Gann's Law of Vibration
William Delbert Gann (1878 -1955) claimed he had discovered a repeating pattern of time and price that allowed him to predict market tops and bottoms. Collective behavior creates cycles through time, and that is what Mr. Gann called the “Law of Vibration”.
Vibration’s Theory in Financial Trading
If group behavior creates a repeating pattern, by calculating where the pattern appears next, you can make precise predictions regarding where the general market is heading. However, no one has ever precisely explained how Mr. Gann's law of vibration actually works. In this article, we are going to investigate the Vibration theory and its implications in financial trading.
From Pythagoras to Gann -The Ancient Origins of the Vibration’s theory
Vibration theory’s origins go back to the fifth century BC. The school of Pythagoras (570 BC –490 BC) thoroughly examined the natural frequencies of several fundamental systems (strings, vessels, etc.) and concluded that the natural vibration of a system is a pure property. A key feature that appears independently from any excitation. According to Pythagoreanism, everything in nature is connected. The movement of one thing generates harmonic associations (vibrations) to all other things in the system. The key to revealing the truth behind these natural associations is observation and mathematics.
Later, the legendary analyst William Delbert Gann developed the “Law of Vibration” and use it to predict the broad movements of equity and commodity markets. WD Gann was a very successful trader that used mathematics and astrology to investigate key patterns and time cycles due to certain market events.
Natural associations create patterns: “The pattern is said to emerge as a result of discontinuities in the perpetual processes of expansion and contraction within the cosmos. According to Mr. Gurdjieff, the discontinuities are a function of the Law of Seven, and the forces of expansion and contraction are a function of the Law of Three.” {Tony Plummer (2013)}
Read more: A Modern Trading Approach to the Law of Vibration (W.D. Gann)