W.D. GANN's SPIRAL CHART or the "so-called:" INFAMOUS SQUARE OF NINE
While Mr. Gann did identify, discuss, and post a graphic for a "Square of Nine " in his Master Stock Course (1939 1st edition to 1953 5th edition), it was not what traders have been calling the "SQUARE OF NINE."
However, in that same Master Stock Course he did post the graphic of a "SPIRAL CHART ," and as best I can tell it is either exactly like, or very nearly like, the so-called "calculator" that traders are being told is Mr. Gann's "Square of Nine."
All of Mr. Gann's "Fixed and Variable Geometric Squares"--which he called the "Square of the Range"--works on the basis of drawing, or otherwise constructing, a "geometric," or "graphical," square that connects and balances price (or index values) on the the vertical planes (sides) with time on the horizontal planes (top and bottom).
Therefore, these "graphical methods" are VASTLY DIFFERENT than those calculations for the simple "mathematical squaring" of odd and even "whole numbers," as clearly described for the basis of the SPIRAL CHART; as well as, any of those so-called "Squares of Nine," or "Natural Squares Calculators," being sold to the public.
By the way, while I'll not go into here, as this "borders" on one of my "key revelations" in the Gann section of our Ebook, that Spiral Chart AND this so-called SQ-9 are actually just a simple "look up table," tool, or "calculator."
It was, "most likely," designed to help math students find the simple squares of odd and even whole number, with no decimals or fractions. In addition, this "tool," or "calculator," could also be used to find the simple square roots of numbers that are whole numbers. Needless to say, we can easily visualize where "look-up" tables and crude "calculators" where helpful back in time before we had electronic calculators or computers to do that for us.
By the way, in mathematics, "whole numbers" are also called the "natural numbers," in that they are REAL, not complex, and only POSITIVE INTEGERS that do not include fractions or zero.
That is to say, this "thing" is clearly just a simple and crude "find me the square of a number" type calculator or math aid, and it is something that has been, "very likely," around for centuries. Anyone with even a simple math background could easily see that it works along the same lines as a "look up table" for TRIG functions, or even a very basic form of "Slide Rule." After all, we only have to go back fifty to sixty years to get where finding roots and squares was no simple task to be punched out on a calculator or computer.
For this simple math aid, it appears as though Mr. Gann, or "someone," apparently re-named it as a calculator and the "Square of Nine" based on the single fact that the inner most area of it, the center, "appears" to be a "square" with the numbers one (1) through nine (9) enclosed by it.
While that is true about the 0-9 numbers for the inner most square, that number nine in the corner of the first, inner most, square is simply showing the "answer" for the question: "find me the square of three (3)...or the square root of 81."
As you can see, 1^1=1 and is in the exact center. Then 4^2=16, which is an even number and placed along the "even answer line" going up, at about a 45 degree angle, from the center, and the number 1. GET IT NOW? Ok, then you can also see that the "answer line" for the odd "squares" is running down at "about" a 45 degree angle from center.
NOW you get it right? Ok, 1^1, 3^2=9, 5^2=25, 7^=49 and etc. going DOWN,
and at about 45 degrees, with 4^2=16, 6^2=36, 8^2=64, 10^2=100 and so on going UP, and also at about 45 degrees.
IN addition, this simple, and crude, calculator will also find the "approximate" squares of numbers that are not just whole numbers--like in not just the so-called "natural numbers" (1-2-3-4-5-6-7-8-9-10-11 etc.)! For example, if you start at the number sixty-four, for the square of eight of course (8^2), in the upper right corner of the 3rd "spiral--and 4th inner square from center--and move around clock wise toward the number 81 (square of nine or 9^2), you will pass by the number 73 in the bottom right corner of the 3rd spiral...see it?
Since that corner is 1/2 way between the square for #8 and the square for #9, we can assume that this is the answer for the square of the number 8.5 (8 1/2) right? Ok, if we check the actual answer via a electronic calculator we get 8.5^2= 72.25.
OK, NOW you GET IT RIGHT? Good!
As you can see for yourself, there is nothing magic about this "simple" math aid, or "old time and crude calculator," and those who make it out to be some kind of treasure map to a chest of pirates gold will never find it because: that gold is not on "land" and they don't have all their oars in the water...so to speak!
Now, also let me say that, eventhough, the underlying basis of this SPIRAL CALCULATOR, AKA SQ-9, is nothing more than a simple short-cut to finding squares and roots of squares, used in reverse, I can see VERY CLEARLY how Mr. Gann, or someone, COULD have used this for stock market trading...IF IT WAS APPLIED CORRECTLY, eventhough, I fail to see where it has any validity in referenced to commodities trading.
While my goal here is not to just rip this whole "thesis" to shreds, let me also "debunk" the "widely held idea" that those numbers inside the squares represent time periods and are: the key to unlocking it's magic.
Hogwash! While this whole mess could be written off as just another one of Mr. Gann's "Squares," since his BASIC THESIS is price will "square with" (balance) time where # days, # weeks, # months, or # years hits # points on the 45 degree angle (diagonal) of A SQUARE.
The only difference here between his "visual squares" and this "calculator" would be that "all numbers" (odd or even) SQUARE along a single "diagonal" (a 45 degree angle starting at a single high or low CIT point), for his GRAPHICAL SQUARES, but "square" along different ends of a 45 degree angle for this "calculator" or "look up table. That is to say, for this calculator we start at the center and fan out in opposite directions from there...with the even number "squaring" line going up and the odd number "squaring" line going down. Check the chart again! See what I mean?
No matter which method you used, "a number calculator" or "visual geometric square," you would get the same answer, and that answer would be "price squares to it's time," in days, weeks, months, or years, ALONG the 45 degree angle...or one of two 45 degree angles in the case of that calculator.
OF course, when using the "Visual, or "Geometric," angles the answer is only valid if the chart is constructed in the correct GANN SCALE...or at least the angles are placed on the "visual chart" in relation to the "correct scale."
GET IT? OK, good! "To bad that's all wrong"!
Well, it's not that my explanation is wrong, because it is not, BUT the real world truth here is that for this SQ. of 9 calculator those NUMBERS only represent price, or index value, and none of THEM point to any "time period," OR any "angle" that relates to any time period...end of story.
STOP RIGHT HERE and READ THAT LAST SENTENCE of the PARAGRAPH above AGAIN!
While there is a "time variable" directly associated with this chart or calculator, that is part of my "revelation" and something that I will not give away for free, eventhough, it will be available in the near future as explained in some paragraphs below.
SO, does this mean we cannot use the SQ-9 "method" to find any support or resistance that is "more probable than random"?
As I said before, we do use this method for our Gann analysis...except that for our intermediate term analysis we "project" just a PRICE LINE of support or resistance, AND NOT a "point" as based on PRICE "AND" TIME.
This SIMPLE S/R LINE METHOD, for applying the SQ-9 method, will locate ONLY a horizonal "PRICE LINE," of S/R, and is explained in more detail and fully illustrated at the NEXT LINK---a "free-bee" taken from our Ebook.
<MEGA EXAMPLE: GANN SQ-9 "Simple Method" to find S/R LINES">
MOVING ON NOW, lets get past the fact that the UNDERLYING CONCEPT of the so-called SQUARE OF NINE--as popularized throughout the Internet World and by many, many, books and essays that attempt to legitimize it-- is nearly without merit.
By using a little intuitive thinking we can break the GANN SQUARING METHOD, aka SQ-9, into three different methods and then USE the TWO that do make SOME SENSE, and "seem to have" some real world chart support based on the "assumption" that it has become another one of those "self-fulfilling prophecies"...that seem to have become quite prevalent in stock and commodity trading.
Method number one of those three total is the SIMPLE S/R LINE METHOD which we alluded to above, and method number three is a rather complex and draw out method to PROJECT one--or more--"probable" QUADRATIC CURVES for the LONGER TERM TRENDS, ONLY!
THAT METHOD, # 3, "will be" explained only in the next addition to the E-book...as we stated above.
AS for method #2, of 3 total, this is the ONE we DO NOT USE, since it can actually be one of "many different methods"--PROPOSED by everyone but Mr. Gann--for locating "a" FUTURE POINT IN PRICE "AND" TIME...as based on the mathematical SQUARING of an "existing"--and prior--point in time.
In addition, I'll point out here that a lot of those con-coctions I see for locating "future time points," of S/R, are now based on the TOTALLY BOGUS concept of converting TIME into ANGLES before making those complex calculations...or pin pointing a certain row and column in a look-up table that then converts angles back into TIME.
NEEDLESS to say, since the SIMPLE method will locate the same S/R "LINES" regardless of the TIME element, and is of course SIMPLE, then we "suspect" that this method at least this puts us on the same page as nearly all Gann Traders "playing around" with this method; where as, we "suspect" that the "time element" is a LOT MORE obscure and unreliable.
For our web service, which does not support "commodities" trading, per se', and for the purpose of this introduction, we will ASSUME that the so-called "Square of Nine," that is popular with some traders and many web searches, are one and the same "thing" as the SPIRAL CHART...as displayed and discussed, vaguely, in Mr. Gann's Master Stock Course.
In addition, we will also assume that it is the same thing as the so-called Natural Squares Calculator...which seems to be just a different name given to the same process by a few Gann sites.
While we currently use only the SIMPLE S/R LINE METHOD for our Gann Analysis, we are also in the process of working on and REVEALING a "very intuitive" method, #2 of 3 referenced to above, for locating POINTS of PRICE and TIME along some LONG TERM QUADRATIC curves, a PARABOLA, that "seem to" locate points that "hit," or TURN, a stock chart's price line "more often than random." Currently, we are already TESTING this "thesis" on some real world charts and the "prognosis" looks to be fair to good.
IF you have not read "THE EVIDENCE" as to my basis, or non basis, for the underlying concept for the SQ-9, then I urge you to at least "look it over" for now. However, keep in mind that the so called "last shoe to drop" on this subject is still in writing. When it is finished, sometime between early February and the end of May 2008, we think, it will be added as a final appendix to the Gann section of our Pattern Traders Ebook (1st edition 1/2006).
WHAT SHOE is that you might ask? Well, it is that CORRECT way to apply this METHOD #2, of Mr. GANN's MATHEMATICAL SQUARING METHOD, to stock trading; eventhough, the actual "real world" method has no need of any Spiral Chart or so-called "Square of 9."
As a matter of fact, while we would not resort to any look up table or crude hand drawn chart when we have modern day spreadsheets and electronic calculators to do the calculations for us, the REAL #2 METHOD is actually so simple you can just do it in your head...IF you can handle even simple math that way.
OH, and by the way, anyone who does purchased the E-book , from 10/1/07 forward, will get this "future" appendix for free, by email broadcast or per request, as soon a it is finished.
<SQ-9 or SPIRAL CHART: powerful evidence refutes it's basis>
SCROLL DOWN TO CONTINUE
IF you have already studied the UNDERLYING BASIS for the SQ-9 before, and you still have some hair left, then this short graphic below, and the short set of comments for it, may be all you need to get up to speed on this "highly dubious," and mostly "unreliable," method for locating a future change in trend for chart price, a CIT, or even a "point" on the non-existant "parabolic trend curve" that it actually seeks.
IF NOT detailed enough for you, then I "strongly" suggest you use our E-book as the next step; however, you can also go back to the last Gann Menu and select the "detailed" introduction for this method...but carry a lunch as you'll need it.
SEE SELECTION #14 on that menu if you want to go "real deep" into the SQ-9,-- and see the REAL GANN PYRAMID --but note that it is limited to subscribers only.
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