The Successful Trading Habits of WD Gann

Dale Gillham, Chief Analyst and Head Trainer of Wealth Within

By Dale Gillham |

For those who don’t know, WD Gann lived from 1878 to 1955 and was arguably one of the best traders who has ever lived. Many traders have attempted to study his work, although I believe the majority never really gain his true wisdom given that his writings are often not easy to follow. 

The successful trading habits of W.D. Gann

I believe Gann wanted traders to earn the right to be successful, which means they need to put in the time and effort to understand his teachings and not just be spoon feed. The first reason for this is that to be successful in the markets you really do need to put in the effort. 

Secondly, he did not want to give aspiring traders a free ride because putting in the time and effort would surely see some fail. I tend to agree with this philosophy given that on a regular occurrence, I find traders believe that by reading books or watching a few videos they will magically become a trader. 

The market does not care who you are or what you do, it just takes your money if you do not respect it. Therefore, another reason why I say Gann believed that you must earn the right to be a successful trader is partly due to the following statement in his book, the Truth of the Stock Tape, which was released in 1923.

Gann states that you need to: “Have a well-earned plan before you start trading, then follow that plan, as the architect does in building a house or the engineer does in constructing a bridge.”

Having a well-earned plan means that you need to put in the time and effort to create your own plan, firstly by educating yourself and secondly by testing and revising your strategies and tools until, as Gann states, you have a well-earned profitable trading plan before you start trading.

What you are doing, in essence, is creating the belief in yourself and your tools that you can and will be successful in the stock market. In my experience, and that of our clients who have completed our education is that by implementing the successful trading habits of W.D. Gann, you will be more profitable over time. Failure to put in the effort will result in you not trusting yourself or your trading plan, which will ultimately lead to poor performance.

Gann also stated: “The man who changes his ideas or his plan, which is based on something practical, for no other reason than that he hopes or fears the market will do something different, will never make a success.” While these words were published in Gann’s book in 1923, they are just as relevant today as they were then. 

Of the many studies that have been undertaken on traders, there is a constant theme that remains true: those that use trading plans are far more profitable, but yet so few have one written down or if they do, they rarely use it consistently. 

Most traders, who enquire about our education and how we can assist them, cannot properly articulate their trading plan or strategy. Unfortunately, we find they do exactly what Gann talks about and that is to trade on hope and fear and neither is a good strategy when trading any market, which is why so many traders struggle.

Gann communicated many rules and wise words that traders and investors should heed. One of his best is this: “If you cannot follow a rule, do not begin speculating or investing, as you are sure to lose. “

So, let me ask you: firstly, if you are investing your hard earned money in the market, do you have a set of rules that you know you can profit from consistently and secondly do you follow your rules consistently. If you answered no to either of these questions, then ask yourself why? Is it because as Gann states “you do not have a well-earned plan before you start trading”. If not, I encourage you to develop the successful trading habits of W.D. Gann, as you will make a significant difference to your bottom line.

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