Documente Academic
Documente Profesional
Documente Cultură
BASIC TECHNIQUES
FIGURE 1: SOYBEANS. This hand-drawn chart of 1948 soybeans depicts W.D. Ganns basic techniques of drawing trendlines.
(Reproduction courtesy of John Wiley & Sons.)
by Brent Aston
Copyright (c) Technical Analysis Inc.
Stocks & Commodities V17:12 (515-520): Applying Gann Angles To Computer Charts by Brent Aston
PATRICK FITZGERALD
Stocks & Commodities V17:12 (515-520): Applying Gann Angles To Computer Charts by Brent Aston
Stocks & Commodities V17:12 (515-520): Applying Gann Angles To Computer Charts by Brent Aston
FIGURE 4: SQUARING CHARTS ON A COMPUTER. Here is a rectangle that has been set
up in preparation to be squared.
FIGURE 5: DRAWING A LINE. Have your computer draw a perfect 45-degree line and place
it on the corner of your Gann square. It usually wont go to the opposite corner correctly
because your chart has yet to be squared.
45 line
(1x1)
FIGURE 6: ADJUSTING THE SCALE. Using your softwares scale adjustment (format price
data in Omega products), adjust the vertical scale until the 45-degree line goes perfectly
from one corner of the box to the opposite corner. When it does, the chart is squared.
Stocks & Commodities V17:12 (515-520): Applying Gann Angles To Computer Charts by Brent Aston
Gann Fan
10 x 10 square
FIGURE 7: GANN FAN PARALLEL TO THE 45-DEGREE ANGLE. Once the scale is adjusted
and the 45-degree line is in place, the Gann fan can be aligned confidently.
fan tool, and find a major pivot point. Apply the Gann fan to the
chart (Figure 8). One or more lines should be seen radiating out
from that point. Click on the fan to open the dialog box and click
on the line that reads format selected Gann fan, then click on
the properties tab. The Gann fan must be set to the appropriate
direction up or down for your chart. If the price goes up
from your chosen pivot, the fan must be set to the up/right
direction; if the price goes down, select down/right. In the time/
price Gann lines part of the dialog box, select only the 1x1 line
to start by clearing the checks from all the other Gann angles.
Next, adjust the programs Gann angle. Beginning in the
same dialog box, find the input box next to the points per bar;
inside this box is a default number. Increase or decrease this
number until the 1x1 Gann fan tool plot is at a 45-degree angle.
The angle of the Gann line should change when the number is
changed. If the 45-degree angle trendline is still on the chart,
the points per bar number can be adjusted until the lines are
parallel (Figure 7). Once the squaring and setting of the points
per bar are complete, the scale and spacing can be changed
without affecting the relative position of the fans, although they
will look different because they are effectively being stretched
to a different scale.
Once youve gotten the right number of points per bar, put
it on the chart using the text tool. Having the number on hand
for reference purposes allows you to add more Gann fans
and use it for future reference. Unfortunately, the pointsper-bar number rarely works on other contracts of the same
or different securities. However, having the number can
speed up the process of zeroing in on the right angles when
putting Gann angles on other charts of the same security.
Gann fans can be duplicated by using the tool that allows
you to add a parallel drawing object. After clicking on any
Gann fan, you may drag it to any location on the screen. The
color and style of various fans can be altered for clarity.
Now, the other Gann angle lines listed in the dialog box
FIGURE 8: SEPTEMBER WHEAT AND GANN FAN. September wheat declines into the
summer but rallies to the Gann fan line as autumn approaches. Once a chart is squared on
your computer, you can put on a Gann fan and turn on or off the angles you want displayed.
PLACEMENT
Gann fans can be started at various points, such as pivot points
and Gann angle intersections, as shown in Figure 9. Gann angle
lines can begin and extend outward to important swing points
where trends change direction.
Some experience using Gann angles may reveal new and
interesting relationships in the data. In Figure 9, which is a chart
of the September Standard & Poors 500 index contract, a Gann
fan angled upward off a previous high helps to define the
support and resistance (point A) of a subsequent movement
into new highs.
After last years pullback in the autumn, the price stayed
within the upper 1x4 and 1x3 angles. Strong trends like this can
be a high percentage move in price and time. Although the red
rectangle was a square when the chart was originally squared,
changing the scale has made it look longer than it is high.
Despite being stretched, the Gann angle lines should line up at
the same points that they did when the chart was still squared.
PRACTICAL APPLICATIONS
Having squared a chart and applied Gann angle lines to it, how
is it used? W.D. Gann was of the opinion that the 45-degree
angle line was the most important line on the chart. He went on
to say that when the 45-degree angle line was broken, the trend
has changed.
Study Figure 10. Almost everything in this chart is keyed off
the angles coming from the peak at the upper left. Each time the
price got near a Gann angle line, it reacted by vibrating around
the Gann angles. Often, the price continues to follow these lines
until market conditions cause the price to break through. That
is often a sustained move.
Stocks & Commodities V17:12 (515-520): Applying Gann Angles To Computer Charts by Brent Aston
CONCLUSION
1x4
1x3
1x1
FIGURE 9: S&P FUTURES. As the Standard & Poors futures contract rebounds off historical highs,
Gann lines from previous pivot points provide support and resistance at a variety of locations.
FIGURE 10: SEPTEMBER WHEAT. Prices move down along a 1x1 angle to point A, where they bounce
Once charts are squared, Gann angles are not upward. Subsequently, angles drawn equidistantly after the low is in place identify that reaction as the
subject to changes in scale. When applied correctly, center of the downtrends progress.
they are certainly not random, and they show
significant areas of support and resistance. Further,
they can be something of a roadmap, showing where and how REFERENCES AND RELATED READING
price action will behave in both price and time.
Hartle, Thom [1999]. Gann Swings And Intraday Trading,
Finally, the process of squaring charts and adding geometric
Technical Analysis of STOCKS & COMMODITIES, Volume
Gann angles can be time-consuming, either by hand or by
17: October.
computer. While applying Gann theory by computer may be Kaufman, P.J. [1998]. The New Commodity Trading Systems
quicker and simpler in some ways, it still takes careful scrutiny
And Methods, 3d edition, John Wiley & Sons.
to use computerized Gann angles to their greatest advantage. Krausz, Robert [1997]. A W.D. Gann Treasure Discovered,
Once done, however, it is best to focus on the basic lines such
Geometric Traders Institute, 1835 US 1 South 119, Suite
as the 1x1 angle and look for price action to track and react to
352, St. Augustine, FL 32086, 512 443-5751, fax 512 443it, no matter if by computer or by hand.
7119, Internet http://www.fibonaccitrader.com
Marisch, Gerald [1990]. The W.D. Gann Method Of Trading,
S&C
Brent Aston is a private trader.
Windsor Books.
Copyright (c) Technical Analysis Inc.