The trading method I have developed is based on two of Gann’s most basic tools—his 1×1 or 45 degree angle and his trend line indicator. These are the most common questions about the Fan Gun indicator. This trading system is a complex strategy that uses diagonal support and resistance levels. Unlike the traditional horizontal levels, Gann angles are mathematically calculated based on price, time and price range of the market. If you want to learn how to trade correctly according to Gann’s strategy, take a few minutes to read this article.

Originally, Gann used the three following trading days to determine a support point, but more recently, it has been switched to two days (Krausz, 1998). Likewise, a resistance point is defined as any high bar during an uptrend that is followed by two successive bars with lower lows. Also, Gann predicted the start of World War I in 1914 and the stock market frenzy that followed. In March 1918, he predicted the end of the war and Kaiser Wilhelm’s abdication.

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On the Tradingview platform, you can find the Trend Angle tool in the left side panel. The main advantage to the system is you will never miss a major move. You may miss the first few days and you may overstay the move and give back some of the last part, but you will catch the major portion of it.

Gann indicators, most notably Gann angles, are trading techniques developed by W.D. Gann fans are a popular technical analysis tool used by traders to predict price changes by analyzing the geometric and cyclical nature of the market. The Gann fan tool consists of a series of lines called Gann angles, which are drawn at specific angles based on price-to-time moves.

Understanding Gann Indicators

The allusion to Jehovah as “the Lost Word” indicates that Gann belonged to the Royal Arch Masons. Gann was a member of Commonwealth-Stella Lodge No. 409, Free & Accepted Masons, New York City. Nonetheless, his involvement with the masons was not the key to his Wall Street success. Becoming a mason on December 15, 1922, Gann was “promoted” to the rank of Master Mason on March 27, 1923. According to the scholar himself, he made his “biggest discovery” in New York in 1908. Whatever that secret was, Gann discovered it long before joining the Masonic community.

Gann indicators, most notably Gann angles, are trading techniques developed by W.D. They are widely seen as innovative and still studied and used by traders today. Gann used angles and various geometric constructions to divide time and price into proportionate parts. Gann indicators are often used to predict areas of support and resistance, key tops and bottoms, and future price moves.

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This allows the analyst to forecast where the price is going to be on a particular date in the future. This timing indicator works better on longer-term charts, such as monthly or weekly charts; this is because the daily charts often have too many tops, bottoms, and ranges to analyze. Like price action, these timing tools tend to work better when “clustered” with other time indicators. A Gann angle is a diagonal line that moves at a uniform rate of speed.

If the price crosses the Gann line, there is a reversal is underway. If the price goes down to the rising Gann line, time and price reach a balance. Further intersections of the Gann https://traderoom.info/what-is-a-moving-average-indicator/ line signals that the balance has been disrupted. Not only do the angles show support and resistance, but they also give the analyst a clue as to the strength of the market.

Windsor Books, The W D Gann Method Of Trading

Furthermore, he predicted a positive tendency in the market in 1921 and the end of the bullish trend on September 3, 1929. During the 20s and 30s, wheat and cotton prices didn’t change much. In 1935, Gann profited from 83 out of his 98 trades on cotton, grain, and rubber.

• Take profit after breaking the price of the 1/1 line below 20 points.
• The basic concept is to expect a change in direction when the market has reached an equal unit of time and price up or down.
• These angles are often compared to trendlines, but many people are unaware that they are not the same thing.

The only indicator that you will need is the Fan Gun graphical tool, which most trading platforms have. This indicator is unique in that it draws diagonal support and resistance levels from different angles. If a market is moving down, the trend line indicator is drawn so as to connect each new low. The trend line indicator does not move up until there has been three days of higher highs. A swing top is formed when the market has been advancing and then makes lower lows for three days. The only exception to this rule occurs when the third day happens to be a reversal day.

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He believed that angles could be used to identify key levels of support and resistance,… Angled lines are drawn above and below a central 45-degree line to help determine trend direction and strength. Gann fans are drawn from a central 45-degree angle line that extends out from a specified trend reversal level. Traders will draw a Gann fan at a reversal point to see support and resistance levels extended into the future. These tools are based on mathematical calculations and relationships between price, volume, and time.