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One of the best pieces of advice that newcomers to trading often get is to find a mentor who can help them learn the ropes and to study the masters of trading to learn techniques that have proven to be successful in the past.

One of those masters of trading from the past is William Delbert (W.D.) Gann, regarded as one of the pioneers of technical analysis and market behavior. Gann wrote several books on stock and commodity trading and developed the well-known "Gann angles" and "Gann fans." Gann's techniques are sometimes viewed as strange and mysterious, but one of his strongest attributes is that he was always a student of the market, always willing to learn new things. That's one of the characteristics we also try to pass along at our web site, www.TraderEducation.com, which provides complimentary educational resources to traders at all levels of experience.

Gann was born on a farm near Lufkin, Texas, in 1878. His rise to trading fame is a remarkable story. He was the oldest of many children on the farm and did not even finish grade school. Back then, it was not uncommon for the oldest boy to quit school at a relatively young age and stay at home to help out on the farm. However, Gann did not want to be a farmer. He wanted to be a businessman. For a short period of time he worked for a brokerage firm in Texas while attending business school at night. He then set out for New York City in 1903.

In 1919, at the age of 41, Gann quit his job with a stock brokerage and set out on his own. He began publishing a daily market newsletter called the "Supply and Demand Letter." The newsletter covered both stocks and commodities and provided traders with his annual market forecasts. www.TradingEducation.com, also publishes a daily newsletter, a beneficial resource to traders.

In 1924, Gann's first book, Truth of the Stock Tape, was published. A pioneering work on chart reading, it is still regarded as one of the best books ever written on the subject.

Gann's market forecasts during the Roaring 20s were reportedly 85% accurate. The stock market in the 1920s was skyrocketing, but Gann didn't think the bull run would last. In his forecast for 1929, Gann predicted the stock market would hit new highs until early April, experience a sharp break, and then resume with new highs until early September. Then it would top and afterward would come the biggest stock market crash in history. Anyone associated with trading is well aware of what happened to the stock market in October and the years following that crash. To keep yourself up to date about today's market happenings visit www.TraderNews.com.

After about 20 years in New York City, Gann moved to Miami, Florida, for reasons of both health and personal preference. His How to Make Profits in Commodities book came out shortly thereafter.

Following are the general tenets of Gann's trading philosophies and methods. I won't go into great detail on his specific methods in this short feature. If you want to learn more about Gann's specific trading methods, I suggest you read his books or books written about Gann, certainly one of the more interesting characters in trading history. He didn't have the benefit of computers that dominate today's market research or products like VantagePoint Intermarket Analysis Software ( www.tradertech.com) to analyze markets, but his mind conceived and developed creative concepts that are still used in trading today.

Gann designed several unique techniques for studying price charts. His main theory uses three parameters to project changes in price trend and market direction: Pattern, Price and Time. These parameters can exert their influence individually, with one or the other being more determinate under different conditions. However, they are best applied in a balanced manner. The basic idea is that specific geometric price patterns and angles have special properties that can be used to predict future prices.

He believed the markets are geometric in design and in function, and they follow geometric laws when they're charted. All of Gann's techniques require that equal time and price intervals be used on the charts. Thus, a rise of one price unit over one period of time (1 x 1) will always equal a 45-degree angle. Gann believed that the ideal balance between time and price exists when prices rise or fall at a 45-degree angle relative to the time axis. This is called a 1 x 1 angle.

Gann angles are drawn between a significant bottom and top (or vice versa) at various angles. Deemed the most important by Gann, the 1 x 1 trend line signifies a bull market if prices are above the trend line, or a bear market if below the trend line. Gann believed a 1 x 1 trend line provides major support during an uptrend; when the trend line is broken, it signifies a major reversal in the trend. Gann identified nine significant angles, with the 1 x 1 being the most important.

Gann said each of his predetermined angles provide support and resistance depending on the trend. For example, during an uptrend the 1 x 1 angle tends to provide major support. A major reversal is signaled when prices fall below the 1 x 1 angled trend line. Prices should then be expected to fall to the next trend line (the 2 x 1 angle). As one angle is penetrated, expect prices to move and consolidate at the next Gann angle.

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Prices have a way of repeating themselves -- or "vibrating," as Gann put it. One can think of vibration in terms of periodic oscillation, the theory of waves, or cycles, as in cycle theory. (For more prices, quotes, and news visit www.TraderQuotes.com)

"Through the law of vibration, every stock and commodity in the market place moves in its own distinctive sphere of activities, as to intensity, volume and direction," Gann explained. "All of the essential qualities of its evolution are characterized in its own rate of vibration. Stocks and commodities, like atoms, are really centers of energy, and, therefore, they are controlled mathematically. They create their own field of action and power -- power to attract and repel, which explains why certain stocks and commodities at times lead the market and turn dead at other times.

"Thus, to speculate scientifically, it is absolutely necessary to follow Natural Law," Gann concluded. "Vibration is fundamental; nothing is exempt from its law. It is universal, therefore, applicable to every class of phenomena on the globe. Thus, I affirm, every class of phenomena, whether in nature or in the markets, must be subject to the universal laws of causation, harmony and vibration."

There is no question that Gann's trading track record in the 1920s was truly remarkable. And his trading methodology certainly has merit. However, I think the most important tenets of Gann's success were stated in a paper published by Gann's grandson. Below are some edited excerpts from that paper:

"Delbert Gann of Lufkin, Texas, started with nothing. He and his family had no money, no education, and no prospects. But less than 40 years after overhearing businessmen talk on railroad cars in Texas, W.D. Gann was known around the world.

"Hard work pays. W.D. Gann rose early, worked late and approached his business with great energy. Virtually all his education was self-administered. This teacher, writer, and prescient forecaster had a third-grade formal education. But he never stopped reading.

"Unconventional thinking may have its merits. W.D. was intellectually curious to an extraordinary degree. He was unafraid of unorthodox ideas, whether in finance or in other areas of life. He wasn't always right -- none of us are -- but he dared to pursue a better idea.

"And, finally, the only lesson for traders I will venture to offer is W.D. Gann never stopped studying the market. Even after his forecasts happened, even after he achieved international acclaim. Although he believed in cycles, he also knew that markets are always changing and that decisions must be made based on today's conditions, not yesterday's."

W.D. Gann's personal characteristics, as related by his grandson, are strikingly similar to two other famous market analysts and traders of Gann's era who are regarded today as trading legends: Jesse Livermore and Richard Wyckoff. But their stories will have to wait until another time.