Gann Theory posits that markets follow natural laws, and price movements are not random but can be predicted using mathematical methods. Its essence lies in establishing a strict trading order within seemingly chaotic markets to identify when prices will retrace and to what levels.

However, in actual trading, we often find that predicting price movements is extremely difficult, which is why Gann Theory is not very popular in the market. Nevertheless, as one of the technical analysis frameworks, it still holds some reference value.

For example, Gann Theory attributes losses to three main causes:

a. Over-trading on limited capital, meaning excessively frequent trading.
b. Investors failing to set stop-loss points to control losses.
c. A lack of market knowledge. These points align with the second section of the series course, "Basic Principles of Investment and Common Traits of Losing Traders."

Gann Theory also includes several rules,

such as Gann Lines. The two fundamental components of Gann Lines are price and time. Through geometric tools like the Gann Circle, Gann Spiral Square, Gann Hexagon, and Gann "Wheel Within a Wheel," price and time are perfectly integrated, emphasizing the significance of the number 7 and its multiples.

Another example is the Retracement Rule. Retracement refers to temporary reversals within the primary trend, where 50%, 63%, and 100% retracement levels act as strong support or resistance (these percentages coincide with Fibonacci retracement levels, showing some overlap). In Gann’s price levels, they correspond to geometric angles of 45°, 63°, and 90°, respectively.