Gann Fan: Difference between revisions
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The Gann Fan is an analytical drawing tool used to indicate time and price movements from important highs and lows and identify price breakouts. | |||
== Understanding Gann Fan == | |||
The Gann Fan was developed by the famous trader W. D. Gann who applied a combination of mathematical and geometric principles to trading. He presupposed that there is a specific relationship between price and time that is some unit of price equals some unit of time. | The Gann Fan was developed by the famous trader W. D. Gann who applied a combination of mathematical and geometric principles to trading. He presupposed that there is a specific relationship between price and time that is some unit of price equals some unit of time. | ||
To create a Gann Fan the middle line of time relative to price is drawn through two selected points. The first point is the one from which a series of angled lines extends. And the second point is drawn to the right of the first and determines the rate of equivalence between time and price. The middle line can be of any angle. The middle line which has a 45-degree angle is known as the 1x1 price/time line. That is the price unit equals the time unit, so price and time are in perfect balance. | To create a Gann Fan the middle line of time relative to price is drawn through two selected points. The first point is the one from which a series of angled lines extends. And the second point is drawn to the right of the first and determines the rate of equivalence between time and price. The middle line can be of any angle. The middle line which has a 45-degree angle is known as the 1x1 price/time line. That is the price unit equals the time unit, so price and time are in perfect balance. |