levels and focused heavily on the 50% level throughout his works.
I am fairly certain that if Gann had discovered Fibonacci levels then he would not of written so extensively about his other price range divisions as he did.
The message here, and I’ve looked into it for my own research in the past, is that Yes Gann was aware of the Fibonacci ratio but he did not employ it to price levels to trade with/from – he used his own natural divisions of price based on geometric angles and horizontal price division of 3rds and 8ths etc.
Hope it helps – If you have cast iron evidence that suggests Gann did use Fibonacci then email me (thehovistrader@gmail.com) with details and I’ll amend if I’m wrong.
If you are new to the subject:
Fibonacci was around centuries ago and in nature the Fibonacci sequence crops up a lot, Traders (myself included) have used Fibonacci. Elliott Wave theory really popularised the method and it is a key basis of EWT, with waves being a certain Fibonacci retracement or extension of a price swing – in my opion and findings it works sometimes but not all the time.
I recently published a blog post on the key 61.8% Fibonacci price retracement level and a random 42% price retracement level that worked more that the 61.8% level!
I have no doubt that Fibonacci plays a part and is present in the markets, I just don’t think it exists as everyone thinks it does.
The HOVIS Trader 