We have applied the Gann Fan Indicator to the EUR/USD daily price chart. The unique angles provide more accurate and reliable information about longer-term trends. This article represents the opinion of the Companies operating under the FXOpen brand only.

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. Gann fans are a form of technical analysis based on the idea that the market is geometric and cyclical in nature.

Live prices

But we recommend not to fall below the hourly chart in order to be able to choose significant highs and lows of the price. Using a Fibonacci as a confluence with Gann fan angles will help us find out strong angles. For example, draw Gann’s angle from swing low to swing high.

• It is suggested that a crossing of the Gann Lines can indicate a breaking of the prevailing trend.
• IC Markets are my top choice as I find they have tight spreads, low commission fees, quick execution speeds and excellent customer support.
• We see that the price doesn’t break the 2×1 level, and actually bounces downwards from it.
• When price stays above the 45 degree line on an uptrend the sentiment is considered bullish.
• Take profit after breaking the price of the 1/1 line below 20 points.

When price stays above the 45 degree line on an uptrend the sentiment is considered bullish. The tool can be used to help identify trends and forecast future prices. On https://traderoom.info/10-best-node-js-image-manipulation-libraries-in/ an uptrend, lines above the central 45-degree, are typically regarded as resistance lines. Lines below the 45 degree line are typically considered as support lines.

How do I use Gann Fan in TradingView?

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.

If both trend line and fan angle are intersecting at some point, then that point can act as a strong support and resistance level in the future but before the breakout of the trend line. Upward angles identify support levels and downward angles predict resistance levels. The best thing about Gann fan angles, you can predict the upcoming support or resistance level with respect to time.

Support

All of Gann’s techniques require equal time and price intervals. In other words, a rise of a 1/1 would imply a 45-degree angle. Time is an issue in trading and besides Gann, who was the first one to put the two together, Elliott Waves Theory offers the possibility to incorporate time into any analysis. As we can see from the image below, graphically, the Fan of Gann consists of a series of lines that open “fan” (precisely) starting from a point (which we will see can be a low, a high or zero). In a little while, we will see that these lines from a technical point of view will become our support and resistance levels. They are also distributed according to a precise angle (the angles or “Fan of Gann”), and this too takes on great importance, as we are about to see.

The calculation method of such a square (the search for the equality of price and time) is called “squaring” by the author. The next step is to select the key high or low price on the chart from which you will draw the Fan Gunn corners. For example, you select the maximum, as in the figure above, then you use the Trend Angle tool and draw an ideal angle of 45 degrees. In this selection, there is a showing of the use of angles to measure the passage of time and price. In the first chart, the 30 minute chart, there is 40 units of time, and 40 units of price.

Limitations of Gann Indicators

Click To Tweet If you can spot a pattern or any other geometric shape in a chart, there is a high probability you can spot them at the Gann fan angles. Also, read my personal trading plan reviewed by Kim Krompass. Our team at Trading Strategy Guides has developed the best Gann fan trading strategy. It can be applied to all markets because according to the Gann theory, financial markets move as a result of human behavior. In other words, history is a good predictor of future price action.

The angle that is correspondent with this ratio spans to the end of the enclosed trend. In the next chart, the four minute chart, there is 40 units… In the previous sections I’ve provided some examples of how Gann fans can be used to interpret price movement, market sentiment and identifying potential reversals. Each of the Fan lines can be interpreted by the trader as potential support or resistance area depending on where in the fan price is trading. One of the main goals of Gann Fans is to measure the slope or degree of the ascent or descent of price movement using the Gann angles to predict future price movement. Geometrically in a line graph, it will follow a slope of 45°.

How to Calculate Gann Fans?

Now, all you have to do is simply place the Gann fan indicator on the chart. Make sure it overlays on top of the 45-degree line you previously drew. If you have been following all of these steps, all of the other Gann fan angles should comply with the Gann rules. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition.