Intro to Gann Square
I did not invent the Gann Square. To the best of my knowledge that credit rightly goes to a gentleman by the name of Eduard Altman. However, in my humble opinion we have taken the tool to the highest heights. It is not our only tool, but it is clearly our number one go-to-tool. As you will see, it turns out that traders change their minds from bullish to bearish at certain points in time which correspond to middle school geometry. I know it’s hard to believe. It raises all kinds of questions about human “free will”. But as you will learn, it seems that traders change their mind/direction alot like a school of birds flying en masse and simultaneously turning to create beautiful geometric patterns in the sky.
Arc Pairs (ap)
What you see above is a basic Gann Square. It is pretty straightforward, but note that the 1st arc pair (ap) has only one arc, not two. That is is because the Tradingview implementation of the tool is incorrect and has the 2nd arc of the pair in the wrong place. Because we can’t “fix” this error without Tradingview’s assistance (which they have been unwilling to give), I choose to hide the arc altogether rather than view an arc that is incorrect.
You will note that the 1st, 3rd and 5th aps are colored red. I do that to remind myself that these aps are more likely to stop a market move than are the 2nd and 4th pairs, which I have colored green. The point isn’t that the 2nd and 4th arcs are unimportant. It’s just that they more often slow a move down, than stop them altogether. In any case, any time price hits one of these arcs the market usually reacts in some form. I almost always exit a position at the 3rd and 5th arcs. The others are more likely to make me more “alert”, though I may not close my position.
The “top of squares” are the horizontal lines on the 5×5 grid. They are also roadblocks to an advance (or decline), though they seem to not be the show-stoppers nearly as often as are the arcs. The “end of squares” are the vertical lines of the 5×5 grid. Often we can expect turns and long green or red candles at these end of squares.
Gann Fans
The diagonal lines are the Gann fans. I have made the 1×1 bold and blue so that it sticks out on the chart. This is because it is strong support /resistance. In fact, anytime the price moves from side of the 1×1 to the other, it usually represents a change in trend. The 1×2 and 1×3 are similar, but not as much so as the 1×1.
Where do you find the tool?
Be sure to use the version called “Gann Square Fixed”. It holds it’s shape when scale changes.
This is pretty much what you need to know to read my charts and understand the implications of any chart I post to the chat. However, actually getting good at using the tool yourself takes time because there are several other issues you have to consider. Probably the biggest factor in the successful use of the tool is SCALE of the chart.
In my humble opinion, after more than a decade of using this tool we have identified and solved the problem of scale. It is beyond the scope of this intro, but you will soon discover that the scale of your chart changes the setup radically. For years I had students who were quite frustrated, as was I, with how vexing this problem was. But we have found the answer to this riddle. Be patient, and study with us, and you will learn it as well.