📖William Gann

Price and Time Square

🌳 Advanced★★★★☆

When price equals time squared, trend reversal is near.

💬

When price and time are squared, a change in trend is imminent. This mathematical relationship between price movement and time elapsed reveals hidden market structure.

— Tunnel Thru the Air，1927

🏠 Everyday Analogy

Imagine planning a road trip: distance is price and travel time is time. If you know your car’s ideal speed, you can predict where you’ll be at a certain hour. When your actual location and time match that ideal curve, you know you’re “on schedule.” Gann’s Price and Time Square is similar: when market distance (price) and duration (time) line up on a geometric schedule, the market is at a critical decision point.

📖 Core Interpretation

Harmonic relationships between price and time signal trend changes
💎 Key Insight：Gann's "squaring" concept identifies critical turning points. When the price movement (in points) equals the square of the time elapsed (in days, weeks, or months), the market reaches equilibrium and is likely to reverse. This geometric relationship reveals hidden market structure. Traders use this to anticipate major tops and bottoms with remarkable accuracy.

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❓ Why It Matters

Gann found that major tops and bottoms occur when price equals time

🎯 How to Practice

Create price-time charts where one unit of price equals one unit of time

🎙️ Master's Voice

When you make a trade, you are wrong if the trade goes against you. Do not let a small loss become a large one.
Gann was strict about cutting losses. He set stops and stuck to them. A small loss managed immediately is far better than a small loss allowed to become catastrophic.

⚔️ Practical Guide

✅ Decision Checklist

  • Do I have a stop-loss set?
  • Am I letting losses grow?
  • Will I act when my stop is hit?

📋 Action Steps

  1. Set stops on every position
  2. Honor stops without exception
  3. Accept small losses to avoid large ones

🚨 Warning Signs

  • No stop-losses
  • Moving stops to avoid losses
  • Letting small losses become large

⚠️ Common Pitfalls

✕Treating short rebounds as full cycle turns
✕Extrapolating peak conditions indefinitely
✕Becoming maximally defensive near valuation troughs

📚 Case Studies

1
Pre-Crash Market Timing (1929)
Gann applied his Price and Time Square to forecast the 1929 top in U.S. stocks, identifying price-time resistance in major industrials.
✨ Outcome：He reduced long positions before the crash, preserving capital and later buying at lower prices.
2
Post-Crash Accumulation (1932)
After the 1929–1932 bear market, Gann used square-of-9 time and price levels to signal a long-term bottom in the Dow Jones.
✨ Outcome：He accumulated quality stocks near the lows and benefited from the ensuing multi‑year recovery rally.

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