Gann's Method

Geometry of Making Profit

by

Mr Soumya Ranjan Panda

1
Gann's Method

3rd Edition-November 2011

" I can only say that [Link] s method is

one of the mathematical
wonders. lf you belief in
the
Vaastu geometry for designing your home
or office then equally you must accept the
Gann s
method for predicting the stock price"

-Ranjan

2
Gann's Method

Disclaimer

Mis Smart Finance is an independent publisher

of "Gann's Method". Examples given in the book
are for the education purpose only. Opinions or
suggestions are given with the understanding that
readers acting on this information assume all
risks involved. The information provided herein
is not to be considered as an offer to buy or sell
security of any kind. The author, M/s Smart
Finance does not assume any responsibility or
liability resulting from the use of such
information, judgements, formulas or opinions
for trading or investment purpose.

Mis Smart Finance

#32/34, Mangalinagar 1st street,
Arumbakkam, Chennai-600106. ph:
9840348971
[Link]

3
Gann's Method

" Gann s study has deeply inspired me to think

beyond the cosmos. I think the entire universe is a
perfect [Link] the planets in the universe
are in their perfect trajectory since million and
billion years . Hence it is nothing wrong in using
the geometry for price time forecasting "

-Ranjan

4
Gann's Method

Preface

This book is having 8 chapters starting with the

basic Gan wheel to the advanced Gann tools. The
chapter -1 contains the basic gann wheel explana
tion , the number and the degree relation etc.
From 2n d chapter to 5t h chapter I have discussed
the dif ferent relations of price, time and degree.
in that course also you will find various
interesting tricks and techniques to predict a
trade . Chapter-7 has all the acceptable Gann
[Link] - 8 explains 34 intraday trading
techniques.

The complete understanding of this book will

surely help you in making an accurate trade
decision.

-Ranjan

5
Gann's Method

" For me Gann was one of the best mathemati

cians of his time and has done a great work
which is beyond the thought process of his
contempo rary mathematicians "

-Ranjan

6
Gann's Method

Acknowledgement

This work is one of my most important achieve

ments in life . I convey my sineere thanks to all
my well wishers, friends and clients who have
supported me in this course of development. My
special thanks to my wife who is the 1 st reader of
this entire manuscript before it has gone to press
for publishing. Her continuous support and
encouragement made me to finish this work for
the well being of the society. I have made an
attempt to present the entire concept in the
simplest manner but as a human being me too
have some limitations in thought process . Your
feed back is highly valuable to bring the
modifications in my future editions.

Soumya Ranjan
Panda

7
Gann's Method

"Putting theory into practice is the best job

which one can do. In this book I have made an
attempt to do so "
-Ranjan

8
Gann's Method

CONTENTS

PageNo
Chapter 1: Introduction to Gann's 10

Method Chapter 2: Squaring Price With 25

Price Chapter 3: Current Price and Past 37

Time Chapter 4: Price Range and Time 49

Chapter 5: Price Range and Time in Current Trend 67

Chapter 6: Gann's angle and dynamic principles 91

Chapter 7: Gann Tools and Technique 117

Chapter 8 : 34 Intraday Trading Techniques 131

9
Gann's Method Introduction to Gann's Method

Chapter 1

Introduction to Gann's method

1.1 Introduction

1.2 Gann wheel

1.3 Gann wheel analysis

1.4 Degree to Price relation

1.5 Constructing Gann's channel

10
Gann's Method Introduction to Gann's Method

Chapter 1

Introduction to Gann's method

1.1 lntroduction :
William. D. Gann was one of the most
successful traders of his time. Born in
Lutkin, Texas on June 6, 1878 A.D, started
commodity trading and stock market
trading in 1902, and moved to New York
City in 1908, opened his own broking firm,
[Link] & Co., he died on June 14,
1955 at Miami,Florida.
His use of Natural Law and geometric
proportions based on the circle, square,
and triangle in the Stock and
Commodities markets are effective today
as they were 50 years ago. His
techniques work in any market. His
methods are seen to be a bit unusual and
even mystical to many traders, but they
have proven themselves time and again
11
Gann's Method Introduction to Gann's Method
over the past century.

12
Gann's Method Introduction to Gann's Method

The key point of his work is that he

establishes the relation between the price
and time after converting it into degrees.
Neither I am a Gann expert nor I have
attended any seminar conducted by the
Gann experts. I just love his
mathematical works and its application
in forecasting the future price and time.
Many Gann experts use the astrology
with his work. Few s/w also available to
predict the future price with respect to
astrology using Gann method but I never
knew those methods. What ever I am
going to discuss in this chapter is purely
a mathematical one and can be used with
the help of paper and pencil. This book
will start with the Gann wheel and will
end at various squaring techniques.
Technique for taking
weekly, monthly trade decision are also
included. I found that it is very much
useful for taking the intraday trading
decision. Hence there is nothing harın in
using this.
12
Gann's Method Introduction to Gann's Method

Though many Gann legends argue that this

is the only and the only one way to predict
the future price of a stock, but I do not
agree with them. it is just a method but not
a full proof technique to predict the future.
If you ask me is there any full proof
method to predict the future stock price.
My answer will be- 'No'.

1.2 Gann wheel:

The Gann wheel is the numerical

arrangement of numbers from 1 to 81 in a
spiral manner. it is a table consisting of 9
rows and 9 columns. Many s/w program
support 13X13 even more.

The picture given in the next page is a

Gann's square of 9 wheel. The number one
is placed in the centre then one circle is
completed by placing 2 to its left, 3 on the
top of 2, 4 on the right of 3, 5 on the right
13
Gann's Method Introduction to Gann's Method
of 4, 6 below5, 7
below 6, 8 on left of 7, 9 on left of 8. üne
spiral is completed at this position.

14
 Gann's Method Introduction to Gann's Method

Gann Square of 9 Table

The second spiral starts from 10. Like this all the 81 members are arranged in the
9X9 table.

The above table is the basic arrangement

of numbers in a 9 X 9 table.

15
Gann's Method Introduction to Gann's Method

Now go to little complex nature of this 9X9

table. Imagine this table placed inside a
circle whose centre is at 1. Then the typical
Gann wheel will look like the below picture
as in section 1.3. Now don't break your
head to explore the wheel because we will
explain it in detail in later section.

1.3 Gann wheel analysis:

Now little bit concentrate on the Gann's 9X9

table. lf you imagine a circle having centre
at 1 and the squared table is inside the
circle. From Gann wheel imagine a circle
having element 15 in its circumference and
centred at 1. If the starting is the O degree
then the number 45 degrees from 15 will be
17, the
number 19 is 90 degrees from 15, 23 is
180 degrees up from 15 like wise
15
Gann's Method Introduction to Gann's Method
34 is
360 degrees up from 15

16
Gann's Method Introduction to Gann's Method

17
Gann's Method Introduction to Gann's Method

1.4 Degree to Price relation :

Degree to factor table:

Degree
Factor
360 degree
2
315 degree
1.75
270 degree
1.5
225 degree
1.25
180 degree
1
135 degree
0.75
90 degree
0.50
45 degree
0.25
22.5
degree 0.125

Why these factors?

If you will imagine this movement as spiral then
the arc length created by each one degree
movement is almost 5.55 X 10-03 unit assuming
the diameter of the spiral starting with 1. Based
on this concept the factors are being derived.

17
Gann's Method Introduction to Gann's Method

Now see the number relation with the

factors.

Example 1: Which number (say N) is

180° down from number 15?

If you will
neglect the decimal part then the integer
part will be 8. If you observe the Gann
table then the number is exactly what
we have found out through the
calculation.

Example 2: What number (N) is 180°

up from number 34?

If you will
neglect the decimal part then the
number we will get is 46. it is exactly
what we have found in Gann table.

18
Gann's Method Introduction to Gann's Method
Gann specifies that 45°, 90°, 180°, 360° are the
potential resistance and support for a particular
stock price.

19
Gann's Method Introduction to Gann's Method

Example 3: On 30th August 2007 SBI, OHLC

<lata are as follows (1570, 1618, 1570,
and 1596). Based on Gann's degree to
price relation how to generate the most
likely support and resistances for the next
trading session?

Before applying the Gann technique let us

analyse the data for knowing the direction.
Simple techniques to analyse these data
points. Take the 5 days moving average
MA (5), 1O days moving average MA
(1O) and 30 days moving average prices
MA (30). For our example MA (5) = Rs
1570/-, MA (10) = Rs 1520/-, MA (30) =
Rs 1571/-. My closing price is well above
5 days moving average. Hence in short
term I will expect a positive move in the
script. Also it is a coincident that my low
is exactly equal to the MA (5), If not also
no problem.

19
Gann's Method Introduction to Gann's Method

Now I will start my calculation from the

day's low of 1570.

DEGREE UP DOWN
45 1589.874 1550.251
90 1609.873 1530.627
180 1650.246 1491.754
360 1732.493 1415.507

Above table represents that 1589 is 45°

up from 1570 and 1550 is 45°down from
1570. My closing is well above the 45°
up price. Hence my next upside
resistances will be 1609-1650-1732
support 1589-1550-1530.

Gann trader follows this rule as to enler a

long trade once the price crosses 45°
up
/rom the days low, keeping the stop loss at
45° down/rom the days low. The target
20
Gann's Method Introduction to Gann's Method
will be above 90° -135°- 180° data points.

20
Gann's Method Introduction to Gann's Method

Is this method useful for intraday?

it is one of the best methods for intraday.

You need to have 2 minutes or 5 minutes
[Link] the hourly high or low point.
The starting point will be 22.5° or multiple
of it.
We have many interesting methods which are
explored in subsequent chapters. Hence read
all the techniques before applying it into
practice.

21
Gann's Method Introduction to Gann's Method

1.5 Constructing Gann's channel:

Step 1: Consider the most significant low.

Step2: Compute the 45 degree, 90 degree,

180 degree, 360 degree, 540 degree,
720 degree price up from the low.

St ep 3: Draw the horizontal lines at

. onces.
those

Step 4: Take the square root of low and

adjust it to an integer value. Say it as B.

Sept 5: Draw the vertical lines by

counting the B number of days from the
low. Continue this process for 4 to 5
steps.

Step 6: Draw the channels by joining

the intersections, points of the
horizontal and vertical grids.

22
Gann's Method Introduction to Gann's Method

Example : Construct a Gann channel us

ing the swing low of SBI ?

Do this as your 1st assignment.

23
Gann's Method Introduction to Gann's Method

24
Gann's Method Squaring Price with Price

Chapter2

Squaring Price with Price

2.1 Introduction

2.2 Squaring price with price

2.3 Converting price to degree

2.4 Trade decision using price

squaring action

25
Gann's Method Squaring Price with Price

26
Gann's Method Squaring Price with Price

Chapter2

Squaring Price with Price

2.1 Introduction:

Gann always stressed upon three things in

order to predict the future price movement of
a stock or commodity. They are 1. Price,
2. Time 3. Pattern. He establishes the
geometrical relation between the price and
time for predicting the future movement. If
you see Elliot's wave theory, Gann theory
and Fibonacci theory, you will find one
common thing that all these theories are
based on the harmonic nature of price.
This is a truth in the capital market.

2.2 Squaring price with price:

in chapter-1 I have discussed how the price

is related to each other in a Gann's square
of
27
Gann's Method Squaring Price with Price

nine table. Before going deep into the

subject we should understand the Gann
square. Gann always specified that price,
time and pattern have a strong relation
with the geometrical figures like circle,
triangle, rectangle and hexagon. He also
proved it that the prices falling in the
edge, diameter of these objects are the
key resistances and supports of the
current price movement.

What is a Gann square?

The rectangular spiral formed by placing

a number at the centre of the object is
called a Gann square. in chapter-1 Gann
wheel picture the four dimensional body
inside the circle is called a Gann square.

The horizontal line and the vertical line

containing the Gann squares centre
number are called cardinal.
28
Gann's Method Squaring Price with Price

Gaın lHe

Construction of the Gann square is quite

easy. It requires three inputs that is the
starting price, increments and the factor. If
you see the above Gann square table the
starting price is 1, increment is 1, and the
computing factor is also 1. Many working
model is available on line to construct Gann
wheel.
29
Gann's Method Squaring Price with Price

What is Gann angle?

Gann has specified 11 different angle
combinations as follows:
1 X 16 = 86.25 degrees
1 X 8 = 82.5 degrees
1 X 4 = 75.0 degrees
1 X 3 = 71.25 degrees
1 X 2 = 63.75 degrees
1 X 1 = 45.0 degrees
2 X 1 = 26.25 degrees
3 X 1 = 18.75 degrees
4 X 1 = 15.0 degrees
8 X 1 = 7.5 degrees
16 X 1 = 3.75 degrees
lXl angle is translated as one unit rise in
price with one unit rise in [Link]
Gann does not specify any scale on
30
Gann's Method Squaring Price with Price

how to place price and time in the X and

Y axis to derive these degree but Robert
W. Colbyin his book "the Encyclopedia
of Technical Market Indicators" Second
Edition, McGraw-Hill Publishing, 2003
mentioned that one unit of price will be
taken as 1/16th of an inch and one week
of time period will be taken as 1/16th of
an inch to draw ganns chart. But this is a
standard followed in all the s/w having the
gann tools. in very simple words, 'Gann
angles are the slopes of the line made with
x axis if you will place prices and time in
the order of 1Xl,1X2,1X8 and so on.'
2.3 Converting price to degree:
Formula: - Mod ((sqrt(N)*180)-
225,360) This excel formula will convert
any number of your choice into degrees.
Numbers having same degree line square
with each other and considered as the
major support and resistance area.

31
Gann's Method Squaring Price with Price

Example: Below mentioned are the 4

weeks OHLC (open, high, low, and close)
data of SBI. Explain price squaring
relation?

32
Gann's Method Squaring Price with Price

in the above table I have converted all

OHLC data to degree format by using the
above formula. Now consider 27th August
closing price 1554.75 which is 32 degree.
All closing prices having 32 degree or
multiple of 32 degree will square with this
price. You can grant error up to 7
degrees. Hence 23r d August 07 price
1414.75, 13thAugust 07 price 1613 squares
with the prices and act as the support and
resistances of the next move.

2.4 Trade decision using price squaring action

Whatever I have discussed earlier is with

respect to the past event. Now see the
present event. Gann traders believe that the
prices 45 degree, 90 degree, 180 degrees
are important for trade decision. Hence
price above or below from the present
price by 45 degree, 90 degree, 180 degree
factors will act as a point of trade decision.

33
Gann's Method Squaring Price with Price
Squaring angles up from the computed
angle

34
Gann's Method Squaring Price with Price

(i.e. in our example 32 degree) is

calculated by adding 45, 90,180 to the
computed angle and vice versa. Below
mentioned table displays the squaring
angle of 32 degree and its price
conversion using square root formula
(explained in chapter 1).

Angles up from 32 Angle factors price

77 0.43 1589
122 0.68 1609
212 1.18 1649
Angles down from 32

13 0.072 1549
58 0.32 1529
148 0.82 1491

With respect to the closing price of

27t h August 07 i.e. 1554.75 the next level
of resistances are 1589, 1609, 1649
and
support 1549, 1529, 1491.

34
Gann's Method Squaring Price with
Price

Below mentioned data is the price data from

27t h August to 3r d September 07.

Date Open High Low Close

27-08-2007 1519 1563 1486 1554.75
28-08-2007 1575 1575 1541 1550.6
29-08-2007 1504.1 1585 1504.1 1573.85
30-08-2007 1584 1604.7 1559 1570.85
31-08-2007 1570 1618 1570 1600.35
03-09-2007 1619 1623 1602.35 1606.65

On 28t h August if I have to initiate a trade

in the opening session using this principle
then I will observe the opening price which
is well below the 1st level of resistance 1589.
This is also the price falling below 45 degree
line. it is a bearish signal. I will enter a sell
order keeping my stop loss at 90 degree up
price
i.e. 1609. my initial target will be 45 degree
down price from 32 degree price point that is
1549. If you observe the 28t h day data then I
am very much in the target.

35
Gann's Method Squaring Price with
Price

This method is not discussed by any

gann expert. Based on gann principle,
taking the previous day data I have
innovated this static technique for day
traders. This is one of the best static
techniques for day traders. I never claim
that it is a full proof technique but it
works well in an unbiased and less
volatile market.

You can experiment this with 60 degree

and its multiples also.

36
Gann's Method Current Price and Past
Time

Chapter3

Current Price And Past

Time

3.1 lntroduction

3.2 Squaring current price with

past time

3.3 Conclusion

37
Gann's Method Current Price and Past
Time

38
Gann's Method Current Price and Past
Time
Chapter3

Current Price And Past

Time

3.1 Introduction:

in the earlier two chapters we have discussed

the price squaring action. Now from this
chapter onwards we will discuss the price
and time squaring actions. Price and time
squares with each other in five different
ways. From chapter 3 to chapter 7 we will
discuss one by one. Each chapter will tel1
you how to use these techniques. Always the
price action is not a silent activity. For
example if you consider SBI, on the 2nd
week of August 07 it made high of Rsl 700/-
plus and in the following week it touches a
low of Rs1400 /
- plus. in the month of September 07 when
it is trading at Rs1600/- plus, what kind of
39
Gann's Method Current Price and Past
decision I shall take?
Time This decision

process will be discussed in this chapter

using Gann's square of nine principles.

40
Gann's Method Current Price and Past
Time

3.2 Squaring current price with past time

in chapter-2, 1 have explained how to

convert the price to degree. in this
chapter 1 will give a relation between
time and degree. Go back to your
elementary mathematics, years back
when you were in your upper primary
standard your teacher would have taught
you a relation that is 1 degree is 4
minutes. lf you will convert your number
of trading days into the degree format
then you need to convert it to hour then
minute format. Once it is converted to
degree you need to divide it by 360 to
find out the number of rotations you have
taken from one price change to other
price change.

Example 1:SBI 8t h August high was

1734.8, 23r d August low was Rs 1407/-
and current price is Rs1610/- on 4th
September. What will be my decision
based on
40
Gann's Method Current Price and Past
Time

price time relation? From high to low it has

taken 11 trading days and 16 calendar days.
This is, 24 X 11 X 60 = 15840 minutes. lf
you divide it by 4 then it will be 3960
degrees. One circle rotation is 360 degrees.
These 11 rotations will complete 3960
degrees. This I have explained to understand
the degree and time relation. But this
calculation will always result the number of
days as the minutes can be represented as
days. So straight way you can take the
number of days.

Once it is converted to the number of

rotations we will treat the days as a mere
number nothing other than that. Convert that
number to degree using MOD function as
discussed in the chapter 2. The number 11 is
12 degree. Its O, 45, 90,180 and 270 degree
offsets are
12, 57,102,192,282.

41
 Gann's Method Current Price and Past
Converting 16 calendar days to degrees
Time we get 135
degrees.

42
Gann's Method Current Price and Past
Time

Now convert the low 1407 to degree which

is 47 degree. The O, 90,180,270 degree of
set of the price are 47,137,257, 317.

From this I conclude the 16 calendar

days is squaring with the low 1407 at 90
degree offset i.e. 47+90=137, which is
two degree more as compared to the
calender days (degree conversion) .

Now the Gann square prices will be 90

degree addition starting from 137 and
time scale will be 16 period counts
starting from 23r d August.

Angles up from 47 Angle factors

137 0.761 1465
257 1.428 1516
317 1.761 1542
407 2.261 1582
497 2.761 1622
587 3.261 1662

43
Gann's Method Current Price and Past
Time

The point at which the current price squares

with the time, the current trend ends there.
in our case the price 1465 squares with the
time 16 calendar days. This is a
confirmation signal that the down trend
ends once the price crosses 1465. After this
cross over if the upward march is
continuing the script will take next 16
trading sessions to touch its all time high to
complete one cycle of harmonic motion.

The price square is completed on the day

following the 23r d August low. On 12
days from the 24th August the script is at Rs
161O /-. Hence the price is in between 407
and 497 (4th and 5th row in the table).
Therefore buying is advisable here by
keeping the stop loss at 1582 and target
1662 to 1740 in next 4 calendar days.
Though many books have told about how
price in current trend squares with the time
in prior trend but they do not explain
43
Gann's Method Current Price and Past
Time

which price will be considered as a change

of trend indicator. Very precisely Gann
has specified that when price and time
will square the pre-existing trend will
die and new trend will start. in our
example of SBI the down trend will end
when the price cross above 1465.

How much time it will take to cross this

price?

The price Rs 1465/- is almost in the 15

% retracement from the high Rsl 734.8.
The 15% retracement of 16 calendar
days is 2.4 days, round it to 2 days.

So we conclude that by using Gann price

in current trend with time in prior trend
if the stock moves above 1465 in next
two calendar days then this should be
taken as a time and price squaring action.

44
Gann's Method Current Price and Past
Time

This price will be considered as the strong

support for the forthcoming trend.

If this cycle continues then the stock will

touch its high in the coming 14 days. This
does not hold good always. If neither the
trading days nor the calendar days in the
prior trend square with the price in current
trend then you need to drop this method
and see for other methods discussed in
other chapters.

So far we have been talking about the

price, time and the trend but not about
volume. in many Gann studies I did not
find the importance of volume. May be the
reason would be Gann was a commodity
trader and given more importance to price,
time and trend.
Through regular mind bugging exercises to
establish a perfect correlation of volume
with the Gann's method, I found out when

45
Gann's Method Current Price and Past
the squaring of priceTime
and time happens
with

45
Gann's Method Current Price and Past
Time

rise in 1O days average trading volume

the prediction comes true or else it is
just a false signal. For better practice of
this method just have a look in 1O days
average trading volume before entering
a trade. If price action supports the
volume then go ahead with this
technique, it will yield the best result.

3.3 Conclusion:

T o use this technique following steps

. given.
are

Step-1: Identify the high -low or low -

high or high- high or low-low ofa prior
trend.

Step-2: Convert the low or high to degrees.

Step 3: Compute the +45, +90, +180,

+270 and -45,-90,-180,-270 degree
offsets of
46
Gann's Method Current Price and Past
Time

converted price degree.

Step 4: Count the number of calendar

days and number of trading days between
this high
-low or low -high or high- high or low-low
of the prior trend.

Step 5: Convert days to degrees.

Step 6: The price offsets degree which

coincides with the time degree called the
'price time square'.

Step 7: Convert that price offsets degree

and its higher order degrees to price using
degree factors.

Step 8: Take the current market price and

compare with the computed price and the
elapsed days to take a trade decision. it
will not even take more than 2 to 3
47
Gann's Method Current Price and Past
minutes to decide upon
Time a trade by using

this method

48
Gann's Method Current Price and Past
Time

These 8 steps can be put on an excel

sheet and just do the job in one click of
mouse. it will not even take more than 2
to 3 minutes to decide upon a trade by
using this method.

49
Gann's Method Price Range and
Time

Chapter 4

Price Range and Time

4.1 Introduction

4.2 Number to degree conversion table

4.3 Squaring price range and Time

4.4 Conclusion

49
Gann's Method Price Range and
Time

50
Gann's Method Price Range and
Time

Chapter 4

Price Range and Time

4.1 Introduction:

in the previous chapter we have discussed

about current price and previous time
squaring action. in this chapter we are
going to discuss about how the price range
in the prior trend squares with the time in
the prior trend. lf you happen to know the
Fibonacci Retracement Technique, this is
one more way of retracement technique by
taking static point increment and
decrement. in this chapter I will discuss
few interesting intraday techniques for
serious traders. Just take a print out copy
of 'the number to degree conversion table'
and keep it on your table. With the help of
a pencil you can be able to take a trade
decision by using this technique.
51
Gann's Method Price Range and
Time

4.2 Number to degree conversion table:

Number Degree Conversion table
Number Deg Number Deg Number Deg Number Deg Number Deg
1 315 32 73 63 124 94 80.2 125 347
2 30 33 89 64 135 95 89.4 126 355
3 87 34 105 65 146 96 98.6 127 3.5
4 135 35 120 66 157 97 108 128 11
5 177 36 135 67 168 98 117 129 19
6 216 37 150 68 179 99 126 130 27
7 251 38 165 69 190 100 135 131 35
8 284 39 179 70 201 101 144 132 43
9 315 40 193 71 212 102 153 133 51
10 344 41 208 72 222 103 162 134 59
11 12 42 222 73 233 104 171 135 66
12 39 43 235 74 243 105 179 136 74
13 64 44 249 75 254 106 188 137 82
14 88 45 262 76 264 107 197 138 90
15 112 46 276 77 274 108 206 139 97
16 135 47 289 78 285 109 214 140 105
17 157 48 302 79 295 110 223 141 112
18 179 49 315 80 305 111 231 142 120
19 200 50 328 81 315 112 240 143 127
20 220 51 340 82 325 113 248 144 135
21 240 52 353 83 335 114 257 145 142
22 259 53 5.4 84 345 115 265 146 150
23 278 54 18 85 355 116 274 147 157
24 297 55 30 86 4.2 117 282 148 165
25 315 56 42 87 13.9 118 290 149 172
26 333 57 54 88 23.5 119 299 150 180
27 350 58 66 89 33.1 120 307 151 187
28 7.5 59 78 90 42.6 121 315 152 194
29 24 60 89 91 52.1 122 323 153 201
30 41 61 101 92 61. 123 331 154 209
31 57 62 112 93 70.9 124 339 155 216

52
Gann's Method Price Range and
Time

If you happen to observe the number

degree conversion table then see number
1, 9, 25, 49 squares with each other since
all of them are 315 degree.

4.3 Squaring price range and Time :

You can find the price range from close to

close, high to low, low to high in a
particular time range. Convert the price
range to degree and compute its offset.
Take the total trading days and calendar
days in that price range. Then from the
table find out its degree equivalent. The
price offset which coincides with the time
offset is considered as the squaring points.
Trade decision will be taken at this point.

This mathematical thing looks very simple

but in reality these are bit difficult to take
one uniform trade decision.

53
Gann's Method Price Range and
Time

What makes me to rely on these

methods?

While following the retracement

techniques I have limitations for static
point retracement ratio. Though this is
also a static point technique but I have
the freedom to make it dynamic. See the
next example to know the importance of
this technique.

Example 1:

On 5th September 07 Nifty touched

intraday high of 4503 at 1O a.m. and
touched low of 4464 at 11.50 a.m. Based
on the price in current trend to the time in
prior trend suggest what type of trade
decision I should take ? Below the
intraday chart is given for reference.

54
Gann's Method Price Range and
Time

From the above data I have understood

that from high to low I have travelled
4503-4464
= 39 points and it took 1 hour and 50
minutes for me which is almost 11O
minutes. Taking 5 units as one unit we get
22 units of time. The conclusion is for 39
units of price change we take 22 time
55
Gann's Method Price Range and
[Link] the 39
and
Time 22 to degree

format we get 179 and 259 degree which

never squares with each other.

56
Gann's Method Price Range and
Time

Now use the dynamic approach in

time, by reducing the time units by one
and converting into degrees or finding
the numbers which squares with 39
from the number to degree conversion
table given above. We found 18, 39, 68
time unit squares with price range. 18
is 4 time units less from 22 time units
and it will be an ideal choice for this
job rather than 39 and 68 units.

Now the price range 39 squares with 18

time unit at angle 179. Round it to 180.
Hence my new range will be

N (R) = Price range of square to end.

in the next move in 18 time units if I will

move 52.49 points in price line then I
will complete a square.

57
 Gann's Method Price Range and
Time

Dividing 52.49 with 18 we got 2.91. Hence in each time

unit I need to move 2.91 (round it to 3) point in price to
complete the square and in this journey these prices will
act as a resistance for me.

Price squares time Resistance Time

Unit 1 resistance 4466.916 11.55 a.m.
Unit 2 resistance 4469.832 12p.m
Unit 3 resistance 4472.748 12.05 p.m.
Unit 4 resistance 4475.664 12.10 p.m.
Unit 5 resistance 4478.581 12.15 p.m.
Unit 6 resistance 4481.497 12.20 p.m.
Unit 7 resistance 4484.413 12.25 p.m.
Unit 8 resistance 4487.329 12.30 p.m.
Unit 9 resistance 4490.245 12.35 p.m.
Unit 10 resistance 4493.161 12.40p.m.
Unit 11 resistance 4496.077 12.45p.m.
Unit 12 resistance 4498.993 12.50p.m
Unit 13 resistance 4501.909 12.55p.m
Unit 14 resistance 4504.826 lp.m.
Unit 15 resistance 4507.742 1.05p.m.
Unit 16 resistance 4510.658 [Link].m.
Unit 17 resistance 4513.574 1.15p.m.
Unit 18 resistance 4516.49 1.20p.m.
57
Gann's Method Price Range and
Time

This square will not complete until and

unless 4516 level is not crossed. If you see
the chart in the subsequent time period
nifty will find resistances in those prices.

White paper proof·

At 11.55 a.m. from 4471 Nifty fell to 4469

At 12.05 p.m. from 4475 Nifty fe11 to 4471
At 12.11 p.m. from 4478 Nifty fe11 to 4472

Though the time and price are not

matching because of the adjustments we
made in time but the resistance prices are
matching perfectly in 5 min chart. If you
will get an exact match of time and price
square, the time factor also works out
precisely.
What is the trade decision? The price
squares with time in 180 degree and
hence 180,360,540,720 are the angles of
interest. The factors will be 1,2,3,4. one
58
Gann's Method Price Range and
should buy on 4516 crossTime
over which is
factor 1 price.

59
Gann's Method Price Range and
Time

Target will be 4532 which is factor 2 price.

Stop loss will be 4464 which is O degree
from the 180 degree price 4516. This will be
valid for that day.

This is very much useful for intraday.

Based on these levels and applying our
own intelligence you can take any number
of trade decisions.

Gann specifies each price as an 'energy

packet'. If it crosses one price time square,
the energy completes one circle and has
the tendency to cross the next circle. in this
theme 'Elliot wave theory' was also
defined.

This above technique is not been defined by

any Gann expert till date. This theory only is
interpreted by many Gann experts time and
again. Fact is Gann experts always treat this
method as a static method not a dynamic
50
Gann's Method Price Range and
one. The way I have adjusted the time
Time same

60
Gann's Method Price Range and
Time

way you can adjust the price range with

the elapsed time and derive one more set
of resistance and support.

in wave principle, cross over of one

resistance level act as a support for the
next resistance. Three consecutive
support breaks should be considered as
an exit point. Three consecutive
resistance break out should be
considered as a point of entry. This
principle you should follow if you want
to enter the trade inside the square.
Example 2:
Below mentioned table contains one week
data of SBI based on price in current
trend with time in prior trend. Analyse
what will be the most probable
forecasted price ?
Date Open Higb Low Close
30-07-2007 1524.45 1614.8 1509.8 1578.05
31-07-2007 1622 1635.6 1540.05 1623.85
01-08-2007 1610 1610 1540.2 1548.05
70
Gann's Method Price Range and
02-08-2007 1550 1626 Time
1544 1592.8
03-08-2007 1620 1652.4 1610 1635.75

80
Gann's Method Price Range and
Time

in the week starting 30th July 07 to 03r d

august 07, the script made high Rs1652.4
and low Rs1509.8. Hence the range is
Rs142.60 Round it to Rs142/-. The time is
5 trading days and 5 calendar days.

Converting it to degree; number 5 is 177

degree and number 142 is 120 degree. The
price squares the time in +60 degree offset.
That is 120+60= 180 just 3 degree more
from the time degree conversion, this is an
acceptable error. Hence 177,237,297,357
are the angles where the price will square
with time. But we require only one value
that is
177. For mathematical simplicity take it as
180 degree.

Hence the price range for squaring

is
+ 1 )2 =166.83. Round it to 166. If the price
moves Rs166/- in 5 time units then it will
61
Gann's Method Price Range and
complete this upward journey.
Time

62
Gann's Method Price Range and
Time

But in our case two week-ends are falling

from the last trading day 3r d August to 6t h
August. Hence take the time unit as 7
instead of 5. Hence the price unit 166 will
be divided by 7 to produce one unit change
in price with time. That is 166/7= 23.71.

in price term 1652.4+166=1818.4, is the

price at which this up trend will end in
coming 7 calendar days. During this
period it will find resistances as given in
the following table.

Below mentioned is the OHLC of SBI

from 6t h August 07 to 10t h August 07.
63
Gann's Method Price Range and
Time

The unit 2 resistance is coinciding with the

6t h August high. 7t h August high
coincides with unit 3 resistance.

Why this time is advanced by 1 day? The

exact cause of this is still beyond my
understanding. But I see all months having
31 days exhibit such action.

What will be my trade decision?

The squaring of current price with time in

prior trend is far from the current market
once.
63
Gann's Method Price Range and
Time

it is advisable to do the trade inside the

square. Cross over of one resistance
level should be taken as entry point,
bearing target at the next resistance level
and stop loss at one step below the entry
level.

in many cases the price range will not

square with the time in the prior trend.
But nothing to worry because we have
other 3 methods to trap the price time
action.

4.4 Conclusion:

To use this technique

Step-1: Identify the high to low or low

to high of a prior trend.

Step-2: Find out the price range.

64
Gann's Method Price Range and
Step-3: Convert the price range
Time to degree.

65
Gann's Method Price Range and
Time

Step-4: Compute the +45, +90, +180,

+270 and -45,-90,-180,-270 or 60 degree
and its multiples or 90 degree and its
multiples offsets degrees.

Step 5: Count the number of calendar days

and number of trading days between this
high to low or low to high of the prior
trend.

Step 6: Convert days to degree.

Step 7: The price offsets degree which

coincides with the time degree is called the
price time square.

Step 8: Convert that price time square and

its higher order degrees to price using
degree factors.

Step 9: Take the current market price and

compare it with the computed price and
65
Gann's Method Price Range and
the elapsed days to take a trade
Time decision.

65
Gann's Method Price Range and
Time

These 9 steps can be put on an excel sheet

and you can do the job in one click of
mouse. it will not even take more than 2 to
3 minutes to decide upon a trade by using
this method.

66
Gann's Method Price Range and Time in Current
Trend

Chapter 5

Price Range And Time in Current Trend

5.1 lntroduction

5.2 Squaring the price range of prior

trend with time in present trend

5.3 Extreme price and time in current

trend

5.4 Squaring price and time in current

trend

67
Gann's Method Price Range and Time in Current
Trend

68
Gann's Method Price Range and Time in Current
Trend

Chapter 5

Price Range And Time in Current Trend

5.1 lntroduction:

in chapter-4 we have discussed how the

price range in prior trend squares with the
time in prior trend. in this section we are
going to discuss how the price range in
prior trend squares with the time in the
current trend. in earlier chapter we used to
compute the price range, the time elapsed
in that price range and based on this we
used to compute the future price resistance
and support. Thing will be more realistic
and live if we will be able to time the trend
in advance. This chapter will teach you this
wonderful technique of Gann to predict the
time in advance.

69
Gann's Method Price Range and Time in Current
Trend

If someone asks you SBI has fallen from its

high 1734 to 1407 in 15 trading days,
Advise me how many days from this low
of 1407 it will take to touch 1650, then you
may not be in a position to answer this .
This is a question Gann faced time and
again and he has solved it in a more
precise way. it is not a miracle. it is not
astrology. it is the power of number. Each
number is hiding the mystery of his future
number. Many Gann experts understood
his formula in a right way, but failed to
apply in real life example.

This Chapter is having all the essence

to answer the above puzzle in scientific
manner.
5.2Squaring the price range of prior
trend with time in present trend.

in previous chapter we have learnt the

conversion technique to convert the
70
Gann's Method Price Range and Time in Current
Trend

numbers to degree.

We also learnt the square root theory to

convert the degree to number by using the
degree factor. In this chapter we will learn
a new formula to convert degree to number
which squares with the original number. I
feel after learning this formula all your
purpose is solved.

Numbers falling on particular angle:

((2 X N) + ((2 XA)/360) +1.25)2

N is the number of rotations you want in a

spiral. it starts with 1.

A is the angle of your choice.

1.25 is a standard constant for square.

The proof of this formula lies in your 7t h

standard mathematics.
71
Gann's Method Price Range and Time in Current
Trend

Example 1: You are being provided with

Tata Steel past 2 weeks open-high-low
close data. Considering the one week data
as prior trend and 2n d week time as
current trend predict what will happen in
the following days?
Date Open High Low Close
25-Jun-07 599.75 603.75 593.2 600.15
26-Jun-07 599 610.85 597.7 604.15
27-Jun-07 602 603.45 588.8 592.65
28-Jun-07 592 599.45 588.1 593.5
29-Jun-07 592 601.8 591.35 597.4
02-Jul-07 597.4 608.7 592.2 593.45
03-Jul-07 594 605.8 591 600.75
04-Jul-07 603 618.8 599 616.35
05-Jul-07 620.55 630 614.5 628.1
06-Jul-07 628.65 635.5 621 623.3

The high to low price range in the

previous two weeks is 635.5-591= 44.5
.Round it to
44. in degree terms it is 249 degree. in the
first week the script moves from low to
high. Time elapsed from 1st week high to
end of 2n d week is 5 trading days and
7 calendar days. The degree equivalent of
5 and 7 are 177 and 251. The price range
squares with the time in calendar days in 3
72
Gann's Method Price Range and Time in Current
Trend

degree off set. This is an acceptable error.

Now our job is to predict the time and
price action for the future week.

The number of calendar days which

squares with the time in this up trend
based on the formula (given in page 71) is
21, 44, and 74.

in the coming 21 calendar days from 6th

July 07 the price trend is going to change.
If it does not change then the same trend
will continue for another 23 days (i.e. 44-
21) from there.

What will be the price for this termination

points?

Converting 21 days to degree we get 240

degrees. The 240 degree is 1.33 in factor
terms. Using the square root theory taking
the highest value 635.5 as the initial point
73
Gann's Method Price Range and Time in Current
we have: Trend

74
Gann's Method Price Range and Time in Current
Trend

723.5 is the 1 st termination point for this

uptrend.

During this journey of 21 calendar days

the price range will be 723.5 - 635.5 =
87.5 it will find the resistance at various
points given in the following table. in
one time unit the range is 4.16 i.e.
87.5/[Link] this price to the Rs 635.5
the consecutive 21 resistance points are
as follows.
RS1 640
RS2 644
RS3 648
RS4 652
RS5 656
RS6 661
RS7 665
RSB 669
RS9 673
RS10 677
RS11 681
RS12 685
RS13 690
RS14 694
RS15 698
RS16 702
RS17 706
RS18 710
RS19 715
RS20 719

75
Gann's Method Price Range and Time in Current
Trend
RS21 723

76
Gann's Method Price Range and Time in Current
Trend

Below mentioned is the 21 days price data of

Tata Steel from 9th July to 31st July 07.

Date Open High Low Close

09-07-2007 627 632 622.1 626.5
10-07-2007 629 638 624.2 634.1
11-07-2007 630.1 661 627 655.5
12-07-2007 662.1 674 660 672
13-07-2007 672 699.5 672 695.8
16-07-2007 699.7 712 686 694.8
17-07-2007 694.1 702 674.1 681.1
18-07-2007 682 691 660.3 682.8
19-07-2007 686 692.9 678.7 682.5
20-07-2007 684 720 684 715.2
23-07-2007 712 726.6 710 721.1
24-07-2007 723.4 732.4 709 721.8
25-07-2007 720.5 725.7 702.2 709.4
26-07-2007 712 717.9 697 703.7
27-07-2007 695 697.2 646.2 651.6
30-07-2007 655 675 635 643.5
31-07-2007 646.9 659.8 642.3 656.3

If you observe this price data the

termination of this uptrend happens 3 days
in advance from the price range of 723
after the script made 4 consecutive
75
Gann's Method Price Range and Time in Current
attempts to closeTrend
above

76
Gann's Method Price Range and Time in Current
Trend

this level. Out of these 21 resistance

levels 8th, 10th, 13th, 16th and 18th
resistances are very important. That is
the 0.382, 0.5, 0.618, 0.786, 0.888 level
retracement of 21 days. From price data
if we will observe the high then these
prices has proved themselves as
potential resistances.

How to enter a trade?

If the price range and time is very wide

then it is better to enter a trade inside
the square. To my idea entering a long
trade above 38.2% resistance for target
as the termination point will be the best
choice. Same way if the trend changes
signal and stock falls below 78.6%
support zone after touching the
termination price then it is advisable to
initiate a short trade.

77
Gann's Method Price Range and Time in Current
Trend

5.3 Extreme price and time in current trend

in this section we are going to discuss one

more combination of price time squaring
action. Gann's method has not only the
price time squaring but also geometrical
angle transformations. We will discuss few
more interesting things in the subsequent
chapters. This method of Gann's square
exhibits how the ending price of one of the
prior trend squares with the time in current
trend.

Example: On 4th January 07 Tata motor hit

the high 988.4 and then fell to low of712
on 07th March 07 . Using price in prior
trend with time in current trend advice
what kind of trade decision is advisable?

Below mentioned is the price and time

chart of Tata motor, given for reference.

77
Gann's Method Price Range and Time in Current
Trend

78
Gann's Method Price Range and Time in Current
Trend

Total number of calendar days is 63 and

the number of trading days is 41. Now the
highest price from where the trend change
happens in the prior trend is 988.4.
Convert these three things to degrees using
the formula discussed in the chapter 1, we
get 988.4 is 34 degree, 63 calendar days
are 124 degree, 41 trading days are 208
degree.

Hence the price in prior trend squares with

the calendar days' time in 90 degree offset,
since 34+90=124. Now using the degree to
number conversion formula as discussed
in this chapter
For N = 1, number of days which will
square with the 63 calendar days is 15.
For N = 2, number of days which will
square with the 63 calendar days is 35.
For N = 3, number of days which will
square with the 63 calendar days is 63.
For N= 4, number of days which will
79
Gann's Method Price Range and Time in Current
square with the 63 calendar days is 98.
Trend

79
Gann's Method Price Range and Time in Current
Trend

Your count will start from 7th March.

From 7th March 07, the 15th, 35th, 63r d
and 98th calendar days we will see major
trend change in this counter. As per the
calculation 21st March, 10th April, 8th May
and 12th June are the days of major trend
change in this counter.

Price action124 degree is equivalent to

0.69 in factor terms. Hence price from
712 in this factor will act as the
resistances from this price. But in this
case the calculation will differ a bit.

Using the square root theory

The 1st level of resistance will be

0.69)2 =749.
1st level of support corresponding to 1st
level
of resistance is

2n d level of support corresponding to

1st level of resistance is

80
Gann's Method Price Range and Time in Current
Trend
Gann's Method Price Range and Time in Current
If you willrelateTrend
this price <lata with
the
squaring time the 4t h period time <lata
perfectly coincides with the 4t h period
support. Exactly on 12th June 07 the script
falls to 575 and close at 641. The question
is
81
Gann's Method Price Range and Time in Current
Trend

why this 4th period time 98 days give the

accurate result but not other forecasted
times.

To explore this I have gone into the

original writings of Gann. That I have
given in this book asa separate chapter in
chapter 6.

Gann specified 3,5,7,9 and 12 are the

master numbers. Out of which 7 is the
most important, its square 49 also
important, its second square 98 also
important, and its third square 147 also
important. Number 5 he considered as
balancing number. Number 3 is in the list
next to 7.

From the computed days 15, 35, 63 and

98; 98 is the most important day since it is
the 2n d square of 7. Hence we see a
greater price action on that day. The
number 15 and 35 is containing the
balancing number 5 in its factor hence less
price action
82
Gann's Method Price Range and Time in Current
Trend

we have seen in these days. Number 63

also contains number 3 as a factor in its
multiple 9x7. Hence we see less activity on
that day.

I made a small change in Gann's method in

this junction. Since the calendar days 63
squares with the price. I have factored it as
3x3x7 and taken the most powerful master
number in that factor which is 7. Then 7
calendar days and its multiple 7,14,21 days
act as my point of observation. I have
taken those days from 7th March to observe
the price change . I found 14th March, 21st
March, 28th March 07 also act as the days
when major price change happened.

No need to break your head in this number

game. Simplest way to apply this
technique is; in price line on the specified
day count if you are above the support
point of its price then go long. If you are
below the support point go short.
83
Gann's Method Price Range and Time in Current
Trend

in our example on 21st March Tata motor

opened at 772, touched high 778, low 760.
This price is much above the 1st level of
resistance and support. in this point going
long in this counter is advisable with stop
loss of 749 for target 787. This target is
achieved in the next trading session. Same
way taking a short ca11 on 3r d level
of resistance is advisable for target of 2n d
level of support.
Once one resistance is crossed convincingly
it used to become a potential support
point. Second most important thing is
Gann has always specified that 3
consecutive rise or fail should be taken for
identifying a trend.
These two things we need to follow in ali
Gann s techniques.
5.4 Squaring price and time in current
trend: This is the technique for which you
have been waiting for long time. We all the
capi tal market players do not believe on
past rather than present.
84
Gann's Method Price Range and Time in Current
Trend

Gann's method and tool is the only method

which value only to present but not to the
past. For example if some one asks you,
SBI has fallen from 1734 to 1507 in a time
frame of two weeks then what will be the
next move in the SBI in coming days
considering these two points are swing
high and swing low. in what time frame
it will hit what price in future? The
answer of this amazing technique lies in
this chapter.

Example: SBI from its 4th December 06

high 1379 fell to 898.10 on 16th March,
[Link] touching this low it gave a
swing reversal. What will be its next move
in price in future time period?

in terms of calendar days it is 103 calendar

days (from 4th December to 16th March)
and 69 trading days. The price range in
that duration is 1379-898.10= 480.9.
Round it to 480.

85
Gann's Method Price Range and Time in Current
Trend

Converting this 480 to angle is 119

degree, 103 is 162 degree, and 69 is 190
degree. The 45 degree price offset is
119+45=164. This squares with 103
calendar days by 2 degree difference
hence it is an acceptable error. Hence the
days of my interest will be the days
falling in the 162 degree angle.

Using the formula ((2 X N) + ((2 X A)/

360) +1.25) 2
lteration 1:
Considering N=1, angle 162 we get
number of days 17. That is 1st April 07
(non trading day)

Iteration 2:
Considering N=2, angle 162 we get
number of days 37. That is 21st April
07(non trading day)

Iteration 3:
Considering N=3, angle 162 we get
number 86
Gann's Method Price Range and Time in Current
Trend

of days 66. That is 20th May 07 (non

trading day)

Iteration 4:
Considering N 4, angle 162 we get number
of days 103. 26th June 07 (non trading day)

lteration 5:
Considering N=5, angle 162 we get
number of days147. 9th August 07 touches
high 1728.

Hence we conclude that the stock will take

the 147 calendar days /rom the low 898 to
touch the new high of the current swing.

What will be the price at that time?

The price will be the summation of the

mid point of swing low and swing high
and the new price range will be based on
162 degree factor. (1379+898)/2
=Rsl139/-.

87
Gann's Method Price Range and Time in Current
Trend

The factor equivalent to 162 degree is

0.90. Applying the square root theory the
price range is / /480 +0.90)2 = 520.
Target price of the current swing will be
1139+520= Rs1659/-

Some amount of ambiguity lies in this

method. Since the swing we have taken
for computation is a static one and long
enough for the stock analysis we will
discuss one more example based on this
to clarify the action.

Example 2: Take the case of nifty

intraday on 7th September it made swing
high of 4544 at 13:02 p.m. and swing
low 4518 at 13:43 p.m. Explain how the
price and time in current trend affect the
future movement.

The price change is 26 points in 41

minutes. Taking 5 minute as one trading
88
Gann's Method Price Range and Time in Current
session and 1 min as 1 calendar session
Trend

we have 41

89
Gann's Method Price Range and Time in Current
Trend

calendar sessions and 8 trading sessions.

Number 8 is 284 degree, number 26 is 333
degree, and number 41 is 208 degrees.
Hence the price squares the trading time in
45 degree offset. That is 333-45=288 just 4
degrees more from the 284.

Hence the trend change time is 23 time

unit from 13:43 p.m. This is roughly at
15:34p.m. Since we have closing at 15:30
p.m, we will
see the price change towards the end of the
session.

What will be the price action?

(4544+4518)/2 = 4531 is the initial level of

resistance.
4531+44= 4575 is the next level of
resistance. 4531-44=4487 is the support
for 1st level of resistance.
For 2n d level of resistance 4531 is the support.

90
Gann's Method Price Range and Time in Current
Trend

This support or resistance of 4531 is

supposed to hit in the mid way of 23
time units that is by 14:35 p.m. time (23
time unit is divided by 2 followed by
multiplication with 5 to give the time in
minute .That many minute from 13:43
p.m is 14:35 p.m.).

How to initiate a trade?

Always initiate a trade in the cross over

of the initial level of resistance for the
target of second level of resistance. Keep
the stop loss below the 1st level of
support.

More realistic view of Gann's method we

will explore in the chapter 7.

90
Garın's Method Garın Angle and garın dynamic principles

Chapter6

Gann's Angle

91
Garın's Method Garın Angle and garın dynamic principles

92
Garın's Method Garın Angle and garın dynamic principles

Chapter6

Gann's Angle

I have explained gann angle concept in

chapter-2. However now in this chapter
you are going to learn how this concept
will be used for making intraday trade
decision. Say I wish to draw a trend line at
lXl (read it "one by one") gann angle. This
means my trend line is a straight line
drawn in the price time chart which makes
an angle 45 degree with the X-axis. You
must ask me that how I have derived the 45
degree. Quite simple! This is a trend line
drawn assuming 1 unit of price change
happens with 1 unit of time change. If I
will plot 1 unit of price change with
respect to 1 unit of time change in a semi
log scale and measure the angle with the
help of a protractor I will get the angular
measurement as 45 degrees.
93
Garın's Method Garın Angle and garın dynamic principles

For making an intraday trade decision we

need a point to make buy or sell entry.
We need a stop loss point and couple of
target points. Though this job can be
done with any guess work but we need
perfection. The perfection will be
achieved only through the mathematical
calculation which is accepted by the
market.

[Link] has given us 11 different

trend lines which will guide us in making
a trade decision. These trend lines are
drawn based on the geometrical angle
proportion in X and Y axis. For example
the 2X1 (2 by 1) trendline is drawn
assuming the 2 unit of price rise or fall
happens in 1 unit of time. This trend line
makes geometrical angle of
63.75 degrees with X-axis when drawn
from a lower price point and projected
towards the higher price points. Similarly

94
Garın's Method Garın Angle and garın dynamic principles
this trendline will make 26.25 degrees
with respect to x axis when it will be
drawn from

95
Garın's Method Garın Angle and garın dynamic principles

a higher price point and project towards the

lower price point. This is the mathematical
logic available in origin shifting, parallel
line algorithm.

Now the 11 sets of trend lines from a

lower price point towards the higher price
point are as follows lXl, 1X2, 2Xl, 1X3,
3Xl, 1X4, 4Xl, 1X8, 8Xl, 1X16 and 16Xl.

The geometrical angle made by these trend

lines with the X axis in an up move
correspond to 2Xl= 63.75 degrees, 1X2=
26.25 degrees, 1X1=45 degrees, 1X3=
18.75 degrees, 3Xl= 71.25 degrees, 4Xl=
75 degrees, 1X4= 15 degrees, 8Xl= 82.5
degrees, 1X8= 7.5 degrees, 1X16= 3.75
degrees, 16Xl= 86.25 [Link]
geometrical angle made by these trend
lines with the X axis in a down move
correspond to 1X2= 63.75 degrees, 2Xl=
26.25 degrees, lXl= 45 degrees,
95
Garın's Method Garın Angle and garın dynamic principles

3Xl= 18.75 degrees,1X3= 71.25

degrees,1X4= 75 degrees,4Xl = 15 degrees,
1X8= 82.5 degrees,8Xl= 7.5 degrees,
16Xl= 3.75 degrees,1X16= 86.25 degrees.

Gann Formula for calculating the

support and resistance:
in gann study the 180 degree is considered
as factor 1. This is because between the
sun rise and sun set the solar motion
happens approximately 180 degrees and it
is considered as 1 day time.

The 2n d universal concept accepted by the

financial analysts is that the supports are
always calculated in a falling trend and it
used to be calculated from the high.

The 3r d universal concept accepted by

the financial analysts is that the
resistances are always calculated in a
rising trend and it used to be calculated
from the low.
96
Garın's Method Garın Angle and garın dynamic principles

Gann formula for calculating the

support and resistance is as follows:

a. Support = (square root of (high)-

Degree factorY'2
b. Resistance = (square root of (low) +
Degree factorY'2
Trading Rules as per gann and as
modified by me (Soumya Ranjan Panda
Author of this book).
a. The 3rd support or resistance of any
price move is important (as per
[Link]).
b. in intraday trade 45 degree support
break (lXl support) will favor sellers
and 45 degree resistance (1X1
resistance) break will support the
buyers. Provided the annual volatility
of the trading instrument must be
higher than 50% (as per my own
research )
c. in low volatile or medium volatile
market (i.e. the annual volatility of the
trading instrument is less than 50 %)
97
Garın's Method Garın Angle and garın dynamic principles

the (1X4= 15 degree) resistance and

(4X1=15 degree) support must be
utilized for long and short entıy
provided no congestion or entıy error
should be present in the calculated
price. (as per my own research )
d. lf sell entry price at 15 degree or at 45
degree greater than buy entry price at
15 degree or 45 degree price point
then it is considered as error and
rectified by changing calculation
procedure from the high and low to
mid point of high and low. This says
that instead of calculating the supports
down from high and up from low you
can calculate the same from the mid
point of high and low (as per my own
research )
e. If the price unit of the trading
instrument is a 4 digit number then
between the buy entıy and sen entıy
price at least 5 unit difference is
required to take unbiased decision as
per this principle or else
98
Garın's Method Garın Angle and garın dynamic principles

it is considered as congestion and it is

rectified by changing the high and low
to mid point. (as per my own research
)
f. If the price unit of the trading
instrument is a 3 digit number then
between the buy entry and se11 entry
price at least 3.5 unit difference is
required to take unbiased decision as per
this principle or else it is considered as
congestion and it is rectified by
changing the high and low to mid point.
(as per my own research )

g. If the price unit of the trading

instrument is a 2 digit or single digit
number then it must be converted to 4
digit number by the way of
multiplying it with 1O or 100 or even
with 1000 and the resistances and
supports wi11 be derived from the 4
digit number. And the results need to
be divided by the multiplier to
reconvert it back to its original form.
(as per my own research)
99
Garın's Method Garın Angle and garın dynamic principles

h. The smallest time interval in which

you can identify the high and low is 5
minuets after the opening bell or the
highest time interval you can consider
is the 1st 15 minute after the opening
be11. Any auction period must be
ignored. Like now in Indian market 9
a.m. to 9 :15a.m is considered as ca11
auction period. Hence the data from 9
a.m. to 9:15 a.m. must be ignored (as
per my own research
)
i. If any of your trade triggers the stop
loss or trailing stop loss then do not
re-enter the trade in the same direction
again.

As a day trader, speculation is my

profession and I will follow these
calculations like religious testimony.
Example: on 11t h November 2010
SBI between 9:15 to 9:30 a.m. made
100
Garın's Method Garın Angle and garın dynamic principles
high 3238.35 at 9:16 a.m. low 3214.10
at 9:27
a.m.

101
Gann's Method Gann Angle and gann dynamic
principles

Below given are the calculation of

resistances and supports for reference.

As per the above discussion and calculation

procedure we have made the calculation of
resistances and supports. As per the current
volatility condition we are being advised to
buy the stock at 3223.5558 or sell at
3228.8725. This is violating the point D
trade principle and considered as an entry
error. Henceforth we will change the high
and low to its mid point and do the fresh
102
Gann's Method Gann Angle and gann dynamic
calculation principles

103
Gann's Method Gann Angle and gann dynamic
principles

from the mid point. The mid point of

3238.35 and 3214.10 is 3226.225 .
The
modified calculation table is as follows.

As per the modified calculation we are

advised to buy at 3235.6986 for final
target 3280.8878 and sell at 3216.7653
for final target of 3172.0214
Trade outcome:
1. At 9:34 a.m. We got a chance to sell
at 3217 and kept out stop loss at
3235.70 as per our calculation. Upon
achieving the 1st target 3214.4we trail to
stop loss
102
Garın's Method Garın Angle and garın dynamic principles

to 3216.80, then upon crossing the 2n d

target we trail the stop loss to 3214.40.
Unfortunately after touching the low 3211
at 9:39 a.m. the trailing stop loss triggered
at 3214.40 and we just bagged less then +3
points.
2. Considering our short trade adventure is
wrong and as per the last protocol set in
the trade rule we waited for the 3235.70 to
come which we have got a chance at 10:07
a.m. and achieved till 3254 till 11:27 a.m.
which is close near to our 45 degree target
point.

If you are not quick in changing the stop

loss also it will not dampen your trade
performance.

in this case if my sell stop loss triggered at

3235.7 I will accept close near to 18.9 point
loss and be a buyer at this point keeping the
stop at 3235.7 and aim for the last target
3281 with some logical trailing stop loss.
103
Garın's Method Garın Angle and garın dynamic principles

Day trading using Gann Angle

dynamic approach: If we will make use
of the volatility along with the gann
angle then this concept will become
dynamic and it will produce great result.
All the above process that I have
explained in the earlier section will
remain same only additional parameter
daily volatility will be used with the
gann angle. in this method, we will
calculate the daily volatility based on the
past 1O days' last trade price of any
instrument.
1. Daily volatility calculation:
[Link] past 1O days' last trade price of
any stock or index.
[Link] the absolute return by using
the natural logarithm function LN().
You will get 9 data points.
Formula: Absolute return
= LN (Current price/ Previous price)
[Link] the square absolute return
104
Garın's Method Garın Angle and garın dynamic principles
for
all 9 data points.

105
Garın's Method Garın Angle and garın dynamic principles

d. Calculate the average of absolute

return and square absolute return.
e. Calculate variance.
Formula:
Variance = square absolute return - (absolute
return)2
f. Calculate daily volatility percentage.
Formula: Daily Volatility percentage =
square root of (variance) X 100.

From the daily volatility percentage, we

understood in the coming day the stock or
index whose daily volatility percentage was
calculated as per the above process would
fluctuate to the extent of daily volatility
percentage.

I have taken the state bank of lndia 12

October to 25 October 2011 to predict the
intraday level for next trading session using
the gann angle and the volatility.

106
Gann's Method Gann Angle and gann dynamic
principles

I have calculated the daily volatility as

explained above for sbi.
Date LTP-581 Absolute return Square absolute return
12-0ct-11 1880 o o
13-0ct-11 1875.35 -0.002476468 6.13E-06
14-0ct-11 1883 0.004070941 1.66E-05
17-0ct-11 1885.5 0.001326788 1.76E-06
18-0ct-11 1885 -0.000265217 7.03E-08
19-0ct-11 1909.25 0.012782674 0.000163397
20-0ct-11 1933.9 0.012828195 0.000164563
21-0ct-11 1949 o.001m131 6.05E-05
24-0ct-11 1911 -0.019689755 0.000387686
25-0ct-11 1842.25 -0.036639015 0.001342417
Average -0.002253792 0.000238121
Variance 0.000233042
Daily Volatility 1.526570684
%

Above calculation says the daily

volatility is 1.5266%. Hence, the stock
has the probability to fluctuate by
1.5266% in the coming day. Based on the
above conclusion I will see a price
fluctuation of28.1233 (i.e. 1842.25 x
1.5266/100) rupee in the sbi counter in
future trading [Link] my expected
high is 1842.25+28.1233
106
Gann's Method Gann Angle and gann dynamic
=1870.3732 principles

107
Garın's Garın Angle and garın dynamic principles
Method

my expected low is 1842.25-

28.1233=[Link] in order to get the
buy sen level in the gap up opening with
uptrend I win use the 1842.25 as low and
1870.3732 as high in the gann angle tool and
fonow an its rules to derive the targets.
Using the above price points I observe that
the trading rule--d is being violated, hence I
have done the changes in the data point to
1856.32 (i.e. midpoint of the above data
points) and derive the fonowing levels for
the future trading session.

in the future trading session which fonows

the 25t h october 2011 any gap up
opening above 1849.14 and below 1863.50,
if the price cross over 1863.50 then I win
buy sbi for optimum target of 1898 and any
gap up opening and price below 1849 I win
sen for target 1815.25. Refer the table in
next page to view the calculations.

108
Gann's Method Gann Angle and gann dynamic
principles

Low High
1856.32 1856.32
Degree Degree Factor Resistance Degree Factor support
16X1 86.25 OA79166667 1897.839 1X16 86.25 OA79166667 1815.2598
8X1 82.5 OA58333333 1896.025 1X8 82.5 OA58333333 1817.0355
4X1 75 OA16666667 1892.398 1X4 75 OA16666667 1820.5894
3X1 71.25 0.395833333 1890.586 1X3 71.25 0.395833333 1822.3677
2X1 63.75 0.354166667 1886.964 1X2 63.75 0.354166667 1825.9269
1X1 45 0.25 1877.925 1X1 45 0.25 1834.84
1X2 26.25 0.145833333 1868.908 2X1 26.25 0.145833333 1843.7748
1X3 18 .75 0.104166667 1865.307 3X1 18.75 0.104166667 1847.3548
1X4 15 0.083333333 1863.508 4X1 15 0.083333333 1849.1461
1X8 7.5 0.041666667 1859.912 8X1 7.5 0.041666667 1852.7313
1X16 3.75 0.020833333 1858.116 16X1 3.75 0.020833333 1854.5252

Similarly, to get the buy sell levels in the

gap down opening and downtrend I will
use the 1842.25 as high and 1814.1268
as low in gann angle tool and derive the
targets.

Using the above price points I observe

that the trading rule-d is being violated,
hence I have done the changes in the
data point to 1828.19 (i.e. midpoint ofthe
above data points) and derive the
following levels for the future trading
108
Gann's Method Gann Angle and gann dynamic
session. principles

109
Gann's Method Gann Angle and gann dynamic
principles

Low High
1828.19 1828.19
Degee Degree Factor resistance Degree Factor support
e
16X1 86.25 0.479166667 1869.3954 1X1 86.25 0.479166667 1787.4438
6
8X1 82.5 0.458333333 1867.5943 1X8 82.5 0.458333333 1789.2058
4X1 75 0.416666667 1863.9947 1X4 75 0.416666667 1792.7325
3X1 71.25 0.395833333 1862.1962 1X3 71.25 0.395833333 1794.4971
2X1 63.75 0.354166667 1858.6019 1X2 63.75 0.354166667 1798.029
1X1 45 025 1849.6312 1X1 45 0.25 1806.8738
1X2 26.25 0.145833333 1840.6822 2X1 26.25 0.145833333 1815.7404
1X3 18.75 0.104166667 1837.1086 3X1 18.75 0.104166667 1819.2931
1X4 15 0.083333333 1835 .3232 4X1 15 0.083333333 1821 .070 7
1X8 7.5 0.0416 66667 1831 .7548 8X1 7.5 0.041666 667 1824.6286
1X16 3.75 0.020833333 1829 .972 16X 3.75 0.020833333 1826 .4089
1

in the future trading session which follows

the 25t h october 2011 any gap down opening
above 1821.07 and below 1835.32, if the
price cross over 1835.32 then I will buy sbi
for optimum targetof1869.39 and any gap
down opening and price below 1821.07 I will
sell for target 1787.44.

110
Garın's Method Garın Angle and garın dynamic principles

If the price in future day may have a gap

up opening above 1863.5078 or below
1849.1461 or gap down opening
below 1821.0707 or above 1835.3232
then the above calculation will not solve
our [Link] this case we need to
take the opening price of that day into
account for calculation of volatility. We
will use the opening price with projected
high and opening price with projected
low in gann angle tool to derive the entry
levels.

Say SBI open at 1870 on the future

trading day which follows the 25th
october 2011 then in the volatility
calculation replace the 1842.25 with
1870 and calculated the new volatility
and expected high and low. The new
data points will be as follows

110
Gann's Method Gann Angle and gann dynamic
principles

Date LTP-SBI Absolute return Square absolute return

12-0ct-11 1880 o o
13-0ct-11 1875.35 -0.002476468 6.13E-06
14-0ct-11 1883 0.004070941 1.66E-05
17-0ct-11 1885.5 0.001326788 1.76E-06
18-0ct-11 1885 -0.000265217 7.03E-08
19-0ct-11 1909.25 0.012782674 o.000163397
20-0ct-11 1933.9 0.012828195 o.000164563
21-0ct-11 1949 0.007777731 6.05E-05
24-0ct-11 1911 -0.019689755 o.000387686
25-0ct-11 1870 -0.021688234 0.00047038
Average -0.000592594 o.000141228
Variance 0.000140877
Daily Volatility % 1.186916667
Expected high 1892.195342
Expected low 1847.804658

New trading levels calculation in uptrend

is given in the next page . Since the
opening is gap up, the uptrend calculation
will be fol lowed for trade decision. in this
case, the downtrend level calculation is
not required

111
Gann's Method Gann Angle and gann dynamic
principles

Low high
1881.1 1881.1
Factor Resistance Factor support
16X1 86.25 OA79166667 1922.8941 1X16 86.25 OA79166667 1839.7651
8X1 82.5 OA58333333 1921.0674 1X8 82.5 OA58333333 1841.5527
4X1 75 OA16666667 1917A167 1X4 75 OA16666667 1845.1306
3X1 71.25 0.395833333 1915.5926 1X3 71.25 0.395833333 1846.9208
2X1 63.75 0.354166667 1911.947 1X2 63.75 0.354166667 1850.5038
1X1 45 0.25 1902.8483 1X1 45 0.25 1859.4767
1X2 26.25 0.145833333 1893.7713 2X1 26.25 0.145833333 1868A712
1X3 18 .75 0.104166667 1890.1466 3X1 18 .75 0.104166667 1872.0751
1X4 15 0.083333333 1888.3356 4X1 15 0.083333333
1873.8783
1X8 7.5 0.041666667 1884.716 8X1 7.5 0.041666667 1877.4874
1X16 3.75 0.020833333 16X1 3 .75 0.020833333 1879.2933
1882.9076

Trend termination point: Gann angle

also helps us in identifying the trend and
the trend termination. 1 X 4 or the 4 X 1
angle price point cross over is known as
the preliminary trend confirmation points
for uptrend or downtrend. However, the 1
X 1 angle price resistance crossover
signals the strong up trend break out and
the 1 X 1 angle price support break
considered as strong down trend break
out. in gann angle concept we assume all
the trend action will terminate at 1 X 16
112
Gann's Method Gann Angle and gann dynamic
or 16 X 1 angle principles
price point.

113
Garın's Garın Angle and garın dynamic principles
Method

Dynamic gann square of nine

principles: Using the volatility we can
make any gann method dynamic. in gann
square of nine prin ciple, we need to derive
the uptrend price points in the wheel by
adding the step to the lowest number and
each higher number in the wheel will be its
preceding number added with the step.
Similarly the downtrend price points will
be calculated by subtracting the step from
the highest number. Step is noth ing but
the high to low price difference di vided by
81 for square of nine wheel. While using
the garnn square of nine for deriving the
short-term investment decision I found the
principle yields good result. However
when applying the same concept in the
intraday trade I did not get the desired
result which I was expecting from the
method. This is the reason why I have
thought of to intro duce the volatility in
this method.
113
Garın's Garın Angle and garın dynamic principles
Method

Now the key question is how the

volatility will find a place in this method.
As I have explained before the daily
volatility, percentage is the expected
price fluctuation. Hence, now we will
take the expected price fluctuation to
derive the steps. Consider the same
example of SBI given in page 105. The
daily volatility percentage is 1.5266,
expected price range is Rs 28.12, and the
last trade price is 1842.25.

Step will be 28.12/81=0.347160

Seed number will be 1842.25+0.347160

this will be the 1st number in the square of
nine wheel. Second number will be 1st
number added with 0.347160. Likewise
the 81s t number will be 80th number added
with the 0.347160 and this must be equal
to 1842.25+28.12=1870.3732

114
Garın's Garın Angle and garın dynamic principles
Method

Dynamic gann square of twelve

principles: The way i have done the square
of nine dynamic in the same way I will
make the square of 12 dynamic. I will use
the daily volatility percentage to find the
price range for the day followed with I will
calculate the steps by dividing the price
range with 144. The seed number in the
uptrend will be the last trade price added
with the step and the 144th number will
be 143r d number added with the step.
However do remember the square of 12
wheel is a different from the square of nine
wheel in many aspects the arrangement of
numbers are also different. The downtrend
price points will be calculated by the way
of subtracting the step from the last trade
price.

While using Dynamic Square of nine or

dynamic square of twelve wheels keep a
close eye on the annual volatility

115
Garın's Garın Angle and garın dynamic principles
Method percentage. Annual volatility is nothing but
the daily

116
Garın's Garın Angle and garın dynamic principles
Method

volatility multiplied with square root of

365. If the annual volatility is above
40% use the square of twelve wheel else
use the dynamic square of 9 for making
the intraday trade decision.

117
Gann's Method Garın Tools & Techniques

Chapter- 7

Gann Tools & Technique

7.1 Introduction

7.2 Gann line

7.3 Gann fan line

7.4 Gann's technique in a scratch

117
Gann's Method Garın Tools & Techniques

118
Gann's Method Garın Tools & Techniques

Chapter- 7

Gann Tools & Technique

7.1 Introduction:

in this chapter we will discuss few

Gann tools and its use. Also we will
discuss some of his rules for
estimating the support and resistances
with example. We will relate his idea
with real life example.

Many s/w programmes support many

different tools on Gann. The
commonly available ones are Gann
fan line, Gann line.

119
Gann's Method Garın Tools & Techniques

7.2 Gann line:

"Gann line is a trend line drawn

from any extreme price point having
45° slope, with the y axis (time axis)
". it is a very simple tool based on
the Gann's theory. 45 degree is 1/8
of a circle, the sum of all the
numbers in our decimal number
systems of O, 1, 2, 3, 4, 5, 6, 7, 8,
and 9 is 45. Since 45° slope play an
important role to identify the price
movement but as per your
requirement you can change the
degrees to 60, 75 or even to 22.5
degrees.

Below mentioned is a chart of SBI.

I have drawn a Gann line on the 3
April 07 low 915. That is
represented at point A.

120
Gann's Method Gann Tools & Techniques

121
Gann's Garın Tools & Techniques
Method

All the points in the Gann line present the

resistance points that are represented as
point B and C. If you are using the
intraday chart place your Gann line in
the swing low or swing high point of the
5 minutes chart. 2 minutes chart is also a
better option.

How to take a trade decision using this tool?

Gann has specified that in anormal market

45 degree plays an important point of
resistance. He says that buying is always
advisable after the 45 degree angle line
resistance cross over and se11ing below
the
45 degree line. During his time
sophisticated computer program was not
available to use this but now a11 most all
the s/w support this tool.

What you need to do is just select the

122
Gann's Garın Tools & Techniques
Method tool and place in any of the swing high
or low point. in a less volatile market
change the

123
Gann's Garın Tools & Techniques
Method

angle to 22-1/2 degree instead of 45

degree. Now take your vertical pointer to
any future [Link] will display the future
resistance point for you. Buy if the price
crosses this resistance. Se11 if it
maintains below this resistance level.

Better practice will be placing three Gann

lines having angles 45° as centre line, 60°
as upper line and 22-1/2 degree as lower
line . Initiate a trade on 45° prices cross
over for target 60° and stop loss wi11 be at
22-1/2 degree point. This technique works
well in intraday chart also.

in the below mentioned picture A

represents 60 degree line, B represents 45
degree line and C represents 22-1/2 degree
line.

One thing you need to remember is as per

the gann's principle the shorter time period
123
Gann's Garın Tools & Techniques
Method for which the swing will be valid is 3 days

124
Gann's Garın Tools & Techniques
Method

for daily price chart, 3 weeks for weekly

chart, and 3 months for monthly chart.

While using this technique, I found in a

daily chart that if I am using it for weekly
swing low or high point then for the
future week it is very much valid but not
for the longer time duration. The reason is
in the future week it will make new swing
high
and low. If you happen to be a user of
'Elliot s wave' then apply it in wave TWO
swing low. it will be valid till wave FIVE
swing high. You will find more about
Elliot's wave on my book on technical
analysis volume 1.

125
Gann's Method Gann Tools &
Techniques
,, r ,· ı T T ILJ ·

0 [Link] l I • Time: pr/0 07 Open:979.400 High:979. 00 Low:922.350 Close:930.500

S Vol:1133000.0

125
Gann's Method Gann Tools &
Techniques

7.3 Gann fan line:

"Gann fan are the 9 trend lines

converging from one swing point either
high or low". These nine lines are 1X8,
1X4, 1X3, 1X2, lXl, 2Xl, 3Xl, 4Xl, 8Xl
of gann angle. I have already explained
about Gann angle in chapter-1.

126
Gann's Method Garın Tools & Techniques

Above picture represents the Gann fan

line. Each angle is given in retracement
term. For using this tool you need to place
it in any extreme swing points. Then place
the vertical price ruler in any future date or
time. it will display 9 resistance and
support points. lXl is represented as 45
degree. Buying is advisable if price moves
above the lXl trend line for target 1X2 and
its higher order. Stop
loss will be 2Xl or its lower order.

Caution: - Don't use this tool for longer

time period swing low or high. If the price
expands to a wide range for longer period
it may yield wrong result. in daily chart up
to 2 months data, it will produce accurate
result. Use this tool in 5 minute and 2
minute data for intraday. it produces
wonderful result.

127
Gann's Method Garın Tools & Techniques

7.4 Gann's technique in a scratch:

1. W.D. Gann devises the market into 4

Parts. They are Bu11 Market, Bear
market, Bu11 market reversal, Bear
market reversal.

2. At least three consecutive period of

rise or fa11 should be taken for trend
confirmation whether it is a bu11, bear
or reversal.

3. Gann has specified not to trade in the

3r d time period of the trend since
bigger swing in price is expected in that
time period.

4. Square of numbers and 50% of the

difference between those squares are
significant supports and resistances, but
cannot be traded by themselves.

128
Gann's Method Garın Tools & Techniques

5. There are 6 mathematical proofs for a

support and resistance.

a. Angles from top and bottoms: If the

previous swing high / low price and the
current high and low placed in the same
angle then the current price act as a
resistance or support . Based on this
rule gann line is defined.

b. Angles running horizontally i.e. the

previous tops and bottoms:
These are the price points where the
previous swing high or low price
touched in any future time.

c. Time cycles (vertical angles) : If

there are three or four days of sideways
movement after a high day and this is
followed by a down day with high

129
Gann's Method Garın Tools & Techniques

volume where low is lower than the low

of the sideways movement then the low
of the sideway movement act as a point
of resistance.
d. Crossing of important angles originating
at zero. These are the 0,360,720 etc
considering the 1 at the centre of the
gann wheel. For any price its 360,720,
offset angles as discussed in earlier
chapter are considered as the major
supports and resistances.
e. Crossing or coming together of angles
from double or triple tops or bottoms.
Any price squares with the price of
double top high, triple top high, double
bottom low andtriple bottom low are
potential resistances and supports.
f. Squaring of time and price. Under this
more than 5 techniques we have
discussed in the earlier [Link]
can refer the respective chapter.

130
Gann's Method 34 intraday trading
techniques

131
Gann's Method 34 intraday trading
techniques

132
 Method 34 intraday trading

Intraday trading techniques

1. Intraday Beta Decoupling strategy
Introduction: This is the method to which I
trust a lot. I do not say this is a full proof
method. However the accuracy or probability of
success of this method is 60 to 70 %. This is my
self-innovated trading technique. No one ever
before has presented this technique. If you are
one of the readers of this book then you can
assume that only through you like people this
technique will spread to others.

'Beta' of a security is known as the sensitivity of

the security towards the index movement. For
example - a security is having beta as 1 means
each one rupee change in index will impact Rs 1
/- in the security. When I looked into the formula
of beta I found that it has used two functions from
statistics named as covariance and variance. I
have expanded my thought to establish the beta
relation between two different scripts, between
two different indices, between more than two

133
securities from one index and so on. Why it is a
valid

134
Gann's Method 34 intraday trading
techniques
mathematical technique? My first argument is
that 1 have not changed the very definition of
beta.

Secondly as a student of mathematics I knew in

statistics an the methods which never corrupt the
original data is considered as a valid technique.

in this chapter I am going to demonstrate that

how mathematica11y you wi11 compute the beta
and how to take the trade decision when beta
starts decoupling. What is decoupling? in my
words it is the simple deviation from the historic
occurrence. For example: lf I wi11 say "in
Chennai city every year in the month of August
15 days used to be rainy days". in any particular
year if the above statement is proved wrong then
you can say it is decoupled.

in the context of capital market the decoupling

phenomenon is quite similar to the above
example. However decoupling is also a true
phenomenon in capital market. Example : lf l

135
Gann's Method 34 intraday trading
wi11say that the ICICI techniques
bank and HDFC bank
pair beta is 1.25 that

136
Gann's Method 34 intraday trading
techniques
means each Rs1.25 change in ICICI bank will
bring Rs1/- change in HDFC [Link] is not
true always. Some times it will deviate or
decouple and hold for the future days also. While
implementing this concept into action I will
follow a different approach.

in the subsequent section I will demonstrate

examples to explain this concept.

Beta Interpretation: The mathematical

definition of beta is "Beta is defined as the
change in the portfolio value with respect to the
index value". You can interpret it in many
different ways.

a. The sensitivity of the securities in your

portfolio with respect to the index movement.
b. High beta securities yield more as compared
to the low beta securities available in the same
index segment.
But I will think in a different way to interpret it.
1. I need to devise a system of trading which

135
Gann's Method 34 intraday trading
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will be applicable for intraday

136
Gann's Method 34 intraday trading
techniques
2. To start with I will take two variables a.
üne stock available in index b. Index.
3. I will not construct a portfolio. I will take the
closing price of the stock and the index of
each variable and the stock as dependent
variable.
4. Assume this sensitivity will hold good for
the current day and we will initiate a
combination of long and short position.

in this case the key area which I am monitoring

for my trade is the "sensitivity". The change in
sensitivity or beta decoupling will provide me an
opportunity to initiate a trade and I will exit
from the trade once this decoupling phenomenon
will perish. Some time beta for the day used to
expand or decoupling phenomenon never
[Link] is the day when I need to book the
loss. But one interesting fact what I have
observed is out of each 1O experiments which I
have conducted so far I got almost 75% of the
out come are success. The remaining 25% are
the failure and not more than 2% of the out come

137
Gann's Method 34 intraday trading
has triggered the maximum techniques

138
Gann's Method 34 intraday trading
techniques
projected losses. in many critical days like
sudden 'U' tum days this method has proved its
sincerity. The major advantage of this method of
trading is the most ambiguous and hypothetical
term 'stoploss' that you need not have to fix here
for your trade.

Few words of caution you need to follow

1. The chosen stocks must not be news driven.
2. You can initiate the trade in any market
condition. However try to eliminate the
stocks whose earnings, management
interview or any sensitive information
which is going to drive the price of the
stock for the day.

Mathematical formula and calculation

procedure of Beta :
Beta is being calculated using two statistical
formulas called covariance and variance
Covariance ( independent variable,dependent varible) N
Beta=-------------x--
Variance ( lndependent varible) N -1

137
Gann's Method 34 intraday trading
techniques
Independent variable, Dependent variable =
These are the two securities or two indeces or
one index

138
Gann's Method 34 intraday trading
techniques
and one security which we have taken for
observation.
N= The number of days you will take the
observation. The ideal case will be 1O days.
How ever you can take 5 days.
Though you can be able to calculate the
covariance and variance using pen and pencil but
I will suggest you to use the Microsoft excel for
this calculation. Covariance and variance
function is readily available in Microsoft excel.

Example 1: Below I have given the 5 days beta

calculation of HDFC bank future and Bank
Nifty future from the period 27th June to 3r d July.

139
Gann's Method 34 intraday trading
techniques
lnterpretation of Beta: As I have defıned above
beta is the sensitivity of two different prices. in
the above example my beta is 0.96. in that the
independent variable is Bank Nifty and the
dependent variable is HDFC bank. The
covariance property says Covariance(X,
Y)=Covariance(Y,X). However the variance will
change if you will alter the independent variable
so as the beta. lf you have already worked in beta
then you will find some changes in my
calculation.

My 1st change is that I have not taken the

portfolio value rather taken the unit value
because my objective is to find the fluctuation or
sensitivity sitting in each rupee.

Now I am going to make my second change.

Based on the definition of beta if Bank Nifty will
change by 1 % then HDFC bank will change by
0.96 %.

Trade Decision: On 4th July 08 around 10:50

139
Gann's Method 34 intraday trading
techniques
a.m. 1 have noticed HDFC bank was trading at
995 and Bank Nifty trading at 4890 which was
2.47 and 1.66

139
Gann's Method 34 intraday trading
techniques
percent higher from its previous close.

Based on the above beta factor if Bank Nifty

changes by 2.47 then HDFC bank should change
by 2.47X0.96=2.37. Hence this is a place
where the beta is got decoupled. Now I got the
signal that at this time the probability of Bank
Nifty to come down is high and probability of
HDFC bank to go up also is high. Provided no
external factor influence both the prices.
Now I will do the weight addition that is nothing
but the net value at which I will enter a trade.
Therefore it is clear from the above argument
that I will buy HDFC bank and Sell Bank Nifty.
But what will be the value of my trade? Since I
have taken the future prices for my observation
hence it is better if I will start my calculation
from future lot size. One lot size of HDFC bank
is 200 and one lot of Bank Nifty is 25. Based on
the above price one lot of HDFC bank values
Rsl, 99,000/- and one lot of Bank Nifty value is
Rs1, 22,250/- .

140
Gann's Method 34 intraday trading
techniques
If I will sell one lot of bank nifty and buy one lot
of HDFC bank then the un-hedged portion of the
capital will be 199000-122250-Rs76750/-. If l
will sell two lots of Bank Nifty and buy one lot
of HDFC bank then my un-hedged portion of the
capital will be 122250X2-
199000=Rs45500/-.Hence my
capital risk is reducing by 25%.

The final decision at which I have arrived is that

I will sell two lots of Bank Nifty and buy one lot
of HDFC bank at the above price.

Profit and Loss Projection: To derive the

profit and loss projection I will once again go to
my school mathematics where my teacher has
taught me the problem of the ratio and
proportion.
Maximum Profit Calculation:
The difference of trade value between the two
contracts (TC) = Rs45500/-
Beta mismatched percentage is (BC) =
2.47X0.96- 1.66=0.71
141
Gann's Method 34 intraday trading
Beta Decouple Factor techniques
(BDF)= Beta -BC= 0.96-
0.71=0.25

141
Gann's Method 34 intraday trading
techniques
Trade value of dependent variable
Hedge Ratio = ---------
Trade value of independent variable

= 0.886
Non Hedged Factor (NHF) = 1-0.886 =0.114
Hedge ratio signifies that only 0.886% value of
dependent variable is hedged.
The percentage of value which is not hedged is
0.114%.

lf hedge ratio is more than one then also subtract

it from one to find out the excess hedge factor.

Maximum Profıt = TC X BDF - TC X NHF

= TC (BDF-NHF)

=Rs 45500/-X(0.25- 0.114)= Rs 6188/

This says if the beta holds good as it was in the
previous day then I will earn maximum profit of
Rs 6188/-. However if the beta starts decoupling
in the opposite direction then my profitability
will increase and it may be more than the
projected one.
142
Gann's Method 34 intraday trading
techniques
Maximum Loss: Consider that the beta
decoupling phenomenon will exist for the
remaining parts of the day at the same extent.
Hence the maximum loss will be projected from
the un-hedged component. However the loss
may expand if the beta decoupled more than
0.25%.

This is equal to Rs 45500/-X0.114=Rs5187/-.

What happened on that day? By 1 p.m. the Bank

Nifty fell to 4775 and also the HDFC bank fell
to 981. This action partially bridge the
decoupling phenomenon and result.
(4890-4775)X50=Rs 5750/-
profit (995-981)X200=-Rs
2800/- loss
Net = Rs 2950/- profit.

Conclusion: in this technique the trader is not

using the stoploss mechanism rather using the
hedging mechanism. Hence it is always
advisable to book the profit as and when it gets
realised. We will discuss more phenomenon
143
Gann's Method 34 intraday trading
techniques
actions and interesting nature of this strategy in
the following section.

144
Gann's Method 34 intraday trading
techniques
2. Intraday Index Decoupling Strategy

As I have explained above that the decoupling

is a phenomenon where the price of two
different indeces or different stocks move in
the opposite direction. lndex decoupling is a
frequent phenomenon as observed in the
capital market. in many days you will observe
that the two different indeces will behave none
sequentially. For example somedays you will
observe nifty 50 index will be 3 % up however
Nifty IT index will be 2% down on the same
day and same time. This may be due to
different internal or external factors.

a. Macro or Micro economic risks: Under

this monetary policy, inflation, interest
rate, agriculture production, government
policies are included.

b. Global risks: Crude prices, precious

metal prices, other countries' industrial
& monetary policies etc.
144
Gann's Method 34 intraday trading
techniques
Based on these two risks the index decoupling
trading method is developed.

Below mentioned are the procedures I will follow.

1. 1 will identify two different indeces which

decouple in a day.
2. 1 will identify four different most active
stocks in these two indeces.
3. 1 will identify whether the price actions in
these four stocks are trending or trading.
4. 1 will use any one technical tool to identify the
potential resistance and support points of these
four stocks.
5. lf the price actions are trending then the
probability of higher volatility is eminent and
in this junction I will form 30 % to 50%
hedge.
6. lf the price actions are in a trading band then it
indicates less volatility. in this case I will form
50% hedge or less.

in this method hedge corresponds to reduce

145
Gann's Method 34 intraday trading
capital risk. For example techniques
in a 75% hedge lf I
will buy

146
Gann's Method 34 intraday trading
techniques
Rs 100/- worth of share in cash market then I must
se11 R s75/- worth share in the same market segment
. versa.
or vice

What is the logic behind this principle? in most

of the trading days I have experienced that if the
price action is trending then traders choice used
to give the success or else it gives failure. in the
trading or the ranging market trader does the
mistake.

Example: Refer the IT index and the Nifty index

price chart on 14th August 2008 as given below.
You will1 find in many occasions during the day
when the nifty was drifting down and IT index
was going up.

146
Gann's Method 34 intraday trading
techniques
Online Index Chart ......,'"' ....,,..

S&P CNX NIITT: 4430.70 14/08/200815:49".32

4529. 1 5 5
4:
(Pı
4518 .'IO

4507 .65

[Link]

4486.15

4475.'IO

4464.65

[Link]

4443.15

4432.'IO

4421.65
OQ:5 3:23 10 :59 :39 12 :07 :28 13 :28 :2 9 14 :3 4 :1 16 :00 :4'
2

Online Index Chart ""' 1( 1111"'" '" '

CNX iT : 3907.40 14108/200815:58:56

3942.65

3933.80

3924.95

3916.10

3907.25

3898.40

3889.55

3880.70

3871.85

3863.00
3854.15 3.5
(Prev. Close)

09:53:23 10:59:39 12:07:28 13:28:29 14:34:1 16:00:44

2
Lefl c li ck and drag mouse to sel eet range, release to zoom in. Right click to zoom
out.

147
Gann's Method 34 intraday trading
techniques
How to interprete the decoupling phenomenon?

This decoupling is due to the base currency rupee

depreciation for IT index and Inflation fear for
other domestic sector. You can say this pricing
action is due to the combination of local and global
factors. However these factors will not dominate
my analysis as I will proceed further. And as per
my initial observation of first one hour of trade I
found that both the indices are of trending nature.
1 made a random choice of Satayam computer
and Infosys in IT index and SBI & DLF in the
Nifty segment. You can say these four stocks are
the key movers and draggers of both the indices.
You can take any stock of your choice but keep
in mind that stocks of your choice must have
some dominance on the index on that particular
time. 1 will enter the trade in the dominance
period and exit the trades once I will observe the
decoupling is vanishing. 1 will use my Gann
calculator for estimating the support and
resistances of these stocks. Below are the
intraday price charts of these four stocks I have

148
Gann's Method 34 intraday trading
given for reference . techniques

148
M
Gann's Method 34 intraday trading
techniques
All these four counters what I have ehosen for
the observation also exiting the trending nature
as exhibited by its pear index and also has the
dominance in the index on that particular day.

Based on the 1O a.m. to 11 a.m. high and low of

these four stocks I have identifıed the support and
resistances of these four stocks using the Gann's
price to price squaring calculator. You can use any
technical tools to identify the current support and
resistance. You may use the MACD and Bollinger
band also for identifying the current support and
resistance.

Price Observation Table

10 a.m to
High Low Resl Res2 Res3 suppl supp2 supp3 11:30 a.m
DLF 529 512 523 535 558 517 506 484 513.6
SBI 1524 1487 1506 1526 1565 1504 1485 1446 1487
INFOSYS 1667 1644 1664 1685 1726 1645 1626 1586 1666
SATYAM 414 407 417 427 448 404 394 374 414

153
Gann's Method 34 intraday trading
techniques
From this observation and the current price I
come to the conclusion that I will form the 30%
to 50% hedge on these four counters. Based on
the current price I will decide the long and short
positions.

in my 1st pair of SBI-DLF I found SBI seems to

be weaker as compared to the DLF because SBI
is trading just above the support 2 whereas DLF
just below the support 1. Hence I have decided
to sell SBI one share and buy DLF one share at
11:30
a.m price. in price term also this long and short
trade is 34% hedged (i.e. 513.6/1487
X100=34.50%). Now come to the second pair
lnfosys-Satyam computer, where lnfosys is just
above its resistance level 1 and satyam
computer is just below its resistance level 1.
This seems lnfosys looks stronger than the
Satyam computer at this moment. 1 will decide
to buy lnfosys 1 share and sell Satyam
Computer 1 share at 11:30 a.m. price. Below
mentioned are the trades I have initiated based
154
Gann's Method 34 intraday trading
on the index decoupling method.
techniques

155
Gann's Method 34 intraday trading
techniques
Trade table
Buy Quantity Sell Quantity Net
DLF 513.6 1X X 514
SBI X X 1487 1 -1487
INFOSYS 1666 1X X 1666
SATYAM X X 414 1 -414
279

Around 12:30 p.m I found that both the index

are moving in the same direction and the
decoupling phenomenon is ending. At that time
prices of DLF, SBI, INFOSYS and Satyam
computer was trading at 511, 1487, 1673 and
413 and my net trade position was in Rs 5/-
profit. Take an instance at 1:30 p.m when the
prices of DLF, SBI, INFOSYS and Satyam
computer was trading at 514,1479,1693 and 416
and my net trade position was sitting at a profit
of Rs32.35.

The closing prices DLF, SBI, INFOSYS at and

Satyam computer at 3:30 p.m. are
500,1455,1694,413 respectively. At this
moment my net profit is Rs 46.70.

155
Gann's Method 34 intraday trading
techniques
Conclusion:

üne interesting thing in this index decoupling

method is that the maximum capital risk in this
trade used to be very less because of the proper
balance of the long and short position. The
second assumption I made is during the day this
decoupling will never end at least for few hours
from initiation of the trade. No need to initiate
the trades in hurry. Do the proper calculation
and then initiate the trade. This strategy will
initiate loss if the decoupling phenomenon of
both indices will re-couple.

3. Intraday sector decoupling strategy

This is one of the best intraday techniques I

have ever seen. it is commonly observed that all
sectoral indices never move concurrently with
the main index. in this technique you need to
identify two different sectors which are moving
in opposite direction in a particular day. You
need to identify two stocks from each sector
156
Gann's Method 34 intraday trading
techniques
which are different in

157
Gann's Method 34 intraday trading
techniques

terms of their % price change. lnitiate the buy and

se11 trade in such a way that the net trade value
must be neutral.

4. Intraday stock decoupling strategy

it is a common observation that the liquid scripts

or the momentum scripts act or react sharply with
respect to the market moment. in this method we
need to identify the two momentum scripts that are
having the same directional movement in terms of
%. in this method volume plays an important
role. You need to look into the trader volumes of
both the scripts. The higher volume script you
need to make 2 times of weight addition as
compared to the 1 time weight addition in the
lower volume script. But keep in mind at any
point of time your capital surplus must not
exceed the 40% of your tradable capital.

157
Gann's Method 34 intraday trading
techniques
5. Price Squaring Technique

Gann has specified that the price movement of a

stock is harmonic in nature and follows the
geometric laws. Second most important thing as
he has mentioned is that once the price trend
completes one geometric formation it is called
squaring. After this squaring action the new
trade determines the new geometric formation.
This price time action can take a shape of any
geometrical figure available in the universe.

Gann has also explained in his square of nine charts

; how the natural numbers associated with each
other through some angle relation. This thing I
have explained in the 1st chapter of this book on
"Gann's method".

Swing high is the highest price from where the

price will retrace back with higher volume.
Swing low is the lowest price from where the
price will retrace back with higher volume.

158
Gann's Method 34 intraday trading
techniques
in this intraday trading method I will be using the
primary method of Gann square. Take the mid
point of the swing high and swing low and calculat
the 15 degree up from or down to the price range.
The 45, 90 degree price line will act as the
major support and resistance for the move.
Hence it can be treated as the trend turning
points or the trailing stop loss point.

in this method the 360 degree price projection

will be treated as the final point for the squaring.

This technique is being used in our online

intraday calculator available in
[Link]. How to make best use
of the calculator I am explaining below.

159
Gann's Method 34 intraday trading
techniques
Gann Calculator Explained

lntroduction: Gann calculator in the initial days

of its introduction got very good response from
the traders and investors. Many experienced the
benefit of this calculator and shared their
experience and difficulties. 1 am going to
describe an these aspects in this section. it is an
authentic tool and its construction-base-formulas
you can get from this book. As I have said to all
my readers and seminarians earlier that it is not a
secrete tool. it is the simple mathematical
formula as given by [Link] and I have just
simplified and used it for developing this
application. 1 feel it is the need of the time for
me to explain how to use this calculator with
some examples.

Swing Trading: Swing Trading is the base and the

mother of this calculator. in my words the defini
tion of Swing Trading is "trade in the direction of
the price movement ".

160
Gann's Method 34 intraday trading
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Price movement ofa stock as explained by Gann

160
Gann's Method 34 intraday trading
techniques
and Elliot follows the harmonic motion. one step
forward I will say that it follows the random
Brownian motion. Who determines this motion?
The traders or the investors determine. The
behav iour of a trader or investor is again driven
by the fear and confidence. I will not use the
word greed in this context. As a swing trader you
need to fınd out the price points which generate
fear or confi dence. These are the points I can
name as swing turning points or resistance and
support points. Though this is a complex job but
now a days it is getting simplifıed by the use of
s/w tools. Gann's calculator does the job of
calculating these swing turning points which I
have named as the resistances, supports, buy
entry, sell entry points.

Gann calculator: The swing 2 support and

resistance point which I belief as the decisive
point for a buy or sell entry, is being named
as buy entry and seli entry in the calculator
respectively. in gann's calculator I have used the
square root formula and degree to factor the
formula for calculating the different supports and
resistances.

161
Gann's Method 34 intraday trading
I have taken 180 degree techniques
factor as 1 and based
on
this in every 15 degree and its multiple I have
calculated the resistance and [Link] must
ask me why 15 degree and its multiples?
Considering one full day as 24 hours and one
cycle as 360 degree I found each one hour in a
day is 15 degree. My second argument is -
elementary mathematics says that 1 degree as 4
minutes hence one hour is 15 degree.

You must ask me why should I belief on the last

hour's swing high and low for forecasting the future
price? in many statistical tools like MACD,
Bollinger band or finding the chart patterns you are
using much older data points. Even in intraday
chart if you are using these tools then without your
knowledge you are using many past data points.
Hence it is nothing wrong in using only two
dynamic swings high and low data points in this
calculator.

How to use it? Take past one hour's swing high

and low as input it will calculate the resistances,
support and key resistance and key support levels.

162
Gann's Method 34 intraday trading
techniques
The buy entry and sell entry prices calculated by
the Gann Calculator are nothing but the

Swing 2 resistance and support points. in less

vola tile day you may encounter the congestion.
Con gestion is nothing but the buy entry and sells
en try prices will be placed very near to each
other say with Rs 2/- to Rs 3/- difference. Same
also you can encounter in the resistances and
supports. in this case change your swing high and
low points to a wider one or make the buy entry
or sell entry above or below the 1st target point or
trade between the band means between any two
resistances, sup ports, and stoploss points. Make
a practice to change the swing high and low
points time and again in every one hour. lf your
position runs in profit then use the trailing
stoploss technique to maximise profit.

This calculator is working and I have hundreds

and thousands of proof for that. lf you feel that
why 1 am sharing this wonderful tool with you
then I have the simple answer that knowledge is
God gifted and
1 want to share with you. it is up to you to accept
it 163
Gann's Method 34 intraday trading
techniques
or not. Critics will never stop. me sharing the
knowledge with any one. I will advise if-any one is
getting pained by my act of sharing then better
stop thinking about this calculator.

My way to identify the swing high and low:

You can follow any one way for identifying the

swing high and low.
1. High and low price in a particular time
frame. The minimum time you must take
for the observation is one hour.
2. Take the previous days last hour high and
low for next days 1st hour trade provided
global sentiments must be neutral during the
non trading hours of our market.
3. If the current price action of the script is
trending then take the low or high follows
the trend high or low.
4. If you encounter congestion then take the
high and low in greater time interval.

Now see some examples which I feel will thrill

you. I will also explain how you will enter a
trade.
164
Gann's Method 34 intraday trading
Example 1: Consider thetechniques
Nifty spot one
hour
data from 1O to 11 a.m on 12t h August 2008. lts
high was 4634 and low was 4598.

Using this data in the intraday calculator I found

that my key supports are 4600-4566-4498 and
resistances are 4631-4666-4735. You can use this
data in the calculator and test its accuracy.
At 11:05 a.m. it has fallen and found support at
4565, 11:30 a.m. it touched high 4599 and fallen.
Hence it is confirmed in the next half an hour
nifty was very much within the band of my
calculated support 1 and support 2.

From trading point of view if I miss the chance to

enter the short trade at 4611 then better in this
junction I will wait or change my data points.
Second observation is the bounce from the low
4565 failed to cross the 1st support 4600. So now
the support turns into resistance as per basic
technical analysis concept for next half an hour. in
this junction also I can go short with my initial
stoploss as 4611 and second stoploss as 4631 and

165
Gann's Method 34 intraday trading
target as techniques

166
Gann's Method 34 intraday trading
techniques
4565. See in the next half an hour nifty created
new low of 4557 at 11:52 a.m
in this example I have used the past one hour
high and low points for my observation and
calculated all the resistance and support values
for the next hour. it is not guaranteed that I will
achieve my target or stop loss in the next one
hour. it is just a mathematical assumption based
on my observation. I will suggest all of you to
treat this calculator as an alternative software
tool as you treat all other indicators and tools.

Example 2: Consider Reliance industry high

and low in a time period from 1O a.m. to 12
p.m. On 13t h August 2008. it was a
trending day for Reliance because it was
creating higher high and higher low. My
Swing high and Swing low for this two hour
period is 2353 and 2315 respectively.

167
Gann's Method 34 intraday trading
[Link] Line techniques
.. Moving Average .. 15 Refresh News Help
0&/13.ı1l815:59 0=2336.85 H=2336.85 L=2336.85 C=2336.85 V=3252519.0
1=2336.849
2370.0
2365.0
2360.0
2355.0
2350.0
2345.0
2340.0
2335.0
2330.0
2325.0
2320.0
2315.0

2.0m
1.0m

10: 11: 12: 13 14: 15:

ı in Out il ıntraday ..

Using these two values on the Gann calculator I

got the following values:

Long entry price was: 2331 target 2339-2347-2363-

2412
Short entry price was: 2337 target 2329-2320-2304-
2256

Since it was a trending market for RIL and it was

creating the higher high and higher low and the
current price is much above my second target
167
Gann's Method 34 intraday trading
point and trending upward. Itechniques
will use this swing
action to enter a buy trade keeping my 1st stoploss
as 2339 which is my key resistance, which turn into
the support and my target will be 2363. I will come
out of the trade at 2363 or slightly below that
because this is the 3r d level of target and
important resistance point.

Again I have observed that after touching the

high of2373.65 the price has started retracing
back. Now I will change my swing low and high.
The low as 2339 and high as 2373.65. The stock
price 2339 is the low which the stock has made
just before making this high of 2373.65. You can
say this is the high following the low. Notice it
carefully I have not taken the hourly high or low
rather I have taken the latest low preceding the
high.

Why this deviation in principle? If the current

price action is against the previous trending
nature of the price then you need to make this
deviation. in the second case scenario if the price
continues its trending behaviour then also this
168
Gann's Method 34 intraday trading
deviation in principle will come into focus.
techniques

169
Gann's Method 34 intraday trading
Using these two values techniques
2373.65 and 2339 I got

Short entry price was:

2358 Long entry price
was: 2355

This is congestion because the difference is only

Rs 3 /- so now I will shift my focus to the 1 st level
of target for both the long and short. As per my
calculation 1st long and short targets are 2363 and
2349. These two prices will act as my new long
entry and short entry points. More precisely I will
buy Reliance above 2363 and sell below 2349.
My stoploss for the sell entry will be 2358-2374-
2398 and stoploss for buy trade will be 2355-
2339-2314

Observe the second part of the calculator which

flags the important support and resistance points.
My entry points also coincide with the 1st level of
resistance and support.

As you can observe from the chart at 12:35 p.m

after drifting to the level of 2362 the stock has a
169
Gann's Method 34 intraday trading
minor bounce back to 2366 and the
techniques greater
downward action started once it has broken the
level

179
Gann's Method 34 intraday trading
of 2349. My target level of techniques
short entry was
2342-
2326-2277. You can say it as a coincident or a
mathematical wonder.

1. At 1:30 p.m. stock touched 2341 and

bounced back to 2349 level.
2. At 2:20 p.m. stock touched the day's low of
2326 level.

Though Gann's other method is to calculate the

time action but it is beyond the scope of this
calculator.

Conclusion: This Gann's calculator is a

mathematical application. it is being developed
using the price to price squaring action of
Gann's method. it is my advice to all the traders/
investors to treat this application as an
informative and educational tool.

189
Gann's Method 34 intraday trading
6. Hexagon Price Squaringtechniques
Technique:

Hexagon price chart is another form of Ganns

square of nine charts. Here we have taken the
geometrical figure as regular hexagon. in
regular hexagon structure all the sides are of
equal length. The total internal angles of the
regular hexagon are 720 degree. Since all the
sides and the internal angels are equal each
internal angle will come to 120 degrees.

Now in Gann's hexagon chart numbers will be

arranged in their incremental order in such a
way that the number of digits in the 1st spiral
will be six, 2n d spiral it is 12 and 3 rd spiral it is
18 and like ways in the Nth spiral it is NX6
numbers.

The hexagon number arrange also show the

interesting properties. Each higher number in
the main diagonal or the horizontal and vertical
cardinals are associated with each other at an

171
Gann's Method 34 intraday trading
angle of 1.75 . Considering 180 degree
techniques as 1 I
have derived

172
Gann's Method 34 intraday trading
techniques
that each higher number is associated with each
other at an angle of 315 degree. 315 degree is 7
multiple of 45 degrees and 21 multiple of 15
degrees.

Hence I will conclude that in hexagonal spiral

arrangement the numbers in the main diagonal
with an degree relation of 315 and its multiple
will act as the main resistance and support. At
the same time it will have 21 minor supports and
resistances and 7 major supports and resistances.

Example: On 12th November 2008 at 10:50 a.m

nifty swing low was 2863 and high was 2958.
As per the Gann hexagon price chart the squaring
will happen at 3053 in upside and 2770 in down
side. This value I have derived by using the square
root formula and degree factor as 1.75. 3053 and
2770 will fall in the main diagonal of the hexagon.
This will also consider the termination points of
one hexagonal spiral.

The 7 important support and resistances will be

173
Gann's Method 34 intraday trading
techniques
Resistance Support
2889.816 2930.869
2916.75701 2903.863
2943.82301 2876.981
2971.01402 2850.225
2998.33002 2823.594
3025.77103 2797.088
3053.33703 2770.706

How to trade using this support and resistance

points?

Quite simple. use the mid point theory to

identify whether the trend is up or down?
(2863+2958)/2
= 2910 . I have the resistance placed at 2916 and
uptrend price is placed above 2910 hence I will
buy nifty above 2920 for the initial target of
2931, 2943, 2971. My stop loss for this move
will 2904- 2877-2850.

Same way my support is placed at 2903 and

down trend trigger price is at 291O I will sell
nifty below 2900 for target 2890-2877-2850.

173
Gann's Method 34 intraday trading
At 11:1O a .m I found nifty at 2920 and initiate
techniques a

174
Gann's Method 34 intraday trading
buy order. The above swing techniques
high and swing low
happened with a time interval of 45 minutes.

Hence nifty is expected to complete the cycle of

achieving the target 2931 or touching the low of
2890 before 11:35 a.m time. This is 45 min from
10:50 a.m.

Refer the price at 10:32 a.m in the nifty future

intraday chart. I touches 2930.56 and from there
it has fallen to 2892 at 11:40 a.m

175
Gann's Method 34 intraday trading
techniques

Above price time chart is given for your reference.

175
Gann's Method 34 intraday trading
techniques
7. Price and Time Squaring Technique

Like price, time also is an important parameter

for the trade decision. Time is easily converted
to the degree format using the degree and time
relation as explained in the chapter 1. it is a very
rare and interesting phenomenon. If the price
in degrees and time in degrees are equal then we
will say it squares with each other. If such a
scenario happens then we can say the future
event is going to happen as per the time count
but not as per the price count.

Now take the same example as nifty where the

swing high is 2958 and low is 2863. This
phenomenon happened with a time interval of 45
minutes. Hence the price changes of 2958-2863=
95 units happen in a time interval of 45 minutes.
This translates to 2/1 angle price time squaring
action. This means each 2 unit of price change
happen in 1 unit change in time. 2/1 angle in
degree terms will be 26.25 degrees. Hence the
prices which will be the resistance for the move
will be calculated from the 26.25 degrees and it's
multiple as given below.
176
Gann's Method 34 intraday trading
techniques
Resistance Support
2878.6239 2942.162
2894.30108 2926.355
2910.01004 2910.602
2925.76152 2894.892
2941.56635 2879.213
2957.40289 2863.588
2973.28194 2848.005
2989.21444 2832.453

I will conclude that from one resistance cross

over to another resistance it will take 8 minutes
for me based on the 2/1 angle assumption.

Take any two arbitrary points say I have chosen

2957 and 2973. At 12:15 p.m. nifty cross the
resistance 2957 and found support at 2959 hence
after 8 minutes from here I must see nifty at
level of 2973 or at 2942.

See the miraculous power of this method. At 12.23

p.m. nifty was trading at

2973.60 How to initiate a trade?

Same logic of mid point method we have to follow.

177
Gann's Method 34 intraday trading
techniques
For my choice of resistance 2957.40289
supports will be 2942 ( this point is the
resistance turn to support)

Mid points = 2957+2942/2 =2950. The current

price is much above the mid point of 2950 hence I
will go long in nifty with target 2973 and stop loss
2942. in case it fails to achieve the long target and
stop loss is triggered I will enter a fresh short
position below 2942 with stop loss 2957 and target
2925.

The most important point you must remember is

that the price point of your choice must be a
swing turning point.

178
Gann's Method 34 intraday trading
techniques
8. Zero angle trading technique:

This is the simplest intraday trading technique 1

can say. in a spiral whether it is a circle or
rectangle or hexagon we need to start at some price
and other prices are in the incremental order of this.
lf we place 1 in the square of nine table and other
numbers in the incremental order then all the
numbers lying above the number 1 are called O
angle number. This means the old spiral will end
there and the new one will start.

As per gann's method each price is considered as

the energy point. Being the first person to
develop the swing trading method he has
contributed a lot to zero angle concept.

in this method select any strong point in the

price chart as the zero angle price point and form
a spiral with an incremental order of each 2
rupee change in one time unit or decrement
cycle of 1 rupee in 2 time unit. The prices falling
in the zero angle line will be considered as the
swing turning point of the trade.
179
Gann's Method 34 intraday trading
techniques
Take the same example of nifty as given above
swing low as 2863 and swing high as 2958.

lf I will arrange the numbers starting from the

2863 incremented by Rsl/- on the Gann's
hexagon chart then 2863-2870-2883-2902-2927-
2958-2995 will
be the resistance for the up move and fall in the
zero angle line. Same way taking 2958 we will
get 2951-2938-2919-2894-2863-2826-2783 are
the
supports for the down move.

Below is the intraday chart given for your reference.

180
Gann's Method 34 intraday trading
11:42:55 12:10: . .- ;.2:38:16 13:04:33 13:30:53 techniques
13:57:1014:23:26 14:49:42 15:15:59

180
Gann's Method 34 intraday trading
techniques
The days low nifty future has hit is 2789 and high
is 2985 which is very close to the resistance and
supports we have calculated.

How to enter a trade? in this I will not follow the

mid point logic. 1 will enter the short trade if the 2n d
support is broken and vice versa. in the above
example I will buy nifty future above 2958 for target
2995 and stop loss 2927. Same way I will sell nifty
at 2938 for stop loss 2951 for target 2919

9. Green angle trading technique:

As per Gann method the 2/1 angle is called green

angle and the 1/2 angle is called the red angle.
The degree notation is 2/1 angle is 26.25 degrees
and 1/2 angle is 63.75 degrees. The sum total of
2/1 and 1/2 is 90 degrees.
in this green angle terminology from any swing
point you can derive the resistance and support. lf
the price trade above the swing turning point then
buy it or else [Link] nifty price at 1 p.m. ,
the swing turning point is 2937. The green angel
price
181
Gann's Method 34 intraday trading
is derived as (Square root (2937) + 26.25 degree
techniques

factor)2 =2953
The red angle price is derived as (Square root (2937)
- 63.75 degree factor) 2 2898
Now based on this assumption I will buy Nifty
future at 2953 with stop loss 2937 or sell nifty
below 2898 with stop loss 2937.
Forthe buy trade target will be (Square root (2953)
+ 26.25 degree factor)2 =2969
For the sell trade target will be (Square root (2898)
- 63.75 degree factor)2 =2860

in this method the entry point is being

determined from one price point.

At around 1:10 p.m I got he nifty future at 2953

and enter the buy trade at 1:30 p.m I got the
target achieved. As you will observe from the
chart at around 1:32 p.m after touching the high
of 2972 nifty started falling .

Timing the trade? in this method you can time

the [Link] price point of my observation 2937

182
Gann's Method 34 intraday trading
techniques
is a price point from 12:30 p.m to 1.05 p.m.
where I got maximum volume get transacted.
Hence in 35 minute of time unit I got this
swing
point.
Since my entry and exit points are being derived
from the same swing point, I will achieve the
target after 35 minutes starting from 1.05
p.m. which work out to 1:40 p.m.. Same has
happened in the price chart at around 1:30
p.m this trend started reversing refer the below
chart for details.

183
Gann's Method 34 intraday trading
techniques

184
Gann's Method 34 intraday trading
techniques
1O. Triangle turning point trading technique:

Triangle is an important geometrical figure. The

sum of the internal angles of a triangle is 180
degree.

The triangle can divide the circle into 3 parts

each of 120 degrees. A hexagon can be split in to
six triangles. in this method we will take all the
prices falling on the sides of the triangle will act
as a resistance and support.
Take the case of a hexagonal spiral on natural
numbers. As given below

184
Gann's Method 34 intraday trading
in this 1&2, 8&10, techniques
21&24,41&44 forms the
triangle in the hexagonal chart.

in the real time price chart you need to identify

one swing turning points and in each 15 degree
offset create the new number in the series and the
1s t , 8th, 21st and 41 number generated from the
swing point will form one side of the triangle and
second side will be constructed by the 2n d , 10th
,24th and 44th numbers in the series. once the
triangle is constructed the trade decision will be
made at 2n d price point for 8th price point as target
and so on. Triangle is being specified as the
TRIAN by Gann. The triangle exists in the entire
Gann chart. it is one of the most important Gann
patterns for making the trade decision.

in order to simplify this method I will establish

angle relation. in hexagon chart prices projected
60 degree from the swing point is a trian
point,since the triangles bisect the internal angles
of the hexagon at 60 degrees. The stock or
commodity price is dynamic in nature hence we

185
Gann's Method 34 intraday trading
techniques
never know at

186
Gann's Method 34 intraday trading
techniques
one point of time the price will be on the
hexagon chart. However we need to derive the
prices which TRIANS the swing price.

Example: Take the swing high price of nifty as

2973 at 1:30 p.m. on 12t h November 2008.
Assuming this point as the initial point of the
TRIAN we will derive the other TRIAN point
which is 60 degree from the initial swing point.
Upper Triangle points derived from 2973
2973 54.52522 54.85852 3009.457603
3009.458 54.85852 5 5 . 1 9 1 8 2 3046.137384
3046.137 5 5 . 1 9 1 8 2 55.52512 3083.039342
3 0 8 3 . 0 3 9 5 5 . 5 2 5 1 2 55.85842 3120.163478
3120.163 55.85842 56.19172 3157.509792
3157.51 56.19172 56.52502 3195.078284
3195.078 56.52502 56.85832 3232.868954
3232.869 56.85832 57.19162 3270.881801
3270.882 57.19162 57.52492 3309.116826
3 3 0 9 . 1 1 7 57.52492 57.85822 3347.574029
3347.574 57.85822 58.19152 3386.25341
3386.253 5 8 . 1 9 1 5 2 58.52482 3425.154968
3425.155 58.52482 58.85812 3464.278704
3464.279 58.85812 59.19142 3503.624618
3503.625 59.19142 59.52472 3543.19271
3543.193 59.52472 59.85802 3582.98298
3 5 8 2 . 9 8 3 59.85802 60.19132 3622.995427
3622.995 60.19132 60.52462 3663.230052
3 6 6 3 . 2 3 60.52462 60.85792 3703.686855
3703.687 60.85792 61.19122 3744.365836

186
Gann's Method 34 intraday trading
techniques

L o w e r T r i a n gl I e p o i n t s d e r i v e d fr o m 2 9 73
2 9 7 3 54.52522 54.19189 2936.761323
2936.761 54.19189 53.85856 2900.74486 5
2900.745 53.85856 5 3 .5 2 5 2 3 2864.950623
2864.951 53.52523 53.1919 2829.3786
2829.379 53.1919 52.85857 2794.028795
2794.029 52.85857 52.52524 2758.90120 7
2758.901 52.52524 52.19191 2723.995837
2723.996 52.19191 51.85858 2689.31268 5
2689.313 51.85858 5 l .5 2 5 2 5 2 6 5 4 .8 5 l 7 5
2654.852 51.52525 51.19192 2 6 2 O .6 l 3 O 3 4
2620.613 51.19192 50.85859 2586.59653 5
2586.597 50.85859 50.52526 2552.802254
2552.802 50.52526 50.19193 2519.23019 1
2519.23 50.19193 49.8586 2485.880345
2485.88 49.8586 49.52527 2452.752717
2452.753 49.52527 49.19194 2419.84730 7
2419.847 49.19194 48.85861 2387.16411 5
2387.164 48.85861 48.52528 2354.70314 1
2354.703 48.52528 48.19195 2322.464384
2322.464 48.19195 47.85862 2 2 9 0 .4 4 7 8 4 5
2290.448 47.85862 47.52529 2 2 5 8 .6 5 3 5 2 4
2258.654 47.52529 47.19196 2227.08142 1
2227.081 47.19196 46.85863 2 l 95.73l 535
2195.732 46.85863 46.5253 2164.603868
2164.604 46.5253 46.19197 2133.698418
2 l 33.698 46.19197 45.85864 21O3.Ol5186

187
Gann's Method 34 intraday trading techniques
in intraday it is difficult for the stock to
complete more than 5 spirals. in rarest occasion
the stock used to complete the sixth spiral.

From the above data I will buy nifty future

above 3009.50 for target 3946.13 or else I will
sell nifty future at 2937 for target 2900. in both
the cases my stop loss will be 2973.

lf you will observe the intraday price time chart

you will find all the calculated targets in the
down side has provided to be the very short
term support.

188
Gann's Method 34 intraday trading
techniques
11. Mid point trading technique:

in a day the stock prices can be recorded as the

open, close high and low. in rarest occasion all
the prices used to be same. in mid point trading
technique as per the Gann's method if the current
price is below the mid point of the high and low
of the trend then we can say the price trend is in
down side direction and vice versa.

Mid point method in intraday is only for the

highly speculative intraday traders. in this
method identify the swing high and swing low of
any prior trend. Find the mid point of this swing
action. Compare the current price with the mid
point to identify the trend.

once the trend is identified find the trend

termination point which is 360 degree price
range derived from the mid point and high or
low. Entry must be made at 45 degree angle
price point.

189
Gann's Method 34 intraday trading
techniques

Example: Nifty future swing low was 2863 and

high was 2958 at 10:50 a.m. finding the trade
initiation points.

The mid point is 2863+2958 =2910.5.

Say the current Nifty future at 11:30a.m is 2937

this signifies the trend is up.

From mid point to high 2958 the price range is

Rs 48/-.
Applying 360 degree factor on the Rs 48/- we
will get Rs80/- as the termination price range.

The termination price will be

2910.5+80=2990.50 The entry can be made at
the current price. But the target can be derived
using the mid point logic. For this up move my

I st target will (2958+2910.5)/2= 2934

2n d target will be (2990.5+2958)/2=2974.25
3r d target will be (2974.25+2990.5)/2 2982.37 etc
The stop loss for this move will be 2910.5
190
Gann's Method 34 intraday trading
techniques
12. Trading using the Gann angles
Gann has specified 11 different angle relations
like 1/16,1/8,1/4, 1/3,1/2,1/1,2/1,3/1,4/1,8/1,16/1
which I have already explained in the 2n d chapter.
These angles are being derived from the price
and time components. If one unit change in price
brings one unit change in time then we can say it
is 1/1 angle.

in this method take the price range and the time

and derive the relation such as the price change
and the time proportionate change. If the price
and time change relates to any of the angle
relation then take the degree equivalent or the
retracement level for the future price and time
projection.

Example: Nifty future swing low was 2863 and

high was 2958 at 10:50 a.m. finding the trade
initiation points based on the gann angle. The
price range is 2958-2863 =Rs 95/-. The time
between these two swing points are 45 minuets.
Hence it establish 2/1 angle relation. Hence the
191
Gann's Method 34 intraday trading
price and time will square with each
techniques other at
26.25

192
Gann's Method 34 intraday trading
techniques
angle relation in each 45 minutes time interval.

The termination points for this action will be

2958+95= 3053 Of 2863-95=2768

in between this range in each 26.25 degree it will

find the resistance and support derived from these
two swing points.

Resistance

2863 53.50701 53.65281 2878.6239

2878.6 53.65281 53.79861 2894.2903
2894.3 53.79861 53.94441 2909.9993
2910 53.94441 54.09021 2925.751
2925.8 54.09021 54.23601 2941.545
2941.5 54.23601 54.38181 2957.381
2957.4 54.38181 54.52761 2973.2601
2973.3 54.52761 54.67341 2989.1816
2989.2 54.67341 54.81921 3005.1457
3005.1 54.81921 54.96501 3021.1522
3021.2 54.96501 55.11081 3037.2013
3037.2 55.11081 55.25661 3053.2928

193
Gann's Method 34 intraday trading
techniques
Support

2958 54.388 54.242 2942.2

2942.2 54.242 54.096 2926.4
2926.4 54.096 53.95 2910.6
2910.6 53.95 53.804 2894.9
2894.9 53.804 53.659 2879.2
2879.2 53.659 53.513 2863.6
2863.6 53.513 53.367 2848
2848 53.367 53.221 2832.5
2832.5 53.221 53.075 2817
2817 53.075 52.93 2801.5
2801.5 52.93 52.784 2786.1
2786.1 52.784 52.638 2770.7

If the current price is 2925 then it is above my

mid point of the swing high and low and I will
make an entry buy entry for target of 2941-
[Link] this case also I will take the mid
point as my stop loss.

As per my experience the mid point stop loss

proves to be very successful
193
Gann's Method 34 intraday trading
techniques
13. Price range and time squaring technique

in the October 08 crash we made a low 2207.30 in

the nifty future on 27t h October 2008 and in
November 5th 2008 we made intraday opening high
of 3298.90 on nifty future.

The price range for this low to high is = 3298.90-

2207.30=1091.60

The time elapsed in this high and low range is 8

trading days and 1O calendar days.

Converting the above information into degrees I

got 1092 as 323,8 trading days as 284 and 10
calendar days are 344 degrees. This shows that
the price and time are not squaring. in my book
on "Gann's method" in chapter -4 as I have
described price and time are the dynamic
[Link] considering it as a static entry is
nota fair analysis. Gann has also considered price
and time as an energy [Link] it must not
be static.

194
Gann's Method 34 intraday trading
techniques
Then at this junction I may have left the squaring
phenomenon way behind which I have to hunt
now. Since I have taken the trading days,
calendar days which cannot and must not be
altered because it is less dynamic than the price.
Then the option left in my hand is to hunt for a
new swing high and low point which will be
squaring with any one of the day counts. Now
my focus has gone to the 3285 which is also a
swing high point on the 5th November 2008 price
chart. Now taking the high as 3285 and low as
2207 my new price range is 1078. The degree
conversion is 285 degree. Hence 8 trading days
is squaring with the price range with an error fact
of 1 degree which is very much accepted.

Now considering the past squaring has happened

in the 2207 to 3285 we need to find the price
range for the new square.
N(R)= (Square root of (1078)+ degree factor (285) )2
= (32.8329 + 1.5829 )2 =1184.449
Round it to 1185, now as per this method we will
have a price range of 1185 in the coming 8
trading days starting from the 6th November
2008.

195
Gann's Method 34 intraday trading
techniques
Hence in each time unit 148.125 (i.e 1185/8)) act
as a resistance and support calculated from high
and low.
Now supports calculated from the swing high
3285 are
a. 3285-148.125 = 3137
b. 3137-148.125=2989
C. 2989-148.125=2841
d. 2891-148.125=2693
e. 2693-148.125=2545
f. 2545-148.125=2397
g. 2397-148.125=2249
h. 2249-148.125=2101

Resistances calculated from the swing low of

2207 are : 2355, 2503.25, 2651.37, 2799.5,
2947.625,
3095.75, 3244, and 3392.

Now the conclusion will go as follows. On the

first day starting from November 6, 2008 I will
have resistance at 3392 and support at 3137. I
will consider the index is in up move if it

196
Gann's Method 34 intraday trading
techniques
maintains above 3264.5. Which is the mid point
of (3392, 3137).

197
Gann's Method 34 intraday trading
If it trades below 3264.5 techniques
then I will consider the
nifty is in down move.

But in the real case nifty future closed at 2991.65

on 5th November. This is just above my second
level of support 2989.

Hence for 6th November my calculation point

will be (3244, 2989). I will be bullish on index if
it opens and trades above 3116.5 which is the
mid point of my calculated resistance and
support. If it trades below that then I will be
bearish. From the opening
data on 6th November 08 till 1 p.m I got nifty
opened at 2898 and made high of 2953.

Hence I can conclude that the current price is at

my 4th level of resistance support, this is
(2947.625, 2841). However these resistance and
support points will be effective for the 8 trading
session starting from the 6th November 2008.

198
Gann's Method 34 intraday trading
techniques
You have already experienced the closing on the
5th November 2008 which is very much inline
with the 2n d level of support point calculated.
The 6t h November high also inline with the 4th
level of resistances calculated from the low.
Other data you can validate as and when it will
happen in the chart. Since I have prepared this
literature on 6th November I do not have
forthcoming data for validation.

The second most important thing this method

explains is on the 17t h November 2008 (this is 8
trading days counting from 6t h November)
where will be the nifty. Since I found the current
price moves 3 step ahead of time then the Monte
Carlo simulation process can help me to find the
most likely price forecast of the price. Since this
subject is out of scope of this discussion I can
give the predictive conclusion as i have a 70 %
chance to get 2397 level and 60% chance to
touch 3244 level by 17th of November 2008.

198
Gann's Method 34 intraday trading
techniques
14. Retracement: Retracement technique is
being derived from the Fibonacci technique.
Retracement is of two types

a. Growth retracement: If the previous trend is

down and the current trend is down then it is
called decay retracement

b. Decay retracement: If the previous trend is

up and the current trend is down then it is called
decay retracement

Both the retracement is against the previous

trend. Previous trend is an ambiguous term
which is difficult to explain. However for
intraday purpose take the previous trend as one
hour's trend. in a range bound market it is
difficult to identify the trend. Henceforth try to
avoid retracement technique.

The retracement levels or the support/resistance

levels is being taken from the Fibonacci method
wherein the support and resistance points are
199
 Gann's Method 34 intraday trading
techniques
being calculated by the help of fibonacci ratio.
Fibonacci ratios are 0.236,0.382,0.5,0.618,0.786
.

Take the nifty future 12t h November 2008 price at 1:40

p.m which was 2957 . The previous one hour trend was a
up trend and the retracement has started from high 2973
the low corresponding to this high is 2932. Hence it is
defined as a decay retracement and we will draw the
supports from the high of 2973.
0.236 2963.3
0.382 2957.3
0.5 2952.5
0.618 2947.7
0.786 2940.8
in this retracement table if the price falls below
2947 then there is little chance that the price
will bounce back from this level. This level
of0.618 is called death zone for the long traders.

How to make a trade decision?

in this decay retracement sell nifty future below
2947 with stop loss 2963 and target 2906. 2906
is the 1.618 or phi target level for this move.
200
Gann's Method 34 intraday trading
techniques
15. Parallel projection:

Parallel projection is a retracement within a

retracement. it is always better to draw the
retracement line in each new swing point in
order to identify the supports and resistances.
The rest of the procedures are same as the
retracement.

16. Trading with clusters:

Fibonacci cluster is a culmination of Fibonacci

retracement from various significant highs and
lows during a given time period.
in other words I can say if you will draw two or
more retracement lines in a closely related swing
high and low prices then you will find one
particular price which will occur in every
retracement. it is practically impossible to find the
cluster in the chart. However by taking the help of
median and mode function you will be in a position
to find out the cluster. We have provided the cluster
calculator in
201
Gann's Method 34 intraday trading
our web site [Link]..com
techniques

202
Gann's Method 34 intraday trading
techniques
in order to use the Fibonacci cluster you need to
provide three swing high and swing low price
points as input to the calculator. Cluster will
determine the most important support and
resistance for current price movement. While
choosing the inputs in the intraday price chart
take last one hour 's three different swing highs
and swing lows. Last one hour's three
consecutive swing high and swing low you need
to take for next day calculation. You can also
take any three important swing highs and lows of
the day to find the next days most sensitive
support points.

Example: On 12th November 2008 in nifty

intraday chart I have identified the
a. 2866 , 2956 b.2915,2985 c.2795,2868
are the three pairs of swing highs and lows.

Applying this on the calculator I got cluster

support at 2900 and resistance at 3002. Now for
the trading day November 13 these two prices
will act as the support and resistance.
202
Gann's Method 34 intraday trading
techniques
How to initiate trade using the cluster?

1. Follow the method explained in the midpoint

trading technique to make a trade decision.
2. Using these two points as the swing high and
low in the Fibonacci retracement method make
the trade decision.
3. Using these two prices as the swing high and
low in the Gann calculator also you can take the
trade decision.
17. Bat pattern:

This pattem is being developed by Scott Carney

in 2001. it is of two types . Bullish & bearish bat
[Link] pattem is represented below.
Bullish Bearish

203
Gann's Method 34 intraday trading
techniques
As you have seen from the above picture these
patterns can be constructed by using 5 price
points. These price points associated with each
other through some Fibonacci ratio price
relationship. By taking any price point 'X' -'N you
can derive the price point B, C, D.

once you have identified the five price points

compare it with the current price. The current
price will suggest you in which phase the price is
in. Either it is in the growth retracement phase or
in the decay retracement phase. From there you
need to derive the trade decision.

Example: Now say I have chosen nifty future

high as 2985 at 12:29 p.m and low as 2907 at
12.46 p.m. Based on these two data points I
have derived the following price points for
bullish and bearish bat pattern.

204
Gann's Method 34intraday trading
techniques
Bat Pattern

Bullish Bearish
A 2985 A 2907
X 2907 X 2985
C 2955.2 2936.796
B 2936.8 2955.204
D 2976.1 2915.892
While making the trade decision the point D is
important for me. If the current market price is
above 2976 (i.e. the point D price of the bullish
bat pattern) I will Buy nifty for initial target of
2985 and stop loss as 2955. I will sell nifty
below 2915 for initial target of 2907 and stop
loss 2936 .

it is commonly observed that if the bat

formation is broken then the target used to get
expanded unlimitedly.

You can observe from the intraday chart that

once the bearish bat pattern is broken at around
1:45 p.m the target gets expanded till [Link]
can also find the data points from one swing
205
Gann's Method 34intraday trading
point by using the Fibonacci retracement
techniques levels.

206
Gann's Method 34intraday trading
techniques
18. Crab pattern: This is also being developed by
the same person by Scott Carney in 2000. The
pattern looks like below.

Bullish
Bearish
D

X
X

Example: Say I have taken the nifty future low as

[Link] the bullish and bearish crab pattern
prices will be as given in the table below.
crab pattern

Bullish Bearish
X 2907
price 50
A 2926 2876
B 2937.9 2887.9
C 2887.9 2895.2
D 2826.1 2987.9

207
Gann's Method 34 intraday trading
techniques
If you are deriving the prices of these pattems
from one price point then you need to specify
one price range arbitrarily in order to get the
other price point

in crab pattern the A and B price is very

important. If the current market price rules
above the B point of the bullish crab pattern then
buy with stop loss at X point. The target will be
unlimited. Same way sell future at B point of the
bearish crab pattern with stop loss at X point and
target unlimited.

19. ideal butterfly pattern:

This pattern is also derived from the Fibonacci

ratios.

Bullish Bearish

D
207
Gann's Method 34 intraday trading
techniques
Some key concepts one must know about this
pattern:

A. Both X and A price must be a real swing high

or low which would have occurred in the recent
past.

B. The X price and A price must have the 0.786

relation ship between them.

C. The B and C swing point is derived in such a

way that the AB price difference must be equal to
the BC price difference.

D. D price point will be lowest among the 1.618

and 1.272 retracement level drawn from X or B.
Due to the complexity of this strategy I left it
without any example.

208
Gann's Method 34 intraday trading
20. Trade using gaps: techniques

lf the opening price of a script on certain day is

higher than the previous day's high then we used
to say that the upside gap is formed and vice
versa. The next question is how to interpret this
gap? once the gap is formed in the opening
trade, tendency of the trader is to see whether
the gap is bridging or widening. The gap is
bridged means the pre existing event (which
formed the gap) is going to end. The gap is
widening means the pre-existing trend (which
formed the gap) is going to continue.

Same tendency also hold good in the intraday 5

minutes price chart. If gap exists in the 5
minutes price chart then it signals the trend is set
and as a trader you need to swim in the direction
of the trend. in this method if the price forms
wide gap at least three consecutive times then
you must enter the trade with tight stop loss
below the 1st gap formation price. Your target
will be unlimited and not computable by any
mathematical procedure.

209
 Gann's Method 34 intraday trading
Example: techniques

Say the 10 a.m to 10:05 a.m Nifty high is 2890

and the 10.05 a.m-1O:1O a.m Nifty candles
suggests open of 2894 and high 2907, same way
1O:1O a.m- 1O:15 a.m nifty open and high
suggest 2918-2930. This suggests that the trend is
set in the upside direction and gap is forming in
the upside direction

At this junction as long trader keeping the 1st

level of gap formation point i.e 2890 as stop
loss you can buy nifty for higher target. in this
method projecting the target is not possible by
any means. Hence stick to the trailing stop loss
mechanism. Same holds good for the down side
gap formation. You can read more about the gap
on my book on technical analysis volume-2.

210
Gann's Method 34 intraday trading
21. Trade using the 'lsland reversal model':
techniques

"If the rising gap of any prior trend coincides

with the falling gap of any current trend then we
used to say that the island reversal pattern is
formed"
0 [Link] I• Tiırı:l)(tl)1m Open1061.000 High 1061.000 Loll'.10230.0-0 Close 1038.000
SMA LOG(IO)
VolS44100.0
........................................................................................................................................................................................................ 12
70,

- --·--- ·---- --- --- --- -·-- -·-- -·-- -·-- -·-- -·--
-- - -·-- -- - m

This formation can also happen in the intraday

price chart. Take the case of Gail price data
on 12t h November 2008.
211
 Gann's Method 34 intraday trading
techniques

in the above 5 minutes price chart the gap which is

formed in the 10:25 a.m to 10:30 [Link] reappeared
at the time of 1:55 p.m to [Link]. in the same price
band of 208 to 21O . This clearly indicates the
formation of island reversal pattem in Gail. Before
this formation the stock made high of 215 . Hence
the height of the island is 215-208= Rs 7/- .

Thence deriving the O.618 level from the island

high I got 215-7X0.618=210.60 will be the price
for my short entry. With stop loss as 215 and
target will be 1.618 level from the island high =
215-1.618*7 = 203.70
212
Gann's Method 34 intraday trading techniques
This is very simple to apply on the intraday chart
and rewards big return in volatile market. Only 2
Fibonacci ratios 0.618 and 1.618 is being used in
case of intraday traded decision. However other
ratios is being used in case of weekly or monthly
data analysis.
22. Trade using the Pitch fork: in Andrew
Pitch Forks method three parallel horizontal
trend lines are drawn from three different price
points in such a way that the first trend line pass
through the median point joining the second and
third price points. Other two trend lines must be
parallel to the 1st trend line. This is also called
the median line trading method.

How to identify whether the current price

trend is trending or trailing? If the opening is
higher than the previous closing , the current
high is higher than the previous high, the current
low is higher than the previous low or vice versa
then we can say it is a trending market or trailing
market. This is the simplest tool available in all
the technical analysis s/w.
213
Gann's Method 34 intraday trading techniques

0 SBIIUIS 1 ' nll'j!:Jun/29/07 Open1471.550 High1531700Low.1471.550 Close:1525.800 Vol

2963100.0 SMA

Maı/21/07 Uaı/29107 Jun/07107 Jun/15/07 Jun/2 07 Jul/03107 Jul/11/07 Jul/19/07 Jul/27107 AuQ/06/07 AuQ/14/07 AuQ/23/07 AuQ/31107 Sep/101

214
Gann's Method 34 intraday trading techniques
How to initiate the trade?

The median line is very important for making

the trade decision. lf the current market price is
above the median line and lower the high fork
then we can say that the trend is up and one
must buy at this time considering the upper fork
price as target and median price line as stop
loss. Same way one must se11 if the price is
below the median line and above the lower fork.
in this method if the price rises above the upper
fork or falls below the lower fork then the trend
wi11 be expanded with great volatility. in these
cases hold the trade with trailing stop loss.

215
Gann's Method 34 intraday trading techniques

23. Trade using the MACD:

An indicator developed by Gerald Appel, that

is calculated by subtracting the 26-period
exponential moving average of a given security
from its 12-period exponential moving average.
By comparing moving averages, MACD
displays trend following characteristics, and by
plotting the difference of the moving averages
as an oscillator, MACD displays momentum
characteristics. A 9- day exponential moving
average, called the "signal" (or "trigger") line
is plotted on top of the MACD to show buy/sell
opportunities.

1. The basic MACD trading rule is to sell when

the MACD falls below its signal line.
Similarly, a buy signal occurs when the
MACD rises above its signal line. it is also
popular to buy/ sell when the MACD goes
above/below zero.

216
Gann's Method 34 intraday trading techniques
2. When the shorter moving average pulls away
dramatically from the longer moving average
(i.e., the MACD rises), it is likely that the

217
Gann's Method 34 intraday trading techniques

security price is overextending and will soon

return to more realistic levels. MACD over
bought and oversold conditions vary from
security to security.

3. An indication that an end to the current trend

may be near and it will occur when the
MACD diverges from the security price.

4. A bearish divergence occurs when the

MACD is making new lows while prices fail
to reach new lows.

5. A bullish divergence occurs when the MACD

is making new highs while prices fail to
reach new highs.

6. A positive divergence occurs when MACD

begins to advance and the security is still in a
downtrend and makes a lower reaction low.

217
Gann's Method 34 intraday trading
techniques

7. A bullish moving average crossover occurs when

MACD moves above its trigger line. Bullish
moving average crossovers are probably the
most common signals and as such are the least
reliable.

8. Bullish centreline crossover occurs when

MACD moves above the zero line and enters
into positive territory. This is a clear indication
that momentum has changed from negative to
positive.
Example: Below picture exhibits the MACD

218
Gann's Method 34 intraday trading
histogram of Satyam computer and Tatasteel.
techniques

219
Gann's Method 34 intraday trading
techniques

219
Gann's Method 34 intraday trading
techniques

24 Trade Using Bollinger band

John Bollinger, this technique seeks to combine

moving averages with volatility (i.e. standard
deviation), using standard deviation as a price
band technique.
Standard deviation is defined by the symbol cr .
The statistical formula is given below.

219
Gann's Method 34 intraday trading
techniques
Bollinger has defıned three bands upper,
middle and lower band. The middle band
which acts as a support line and helps us for
taking the trade decision. The upper and lower
band define the resistance and the support line.

The Middle band is defined as a 20 period

moving average.
1. Abrupt change in prices tend to happen after
the band has contracted due to decrease of
volatility.

2. If prices break through the upper band, a

continuation of the current trend is to be
expected.

3. If the pikes and hollows outside the band are

followed by pikes and hollows inside the band, a
220
Gann's Method 34 intraday trading
techniques
reverse of trend may occur.

220
Gann's Method 34 intraday trading
techniques
4. The price movement that has started from one
of the band's lines usually reaches the opposite
one. The last observation is useful for
forecasting price guide posts.

25. Trade Using moving average channels:

The 'Moving Average Envelopes indicator'

calculates two moving averages using the two
price inputs; High price and Low price. Both
averages are calculated using price data from
the same number of bars, per the input Length.
The second method for calculating the MAE is
by taking the closing price into consideration
and the second value is % variation of the first
computed value. If the script is more volatile, the
percentage should be taken larger.
A se11 signal is generated when the security
reaches the upper band whereas a buy signal is
generated at the lower band. The optimum
percentage shift depends on the volatility of the
security.

221
Gann's Method 34 intraday trading
techniques
[sAT' Candlesticks • ! Envel pe ..J Re fresh News Help
ıınım
[Link] o-632.55 H-654.7 L-632.55 C-651.1
V•3023141.0
625.0
600.
0
575.0
550.0
525.0
500.0

5.0m

When the envelop is constructed using High and

low it is called as HiLo moving average band.

How to use Envelop to identify the buy/ sell

indicator?

Sell when the prices close below the middle band

and buy when the prices close above the middle
band. Additional buy or sell signals are taken
when the prices, after the first trade signal, either
rally or react near the upper or lower bands
without breaking them. it will be seen that there
are multiple signals of this [Link] signal of
the other side would act as the stop loss.

222
Gann's Method 34 intraday trading
techniques
26. Discrete-Time model using Monte carlo
simulation: This is the most difficult stock
price forecasting model derived from the
Monte carlo simulation procedure. it
follows the following assumptions :

a. Stock price follow the geometric Brownian

motion
b. Change in stock price = Expected return X
stock price X time interval + volatility Xstcok
price X standard normal distribution of mean
zero
and standard deviation 1X square root of time
interval
s = m*t*S + cr *S*E*r' t
s= change in stock
price m expected
return
t= time interval in which the return is
expected S= stock price
E= standard normal distribution of mean zero
and standard deviation 1

223
Gann's Method 34 intraday trading
techniques
Example: Say nifty is trading at 2950 and I
expect return of 2% in intraday trade. Hence
my time is 1/365 years 0.00274 years. Assume
the volatility is 65%. Now simulate the nifty
price based on the geometric Brownian motion
and forecast the price at which I must enter.
The Microsoft Excel function which I will be
using for th is calculation is RANDO. This will
generate a random number between 0 and 1, and
NORMSINV(RANDO) to find the standard
normal distribution of mean zero and standard
deviation
1. Based on the above information I will get the
following data. These data or the nifty price will
vary each time you will press delete key button
on any cell of your excel spread sheet.

Because we have chosen the RANDO function

which will generate a number in between 0-1
dynamically.

224
Gann's Method 34 intraday trading
techniques
Nifty E Change
2950 -0.81809 -81.9518
2868.05 0.631748 61.80519
2929.85 0.44194 44.21587
2974.07 -0.02919 -2.79035
2971.28 -0.31436 -31.6177
2939.66 -1.87106 -186.982
2752.68 -0.23601 -21.9534
2730.73 0.086741 8.208836
2738.94 -1.08581 -101.036
2637.9 -0.86763 -77.7271
2560.17 0.511827 44.72448
2604.9 0.976711 86.70833
2691.6 -1.47159 -134.621
2556.98 -0.72756 -63.1573
2493.83 0.98433 83.65764
2577.48 0.070791 6.349368
2583.83 0.990349 87.20613

The above process signals that the stock price is

so dynamic that it can change in any direction to
any extent.
How to make the trade decision? Say the next
swing point is 2973 which is 23 points up from
the chosen point. I will simulate my excel sheet
until and unless I have not got the price change
associate with my chosen point to 23. Now I got
[Link] signals that the second point of iteration
225
Gann's Method 34 intraday trading
is 2971.8 techniques

226
Gann's Method 34 intraday trading
techniques
which says I will buy at 2971.80 with stop loss at
2950, my target will be the next number higher
to 2971.8 which is 3023.-3035.8 and so on.
Nifty E Change
2950 0.215584 21.80015
2971.8 1.144469 115.8839
3087.684 0.404387 42.65253
3130.337 1.752704 186.8474
3317.184 -1.4301 -161.227
3155.957 2.089342 224.5246
3380.482 -1.22788 -141.044
3239.438 -1.96323 -216.209
3023.23 1.112513 114.6023
3137.832 -0.19579 -20.7312
3117.101 -0.0718 -7.44371
3109.657 0.391728 41.6167
3151.274 -1.07859 -115.474
3035.8 1.478011 152.8314
3188.631 0.423456 46.11581
3234.747 0.0958 10.72095
3245.468 -0.04413 -4.69535
227
Gann's Method 34 intraday trading
techniques
This iterative process is one of the most
successful
methods in intraday.

27. Trade using the Engulfing candle pattern

"Two real candle body having opposed colour
where in the second candle totally engulfing the
first candle ". Engulfing pattern is of two types.

Engulfıng Pattern

ıst candle Engulf the 2nd

1. Bullish engulfıng pattern:- "the first

candle is a black body with low volume and the
second candle is a white body with high volume
totally engulfing the first candle"
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Bullish Engulfing Pattern

1st candle Engulf the 2nd

This is a most common candle pattern found in

the price time chart. The engulfing pattern is a
good trend indicator for swing traders. one most
important factor you need to remember is that
the entire candle patterns are short term in
[Link] the price projection also is short term
in nature. My point is if the candle pattem fails
to give the break out then the better practice is to
exit.

Example: I have identified the formation of bullish

engulfing pattem formation in the price time chart
of Tatasteel in June 18t h , 2007and June 19t h , 2007.
Explain the breakout, target and the trend.

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Gann's Method 34 intraday trading
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Analysis: Bullish enguliıng pattern form in a

down trend. The price trend of Tatasteel was
down in the previous time period. Below the
OHLC data is given for reference.

Date open hi h low close volume

15-Jun-07 615.2 620 595.95 600.45 1557738
18-Jun-07 600.45 608.95 586.5 589.15 1517046
19-Jun-07 588 617 585 612.05 1979019
20-Jun-07 615 616.8 605 609.4 1227795

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From the above OHLC data if you observe on
19th June 2007 the high is higher than the 18th
June 2007 high and 19th June 2007 low is lower
than the 18th June 2007 low and the 19th June
2007 closing is higher than the opening which
forms a white candle and confirms the
formation bullish engulfing pattern.

Pattern breakout: On 19th June 2007 the high to

low price range is 617-585=32 price units. The
78.6% (i.e. the fibonacci retracement ratio) of
the price range is 25. The pattern breaks out will
happen at a price of617 +25= 642. As long as
the price maintain below this price one can
assume that that the throwaway can happen at
any stage.

Target: Engulfing pattern target is unlimited

until and unless the price does not form any
bearish reversal candle pattern in the chart. in
more than 50% cases the throw away happens
before giving a break out in this pattern.

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Gann's Method 34 intraday trading
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Volume: Volume used to be moderate in the
engulfing day. Sudden rise in volume you can
observe in the pattern break out day.

Pattern failure: If the price moves below 585-25

= 560 then we say that the bullish engulfing
pattern is a failure.

What will be entry and exit point?

The entry is suggested at a price above the

engulfing day's high having stop loss below the
pattern failure price point. The target is
unlimited until and unless any bearish formation
does not takes place. it is also advisable to make
an entry in the counter after the pattern break out
happens.

in the above example the pattern failure does not

happen but 'throw away' happens multiple times
before giving a breakout on 14th July 2007.

Note: in this chapter context the bullish trend

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Gann's Method 34 intraday trading
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reversal pattern means the trend is going to
change

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Gann's Method 34 intraday trading
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from bullish to bearish.

2. Bearish engulfing pattern:- "The first candle

is a white body with low volume and the second
candle is a black body with high volume totally
engulfing the first body"

Bearish Engulfıng Pattern

1st candle Engulf the 2nd

This is also a common pattern in price time chart

and strongest bearish reversal pattern. The
success rate of this pattern formation is more
than 80 %(
i.e. in more than 80% cases the pattern used to
give break out). once the pattern is identified the
next job is to find out the break out point,
throwaway price, entry and exit point, pattern
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Gann's Method 34 intraday trading
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failure price point and target.
in all candle stick reversal patterns the price
target is unlimited until and unless any
contradictory reversal pattern is not formed in
the price time chart in the breakout direction.

Example: I have identified the formation of

bearish engulfing pattern in SBI on 06th June
2007. Find out the break out point, target,
pattern failure point, entry and exit point?
Below the price time chart and the OHLC

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Gann's Method 34 intraday trading
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data is given for reference.

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Gann's Method 34 intraday trading
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Date Open high Low Close Total Trd Qty
01-Jun-07 1364 1385 1356 1378.9 1908666
04-Jun-07 1400 1418.4 1390 1406.4 2182423
05-Jun-07 1400 1445 1393 1437 1808672
06-Jun-07 1445 1454 1381 1390 1857287
07-Jun-07 1382 1401.9 1353.3 1360.7 2148431
08-Jun-07 1331.3 1387 1321.3 1356.6 2037482
Analysis: Bearish engulfing pattern forms in a
bu11 trend and indicates reversal of the bu11
trend. From the OHLC data it is being observed
that the 6th June 2007 high is higher than the 5th
June 2007 high, the 6th June 2007 low is lower
than the 5th June 2007 low. The closing of the
6th June 2007 is lower than the opening. Hence it
confirms the formation of bearish engulfing
pattern.

Pattern break out: On 6th June 2007 the high to

low price range is 1454-1381=73. The 78.6%
(i.e. the fibonacci retracement ratio) of the price
range is 57.37. The pattern break out wi11
happen ata price of 1381 - 57.37= 1323.63.
As long as the
price maintains above this level one can assume
that the throw away can happen at any stage.

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Target: Engulfing pattern target is unlimited
until and unless the price does not form any
bullish reversal candle pattern in the chart. in
more than 50% cases the throwaway happens
before giving a break out in this pattern.
Volume: Volume used to be moderate in the
engulfing day. Sudden rise in volume you can
observe in the pattern break out day.

Pattern failure: If the price moves above

1454+57.37 = 1511.37 then we say the bearish
engulfing pattern is a failure.

What will be entry and exit point?

it is advisable to enter a short trade on the day

following the engulfing day with a price above
the break out point having stop loss at the
pattern failure price point. The target will be
unlimited until and unless it has not formed any
contradictory reversal pattern. it is also
advisable to make an entry after you encounter a
break for better result.
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Gann's Method 34 intraday trading
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in our case the pattern has failed to give a break
out and became a failure in the future days.

28. Impulse : lmpulse is a 5 wave impulsive

wave pattern in the Elliot wave theory. it has
wide range of the properties. in the intraday
context I have derived few properties for
making the trade decision.

a. Wave 1 length must be the 0.382

retracement level of prior swings
b. Wave 2 must not be higher than 0.618
retracement level of wave1
c. Wave 3 should be of 1.272 retracement
level of wave 1
d. Wave 4 must not be higher than 0.618
retracement of wave 3
e. Wave 5 must have the same length as wave 1.

Based on these assumptions I will derive the

swing turning points and I will initiate the trade
in the 3r d wave construction process.

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Gann's Method 34 intraday trading
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Example: Say the swing high and low of nifty
future on 12ht November 2008 at 10:50 a.m. is
2963 and 2858.

Based on the above assumptions and 'data

points' I have derived the following construction
and termination points for these patterns. Each
construction and termination point will act as
the resistance and support for the move.
high low price range
2963 2858 105
constructi terrnination
wave 1 2858 2898.11
wave2 2898.11 2873.322
wave 3 2873.32 2904.8523
wave4 2904.85 2885.3666
wave 5 2885.37 2925.4766
I will initiate the buy trade above 2873 for
target 2904 and same way I will also buy
above 2885 for target 2925 .
If I want to sell; I will sell below 2898 for
target 2873. My point is that the buy decision
must be made in the construction price of
wave 1,wave3 and wave 5 same as the sell
decision points are wave 2 and wave 4.
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Gann's Method 34 intraday trading
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However this pattern happens in a upward
[Link] I caution not to initiate the se11
order in this pattern. My point is you must derive
the construction and termination points of the
waves only if the trend is up or else not.
29. Zigzag: Zig-zag is a 5-3-5 pattern happen in
the phase of the corrective waves. Means after a
fa11,there is one set of 1-2-3-4-5 wave formation
then 1-2-3 wave formation and the last leg is 1-2-
3-4-5 formation. This is wave formation which
holds the same role as given in the impulse. in
this you need to identify the 13 different
construction and termination points.

Example: Say the swing high and low of Nifty

future on 12t h November 2008 at 10:50 a.m. is
2963 and 2858.

Based on the above assumptions and 'data

points' I have derived the fo11owing
construction and termination points for these
patterns. Each construction and termination
point wi11 act as the resistance and support for
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Gann's Method 34 intraday trading
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the move.

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Gann's Method 34 intraday trading
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h igh lo w price range

2963 2858 1O 5
constructio term in at io n
w av e 1 2858 2898.11
w av e 2 2898.11 2873.322
w av e 3 2873.322 2904.8523
w av e 4 2904.8523 2885.3666
w av e 5 2885.3666 2925.4766
w av e 1 2925.4766 2940.7986
w av e 2 2940.7986 2931.3296
w av e 3 2931.3296 2943.37 4
w av e 1 2943.3742 2947.9752
w av e 2 2947.9752 2945.1318
w av e 3 2945.1318 2948.7486
w av e 4 2948.7486 2946.5134
w av e 5 2946.5134 2951.1144

Since it is a corrective pattern I will initiate the sell

at 2n d part 3rd wave termination. This equals to 2943
point with stop loss at last part 5ht wave termination
point this equal to [Link] target for this
move will be 1 st part 1 wave construction point
this is equal to 2858. Since it is a corrective
pattern, do not initiate any buy trade in any of
the swing tuming points.

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Gann's Method 34 intraday trading
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30. Ending Diagonal : Ending Diagonal is known
as ED pattern in wave theory. in the impulse
pattern the five wave sequence has three rising
waves and the two falling wave. The trend line
joining the wave 1-3-5 termination points and the
wave 2-4 termination point produce a channel for
the impulse pattern. This pattern is called ending
diagonal

Ending Diagonal
Upper Channel Line
3

Lower Channel Line

31. Leading diagonal: If the channel has 5-3-5-

3- 5 or 3-3-3-3-3 waves then it is called as a
leading diagonal LD. Below picture exhibits the
formation of ending diagonal and leading
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Gann's Method 34 intraday trading
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diagonal pattern.

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Gann's Method 34 intraday trading
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Leading
Diagonal 5-3-5-3- 5

Wave 1 has 5
subwaves
Wave 2 has 3
subwaves
Wave 3 has 5
subwaves

32. Flat:

Flat is a corrective pattern in the wave theory.

Slightly differ from the zigzag pattern. it is a
corrective pattern of A-B-C having sub wave
of3- 3-5. Below picture exhibits the Flat pattern.

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Gann's Method 34 intraday trading
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Flat
3-3-5 pattern

A
C
Wave A has 3
subwaves Wave B has
3 subwaves Wave C
has 5 subwaves

33. Expanding triangle-Wave principle triangle

contains five waves a-b-c-d-e, wherein each
wave will be having three sub waves 3-3-3-3-3.
The triangles are divided into two categories a.
contracting, b. expanding. Further more each
category is divided into three type's a. symmetric
b. ascending c. descending. Below picture
exhibit the triangles.

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Gann's Method 34 intraday trading
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Expanding Triangle
3-3-3-3-3 pattern

2 4

it has 3 bottom points and 2 top points

base part is exapnded due to decline in 3
last 3 waves. This signals trend reversal
in bearish side
5

34. Contracting triangle

Contracting Triangle
3-3-3-3-3 pattern

4 5

it has 3 bottom points and 2 top points

base part is exapanded due to decline in
first 3 waves. This signals trend reversal
in bullish direction if the price manage
to cross point 5 high.

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Gann's Method 34 intraday trading
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Above 5 patterns are difficult to express
[Link] just use the termination
points as given in the figure to derive the trade
decision and identify the patterns by drawing
the trend lines.

I conclude my writing with few simple words. If

you understood the art of converting the number
to degrees and again the degree to numbers; then
you understood the tricks of legend trader W.D.
Gann. I hope this piece of information will help
you for making an accurate trade decision. My
research on Gann's is not ending here. Still I am
in a process to explore many other interesting
parts of Gann's [Link] may find a place in my
future editions if God's blessing and your best
wishes will be with me. I hope as a reader of this
book you will start your journey to learn more
and more on this Great person's work.

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