- @Biplab Gann Square of nine and Price angles are two different strategies – I have explain both the methodologies for the educational purpose you can use either one of them don’t combine both of them - for the beginner I would suggest gann square of nine because it is basically based on support on resistance and they are just numbers – which you have to follow with Stop loss and faith.
- Each number in the square represents an angle relative to the center. In this post, we would understand in detail how to use Gann square of 9 Calculator for intraday trading. There is an excel sheet attached with the post which would help you to calculate support and resistance levels based on Gann theory.
Nov 16, 2016 Every value in the Gann square is related to the center value. Below are the steps used to calculate these values: Calculate the square root of LTP. Let’s suppose LTP=8400, then SQRT (8400)=91.65 Take two integers below and above the square root calculated. 360 DEGREE PRICE ANALYSIS. 119.18 45 90 120 135 180 225 240 270 315 360.
One of our goals at Optuma is to make advanced Gann analysis as simple as possible for our clients. As such, we have created a number of tools that can save you hours of research and painstaking manual calculations in your chart analyses. Not only have we taken the old wooden Square of Nine and made it fully interactive and customisable, but we have also developed a number of tools derived from it, such as the Static and Dynamic Square of 9.
The Static Square of 9 tool calculates price levels according to degree levels – or aspects – of the Square of 9 wheel, starting with 1 in the center. When the Static Square of 9 tool is applied to the chart (with a Price Unit of 1 – more about that later) the first 360 degree level will be 11, the second will be 28, the third 53, etc. Looking at the classic Square of 9 wheel you will see where these numbers appear: all are on the horizontal line to the left of the center value of 1. As each number is one complete revolution around the Square of 9 from the previous number they are said to be 360 degrees apart. Similarly, the 180 degree levels are half way around from the center starting point and directly opposite the 360 degree levels, i.e. 6, 19, 40, etc. Whilst they are 360 degrees apart from each other they are 180 degrees from the center. You will see the relationship between the classic Square of 9 wheel and the levels in the tool in this image:
The Square of 9 chart is also known as a square root calculator: pick a number on the chart, take the square root, add two, and re-square. You will see the value will be the next number around the wheel.
Example:
square root of 79 = 8.888
8.888 + 2 = 10.888
10.888 x 10.888 = 118.548
[Note: to calculate 180 degrees around the wheel add 1 to the square root before re-squaring, 90 degrees add 0.5, etc.]
This is why the distance between each successive level is never the same: each subsequent rotation around the wheel is further to travel, so for example, the distance between the 360 degree levels grows wider and wider with each revolution. This is why the distance between the 1st and 2nd 360 degree level is 17 (28 – 11) but from 3rd to 2nd the distance is 25.
Many Gann analysts use the degree levels as potential support and resistance points in the market, and they can work for any instrument in any time frame. The image below shows the Australian Dollar / US Dollar currency pair on a weekly chart, with the Static Square of 9 applied. The degree levels used are semi-square, or every 45 degrees (i.e. 45, 90, 135, 180, 225, 270, 315 and 360 degrees). As you can see, the chart has respected these levels on multiple occasions. In fact, at the time of this writing, the 225 degree level at $0.73 is proving to be a level of support.
Using the Price Unit
One important thing to remember is that the settings for the Square of 9 tool – and all Optuma tools for that matter – can be set by the user to their own specifications, whether the degree levels, the line colours, and perhaps most importantly the Price Unit. This crucial property is found in many Gann tools and it’s important to find the right value for the particular chart being analysed. In the currency chart above for example, using a Price Unit of 1 will not work on a chart trading in the $1 range with small increments. By setting the Price Unit property to 0.01, it recalculates the levels divided by 100, so that the first 360 revolution will be at 0.11 instead of 11, and the 180 degree line mentioned earlier at 1.06 is the equivalent of 106 on the wheel (as seen in Figure 1).
The software will try to select the appropriate price unit by default, but this can be manually adjusted via the tool’s Properties panel.
For more information on Price Units, Factors and Harmonics in Gann tools click here.
Going Dynamic
A variation of this tool is the Dynamic Square of 9, which, instead of looking at angles from the center square (ie 1), uses a user-defined value instead. For example, applying the tool on the low of McDonald’s in August 2015 (see chart below) shows the degree levels starting from $87.50, with the first 360 degree level at $128.92 showing resistance, and the current all-time of $178.70 being only a few cents above the second 360 revolution around the wheel from 87.5.
One other important feature of the dynamic tool is that it also works from a high going in the opposite direction, predicting potential support levels or targets. If you apply the tool to a significant high then click a second time below the level of the first click it will calculate the descending levels. The next example shows the high of Tesla at $389 with the Dynamic Square of 9 tool calculating significant support and resistance levels at descending 90 degree increments. By looking at the Square of 9 wheel you will see that the major low at $247 is exactly two 360 degree revolutions inside 389.
These are just a couple of examples of some of the advanced Gann tools that we have developed over the past 20 years which, when used in conjunction with other confirmation signals and a robust trading plan, will save you time and improve your analyses. To arrange a free trial of these tools and many more please click here, or click here to contact us.
Darren Hawkins, MSTA
Senior Software Specialist at Optuma
Darren is the senior Software Specialist at Optuma. He joined the company in 2009 after attending an introductory technical analysis course. Darren now instructs users all over the world, from experienced Wall Street traders and professional money managers to individual traders drawing their first trendlines.
Darren grew up in the UK and attended college in the USA where he earned a BA in Economics from St Mary's College of Maryland. He went on to spend a few years working at the Nasdaq Stock Market in Washington DC. Going on to live and work in Australia, UK and currently USA, Darren has a broad understanding of the individual needs of traders and investors utilising a wide range of methodologies.
In 2014 Darren passed the UK-based Society of Technical Analysts diploma course, and is looking forward to soon becoming a candidate for the Market Technicians Association's CMT programme.
When not looking at charts, Darren keeps a keen eye on England's cricket team - especially if they are playing against Australia. He recently moved to Charlotte, North Carolina with wife Wendy and their labrador, Gabba.
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Gann
Who is Gann?
The trading concepts used by William Delbert Gann, or W.D. Gann as he is fondly called, bring feelings of intrigue and mystique.
He is primarily known for his market forecasting abilities, such as the Gann square of nine which combine a mix of geometry, astrology, and ancient math techniques. Gann started trading at the age of 24 and was a religious man.
Gann was also a 33rd degree Freemason [1], to which some attribute his knowledge of mathematics and ratios.
For the most part, Gann’s works have been open to interpretation. Therefore, to trade based on Gann’s methods requires extensive practice and understanding.
Understanding Gann
Unlike trading with technical indicators where you can buy or sell when some variables are met, trading with Gann’s methods is not as straightforward. This is because learning the methods takes time. You can’t just apply a few moving averages to the chart and give it a go.
Nintendo wii theme song mp3 download. The other challenge is there are no clear Gann trading strategy experts to learn from. So, why are traders still holding on to techniques defined in the 20th century?
My take is that it’s so complex and hard to decipher, this leads traders to believe there must be something there.
Gann Calculator Excel
Among the many trading methods known to Gann, the square of nine is quite popular.
What is the Gann Square?
Squares, circles, and triangles are the three most common geometric shapes that form the basis for most of Gann’s work.
Gann’s wheels and squares are some of the most common applications and form the cornerstone of Gann’s work.
For example, Square of nine, Square of 144 and the Hexagon are some of the many works from Gann that are popular.
Square of Nine
The square of nine or Gann Square is a method which squares price and time. The Gann square of nine gets its name because if you look at the above chart again, the number 9 represents the completion of the first square.
The square of 9 is a spiral of numbers with an initial value “1” starting at the center. Starting from this value, the number increases as we move in a spiral form and clockwise direction. According to experts, each cell in Gann’s square of nine represents a point of vibration.
How to Calculate the Square of Nine
The numbers within the Gann square of nine also follow a certain harmonic pattern. For example, when you take a number, such as 54 from the above square, the value to the next of it (to the right), 29, is derived as follows:
The square root of the number and subtract 2, and re-square the result.
Ex: 54 is the original number
The square root of 54 = 7.348469
7.348469-2 = 5.438469
Trials in tainted space max stats. (5.438469)2 = 29 rounded off
To determine the value to the left, instead of subtracting 2, the number is added. So, we simply add +2 to the square root of 54 (7.348469), bringing the value to 9.348469. We then square this result to get a value of 87.
How does the Gann Square work?
The Gann square of nine helps to identify time and price alignments in order to forecast prices.
In the Gann Square of nine, the key numbers of importance are as follows:
- 0 or 360 degrees: 2, 11, 28, 53….
- 45 degrees: 3, 13, 31, 57, 91…
- 90 degrees: 4, 15, 34, 61, 96…
- 180 degrees: 6, 19, 40, 69…
Cardinal Cross and Ordinal Cross
Gann Square Of Nine Software
The next sets of important numbers fall within the cardinal cross and the ordinal cross.
The picture below shows the cardinal cross, represented in the blue horizontal and vertical lines. The ordinal cross numbers are represented in the yellow cells.
Gann Square Of 9 Excel Formula
The numbers that fall in the cells represented by the cardinal and ordinal cross are key support and resistance levels.
While both are important, the ordinal crosses are of less significance and can be breached at times.
Gann Square – Cardinal and Ordinal Cross
The most important numbers as we know it occurs every 45 degrees on nine chart.
Each degree is a representation of time.
Above is a standard 1×1 chart. As an example, if price made a high of 54 on the day, if price retreats, the next support is 29, as it is the next closest number across the square of nine.
Circle Around the Square
Also, drawing a circle connecting the four corners of the squares brings the concept of angles into perspective. The angles, measured by degrees can point to potential support and resistance levels when the price is said to be moving within an angle.
The chart below shows the Gann square of nine with the circle plotted around it.
Gann Square of nine with the circle, introducing angles and degrees
Using the Gann Square
To use the Gann chart, simply replace the starting number 1 with a number of your choice and the desired step value. In the above example, the increment is 1, but you could use larger or smaller values.
The resulting numbers in the ordinal and cardinal number cells are key resistance and support levels.
Based on this information, traders can look to either buying or selling into the nearest support or resistance level.
Gann’s square of nine also factors in planetary movements and the degree of price movement based on the circle.
There is a big difference between forecasting prices and trading. For example, one can forecast that the Emini S&P500 will rise to 2100 within a certain period of time. What the forecasting won’t tell you is whether the move to 2100 will be straight, or if the price will fall by a significant number of points before rising to 2100 and so on.
These might seem insignificant when it comes to forecasting, but they can be very things that can define a successful or a bad trade.
Additional Resources
To go deeper on Gann trading strategy, check out this awesome interview covering Gann and swing trading. The video is close to an hour and provides additional insights you can use to help develop a Gann trading plan.[2]
Lastly, if you are looking for original Gann teachings, please visit https://www.wdgann.com/. This is the site for WD Gann, Inc. which according to their site, purchased the original Gann writings from his business partner Ed Lambert in the 1970s. [3]
External References
- William Delbert Gann. Wikipedia
- Aaron Fifield, Walker, Tim. (2015). Gann Swing Trading & Technical Analysis. [Video]. YouTube.com
- About Us. WD Gann, Inc.