Gann

Gann is a popular technical analysis tool used by traders and investors to forecast future price movements and timing in financial markets. It is named after its creator, William Delbert Gann, who was a prominent trader in the early 20th century.

Gann believed that price movements in financial markets were not random but followed specific geometric patterns and mathematical ratios. He developed a set of techniques and tools to identify these patterns and ratios, which became known as Gann analysis.

One of the key principles of Gann analysis is the use of angles. Gann believed that price movements follow specific angles, particularly the 45-degree angle (1:1 ratio), the 26.25-degree angle (1:2 ratio), and the 18.75-degree angle (1:3 ratio). These angles can be drawn on a price chart to identify potential support and resistance levels.

Another important concept in Gann analysis is the idea of time cycles. Gann believed that price movements repeat in cycles of specific durations. He identified significant time intervals, such as 90 days, 180 days, and 360 days, as potential turning points in the market. Traders use these cycles to anticipate future price reversals or acceleration.

Gann analysis also includes various tools and techniques, such as Gann fans, Gann squares, and Gann boxes. Gann fans are used to identify potential support and resistance levels based on the angles drawn from significant price points. Gann squares are used to analyze the relationship between price and time, while Gann boxes help identify potential breakout levels.

It’s important to note that Gann analysis is subjective and requires interpretation. Traders may use different techniques and tools within Gann analysis, and there is no one-size-fits-all approach. It requires practice and experience to become proficient in applying Gann analysis effectively.

Overall, Gann analysis is a complex and comprehensive approach to technical analysis. It combines geometric patterns, mathematical ratios, and time cycles to forecast future price movements. Traders and investors use Gann analysis to identify potential trading opportunities, determine support and resistance levels, and improve their market timing.