DECODING GANN FAN: HOW TO USE IT IN TRADING
👋 Hello, Forex traders! In this post we are going to talk about Gann angles, which many of you know as the Gann Fan. Essentially, they are the same thing. We will learn how to build these angles, what are their essence, and most importantly - how we can apply Gann's Fan in practice in our trading.
What Are Gunn Angles ? 📢
Gann Angles, or Gann Fan, is one of the standard tools present by default in TradingView. The Gann fan indicator includes a sequence of straight lines drawn at different angles with the base at the pivot point. The resulting picture resembles a fan, from which the name of the tool was derived. Each of these lines indicates possible support or resistance levels as the price approaches it.
William Gunn notes that his indicator cannot 100% predict and that the market always will change the trend direction. It only shows the moments when there is the highest probability of market reversal or consolidation.
Widespread use of Gann angles as part of analytical work in the market is one of the most popular and, at the same time, complex methods of technical analysis. Nevertheless, the skills of structural assessment and forecasting of currency market dynamics, based on the theory of William Gunn's angles are in demand in the tools in the arsenal of every professional trader. It is worth mentioning that Gann angles are often confused with trend lines, which is not true, despite the characteristic similarity.
The key difference between the Gann line and the trend line is that the Gann line is characterized by dynamic features that allow it to move both along the x-axis (vertical axis) and y-axis (horizontal axis), which opens up wider functionality for the trader. For example, it is possible to analyze an asset by plotting it in charts, which makes it possible to determine the angles of fluctuations of a market instrument and, subsequently, to mark the limits of its dynamics.
The key assumptions of market dynamics, within the framework of the Gann theory, are the following:
• Price, time and range of market fluctuations;
• Geometric structure of the currency market, the analysis of which allows to predict the factors of further formation of its dynamics;
• The fundamentally cyclical nature of market dynamics.
Gann compared the nature of the market with the nature of human beings, analyzing the past and present of which, one can make a series of essential conclusions regarding its future.
Gann Fan In Forex Trading 📊
Now it's time to tell you how Gann angles are applied in practice. The peculiarity of applying Gann's theory in practice is to focus on two, classic for his theory, models, designed to help the trader in predicting market movements:
• The research time model, which implies fixing cyclically repeating dates;
• The price range model, which includes support and resistance lines, as well as pivot points.
Since such techniques require deep knowledge and experience from a trader, let us note the most essential technical aspects that should be kept in mind first of all.
A trader should decide on the models that she/he will use when analyzing the market with the help of Gann fan. The most common of them are models 1, 1×2 and 2x1, each of which implies a certain slope of the lines. However, there are many more among these models and, accordingly, angles:
1 × 1 - 45 degrees
1 × 2 - 63.75 degrees
1 × 3 - 71.25 degrees
1 × 4 - 75 degrees
1 × 8 - 82.5 degrees
2 × 1 - 26.25 degrees
4 × 1 - 15 degrees
8 × 1 - 1.5 degrees
There is nothing complicated about these parameters: the first one corresponds to a unit of time, the second one to a unit of price, and the formula, accordingly, shows the relation between price and time interval.
Of particular note is the 45 degree model, also known as 1×1.
According to Gann, the 1×1 line represents the long-term trend line: up or down. In this model, the disposition of price above the ascending line indicates a bullish trend and below the descending line a bearish trend respectively. The disposition of the price crossing the line indicates an anticipated trend reversal. It is important to emphasize that the 1:1 line represents the balance between price and time ranges. It is not uncommon in the market that when price approaches the line, time and price are balanced.
How To Draw Gann Angles On A Chart? 📈📉
Let's try to apply the Gann Fan in practice. Gann angles are drawn from the top of the trend. In this case, it is the lowest point. We draw a line 1x1 at an angle of 45 degrees. How to determine the angle of 45 degrees? Very simple. You can use the Trend Angle insturment to calculate 45 degrees. Under this line you will immediately begin to touch the trend. It is almost impossible to make a mistake with the construction of the angle. All other lines are pulled up automatically.
Note! Once built, this fan has a large number of points of touch and points of touch with the trend in the future. In other words, these angles can be used as an additional tool for technical analysis in the form of support and resistance levels. We strongly do not recommend trading using only one of these tools.
Also, the Gann theory has a number of similarities with fan lines based on Fibo coefficients. In light of the market moving up or down, the angles transform within the existing trend, forming resistance and support levels. As you may have already realized, this tool is not associated with any specific trading strategies, but it can serve as a good additional tool to identify support/resistance levels as well as trend reversal points.
Another key is to look for time and price discrepancies. Price will always tend towards the mean line.
In summary, Gann angles, also known as the Gann Fan, can be found on TradingView and are a standard tool frequently utilized by Forex traders. They are comprised of a sequence of straight lines that derive from a pivot point and form a shape resembling a fan. Each line indicates potential support or resistance levels as the price approaches them. Gann angles are not deterministic, and their purpose is to show when there's a high probability of market reversal or consolidation.
Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment
What Are Gunn Angles ? 📢
Gann Angles, or Gann Fan, is one of the standard tools present by default in TradingView. The Gann fan indicator includes a sequence of straight lines drawn at different angles with the base at the pivot point. The resulting picture resembles a fan, from which the name of the tool was derived. Each of these lines indicates possible support or resistance levels as the price approaches it.
William Gunn notes that his indicator cannot 100% predict and that the market always will change the trend direction. It only shows the moments when there is the highest probability of market reversal or consolidation.
Widespread use of Gann angles as part of analytical work in the market is one of the most popular and, at the same time, complex methods of technical analysis. Nevertheless, the skills of structural assessment and forecasting of currency market dynamics, based on the theory of William Gunn's angles are in demand in the tools in the arsenal of every professional trader. It is worth mentioning that Gann angles are often confused with trend lines, which is not true, despite the characteristic similarity.
The key difference between the Gann line and the trend line is that the Gann line is characterized by dynamic features that allow it to move both along the x-axis (vertical axis) and y-axis (horizontal axis), which opens up wider functionality for the trader. For example, it is possible to analyze an asset by plotting it in charts, which makes it possible to determine the angles of fluctuations of a market instrument and, subsequently, to mark the limits of its dynamics.
The key assumptions of market dynamics, within the framework of the Gann theory, are the following:
• Price, time and range of market fluctuations;
• Geometric structure of the currency market, the analysis of which allows to predict the factors of further formation of its dynamics;
• The fundamentally cyclical nature of market dynamics.
Gann compared the nature of the market with the nature of human beings, analyzing the past and present of which, one can make a series of essential conclusions regarding its future.
Gann Fan In Forex Trading 📊
Now it's time to tell you how Gann angles are applied in practice. The peculiarity of applying Gann's theory in practice is to focus on two, classic for his theory, models, designed to help the trader in predicting market movements:
• The research time model, which implies fixing cyclically repeating dates;
• The price range model, which includes support and resistance lines, as well as pivot points.
Since such techniques require deep knowledge and experience from a trader, let us note the most essential technical aspects that should be kept in mind first of all.
A trader should decide on the models that she/he will use when analyzing the market with the help of Gann fan. The most common of them are models 1, 1×2 and 2x1, each of which implies a certain slope of the lines. However, there are many more among these models and, accordingly, angles:
1 × 1 - 45 degrees
1 × 2 - 63.75 degrees
1 × 3 - 71.25 degrees
1 × 4 - 75 degrees
1 × 8 - 82.5 degrees
2 × 1 - 26.25 degrees
4 × 1 - 15 degrees
8 × 1 - 1.5 degrees
There is nothing complicated about these parameters: the first one corresponds to a unit of time, the second one to a unit of price, and the formula, accordingly, shows the relation between price and time interval.
Of particular note is the 45 degree model, also known as 1×1.
According to Gann, the 1×1 line represents the long-term trend line: up or down. In this model, the disposition of price above the ascending line indicates a bullish trend and below the descending line a bearish trend respectively. The disposition of the price crossing the line indicates an anticipated trend reversal. It is important to emphasize that the 1:1 line represents the balance between price and time ranges. It is not uncommon in the market that when price approaches the line, time and price are balanced.
How To Draw Gann Angles On A Chart? 📈📉
Let's try to apply the Gann Fan in practice. Gann angles are drawn from the top of the trend. In this case, it is the lowest point. We draw a line 1x1 at an angle of 45 degrees. How to determine the angle of 45 degrees? Very simple. You can use the Trend Angle insturment to calculate 45 degrees. Under this line you will immediately begin to touch the trend. It is almost impossible to make a mistake with the construction of the angle. All other lines are pulled up automatically.
Note! Once built, this fan has a large number of points of touch and points of touch with the trend in the future. In other words, these angles can be used as an additional tool for technical analysis in the form of support and resistance levels. We strongly do not recommend trading using only one of these tools.
Also, the Gann theory has a number of similarities with fan lines based on Fibo coefficients. In light of the market moving up or down, the angles transform within the existing trend, forming resistance and support levels. As you may have already realized, this tool is not associated with any specific trading strategies, but it can serve as a good additional tool to identify support/resistance levels as well as trend reversal points.
Another key is to look for time and price discrepancies. Price will always tend towards the mean line.
In summary, Gann angles, also known as the Gann Fan, can be found on TradingView and are a standard tool frequently utilized by Forex traders. They are comprised of a sequence of straight lines that derive from a pivot point and form a shape resembling a fan. Each line indicates potential support or resistance levels as the price approaches them. Gann angles are not deterministic, and their purpose is to show when there's a high probability of market reversal or consolidation.
Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment
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