W.D. Gann Trading Methods >>

Gann Line

Gann Line & Gann angle is the geometric correlation between time and price. The important factor is the relationship and scales between the 2 axes. W.D. Gann called it squared charts. Gann use 1/8 point scale in stocks. It depends on how fast the stock move and the price of the stock. Usually I would use 1 point for 1 day for fast moving stocks over $100, 1/2 point for $50 - $100, 1/4 point per day for under $50 stocks. But this can be very confusing and giving too many outcome probabilities. I don't do the scale anymore, instead I rely on computer software to identify the proper scale. I work backwards by putting a lot of gann lines on the gann chart and visually identify which scale to use. See charts below.

Gann line - 1 x 1 angles move 1 point per 1 time unit is 45° angle.
1 x 2 angles move up 1 point per 2 time units and so on for 1 x 3, 1 x 4, 1 x 8...,and move down 2 x 1, 3 x 1, 4 x 1, 8 x 1...

>> Important note:

Which gann line is the most important line?

The 45° angle 1 x 1 line is the most important support and resistance line. 1 x 2, 1 x 3 and 1 x 4 can be use to judge the momentum of the move (how fast is the move?). Obviously the same for 2 x 1, 3 x 1, 4 x 1 ...

"When any stock breaks under the 45 degree angle on a daily chart, weekly or monthly, puts it in a very weak position and indicates a decline to the next angle. However when a stock can regain the 45 degree angle, it is in a strong position..." W.D. Gann.

Angles draw from major highs and lows are more important gann lines.

With the help of computer software - I use Ganntrader, there are other softwares around, it is a lot easier to decide what scale to use and which is the most important gann line. I usually apply the square of 90 and visually determine which scale would give me the best fit and more resistance and support producing turning points. This is important because there are so many scales that you can use and after so many years the market and currency may have changed from W.D. Gann's century. While applying various gann lines from a few scales, you can see which fits the best, hence decide on the importance of angles.

How to find the best scale in a gann chart?

This chart is General Electric (GE) 5 trading days chart, GannTrader software at start up give me a 1x1=0.125 by default. Since a stock cannot be so strong below the 1x1 angle (45 degree angle), we have to change the scale to get a better fit.

Let's try a smaller 1x1 scale, say 0.1. We find a better fit 1x2 gann angle and looking good with a few gann angles getting support.

Let's try 1x1=0.05, the 1x1 lines looks better but the 1x2 lines are getting apart.

Let's move back a bit, say 0.07 and after trying 0.06 and 0.08 as well, I see a much beter fit with 1x1=0.07. Then from now I will use 0.07 as the 1x1 scale for the 5 trading days GE chart.

Again, you can't trade by gann lines alone but it's a good starting point to look for a trade setup with other confirmations: volume, patterns, momentum, time cycles, etc.

For weekly and monthly charts, there is also an important gann angle called zero angle, drawing from important highs and lows in time and move down to the zero price. I always keep zero angle monthly charts available for my trades. I have made many promise to myself to keep weekly and monthly charts up to date, because I am also too lazy to keep up and only regretted after the big gap up open and market trade suspended for 3 sections of 15 minutes.

This GE weekly chart looks pretty good in a few points, but I have removed many other angles which doesn't fit, in order to show you a better example of zero angle. So the actually chart in reality is more complex. When in real trading you can anticipate a change in trend in those time zone with a white arrow.

"The angles on the monthly and weekly charts are, of course, of greater importance than those on the daily charts, because the daily trend can change quite often, while only major changes are show according to the angles on the monthly high and low and weekly high and low charts..." W.D. Gann.

The true trend line... is important as the name imply, it is a true important trend line.

In this S&P500 5-trading day chart shows how a true trend line is being draw, you can see some good support and resistance happened from the true trend line angles.

All charts in this site are random drawing so as to show you the real life situation while using W.D. Gann trading method.

Gann Line Angles interpretation

Gann Line Fans - W D Gann postulated a theory that there exists a relationship between price and time that finds balance at specific points in time. The basic premise is that the market will make tops at multiples of the all time low and the timing will be quantifiable from the value of the all time low. It also applies to a lessor extent to major lows and highs.

Gann Line - "Gann" lines are to be interpreted as progressive support and/or progressive resistance and run horizontal. Their situation is calculated, as the "price area" is thus divided, the difference according to amount of the two last opposite bend points, by the number of "eight". It is to be lifted out that "Gann worked ' also with other one," suitable "partitionings.

Gann Line Application in E-mini - There is not much written about median lines (usually called "Andrews Pitchfork" in most charting software) and not many traders get to the point of being able to use median lines effectively. Surprisingly, even though these lines are based on the basic laws of physics, those with higher education and training in physics and mathematics "get a headache" (and this is an actual quote) looking at median line charts...

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Home - W.D. Gann
WD Gann trading techniques and setups made simple

W.D. Gann Time Cycles
How to use gann time angles and squares in trading? Square of 52 in weekly charts, Square 144 in yearly charts, Square of 90,180 and 360 in daily charts. Which have the highest probability? When should you not to trust them?

W.D. Gann Line
Gann angles - How to apply to a chart? When to consider in trading? Which scale to use?

W.D. Gann Price Squares
Price Squares are always a confusing topic for most gann students. When W.D. Gann mention cycles, he means squares - a normal square with equal 4 sizes

W.D. Gann Division
Which division does it base on? What are the probabilities?

W.D. Gann Square of 9
How does the gann wheel works?

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