The Gann Square of Nine is a powerful forecasting tool used in technical analysis and trading. Here’s a comprehensive overview of this intriguing concept:
What is the Gann Square of Nine?The Gann Square of Nine is a numerical and geometrical framework developed by legendary trader W.D. Gann to identify key price levels, support and resistance lines, and optimal trade timing. It’s based on the principles of harmony and proportion, linking natural order to market movements.
Construction and StructureThe Square of Nine is constructed as follows:
Start with the number 1 in the centerNumbers increase in a clockwise spiral outwardEach “ring” forms a square around the centerThe first complete square contains numbers 1-9, hence the nameHere’s a simplified representation of the Gann Square of Nine:
37363534333231381716151413303918543122940196121128412078910274221222324252643444546474849Key ConceptsCardinal Cross: The horizontal and vertical lines passing through the centerOrdinal Cross: The diagonal lines passing through the center45-degree angles: Considered crucial for market equilibriumHow to Use the Gann Square of NineIdentify a significant high or low point on a price chartLocate this price on the Gann SquareTrace diagonals within the square to find potential future resistance or support levelsMonitor price action as it approaches these levels for trading opportunitiesImportant NumbersThe most significant numbers in the Gann Square of Nine are:
Numbers on the Cardinal Cross (vertical and horizontal lines)Numbers on the Ordinal Cross (diagonal lines)Numbers occurring every 45 degrees on the chartCalculating ValuesTo find the next value to the right of a number:
Take the square root of the original numberSubtract 2Square the resultFor example, to find the number to the right of 54:
√54 = 7.3484697.348469 – 2 = 5.4384695.438469² ≈ 29To find the value to the left, add 2 instead of subtracting.
Applications in TradingTraders use the Gann Square of Nine to:
Identify potential support and resistance levelsForecast price movementsDetermine optimal entry and exit pointsAnalyze time cycles in the marketConsiderationsThe Gann Square of Nine is complex and requires dedicated studyIt’s often used in conjunction with other technical analysis toolsWhile some traders swear by its effectiveness, others remain skepticalIt’s generally more suited for short to medium-term trading rather than long-term investingBy understanding and applying the principles of the Gann Square of Nine, traders can gain unique insights into market behavior and potentially improve their trading strategies.
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