Gann’s theory is all about predicting the prices with the help of a series of angles that are drawn over various price points.
We shall see with an example to explore the true meaning of the above statement. There are many technical indictors developed based on his theories but all have one thing in common - All uses geometric angles in charts representing both time and price.
Many argued he was a fraud who copied works of other “not-so-famous” people of that time like Fakir Chandra Dutta and others and marketed in a successful manner. And, most of his techniques are largely disproven.
• Gann Fan is an indicator that is based on the idea that the market is geometric and cyclical in nature. • It consists of a series of nine diagonal lines called Gann angles. Because of the equidivided lines, it looks like a Chinese hand fan. Hence it is named as Gann Fan. • W.d Gann has supposedly developed around 1935.
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Before showing how to implement this indicator on the chart, Let’s discuss why we are talking about “time and price” repeatedly!
In fact, if we just wait till 7th February (Refer: https://www.tradingview.com/x/YrfI4OaR/), our exit point will come automatically. It confirms the theory of psychology that momentum is gone at that point which invalidates our initial trading condition.
This is why it is said that Gann angels in charts represents both time and price.
These Gann angles created by Gann fan are drawn over a price chart, designed to show different support and resistance levels of any financial instrument.
Now we will move to the next topic of The 9 Gann Angles