A short term support is found, so we wait for a retest of the trend line at point 3.After plotting the Gann Grid indicator, we look for break of trend line and a retest for short positions.The chart below shows how a trade would taken based on the Gann grids. Gann states that when price trends along a Gann trend line, the trend is usually strong.
For traders who do not want to get into the detailed Gann trading methods, can merely stop here and use the Gann grid to trade the same was as trading trend lines or channel lines. On close observation the Gann grid can also be viewed as a channel. Notice how the trends (or corrections) within the major uptrend are depicted using the Gann Grid tool which form support/resistance trend lines.
When we zoom into the chart, we can see how price reacts to the Gann grid lines. Therefore, if we apply the theory of uptrend when price is above the trend line and vice versa, we can see some very interesting observations. This adjusted view of the Gann grid offers a much better view of the markets than simply connecting highs/lows. The Gann grid has been adjusted so that price is as close to the Gann grid lines as possible. Notice the bold lines that have been highlighted.
The chart above shows the adjusted Gann grid. Because the market is never in perfect harmony, the Gann grid can be adjusted to suit the current price action. There is no hard and fast rule about connecting highs or lows. It is important to note here that each of the trend lines within the grid could be seen as a trend line. The chart above shows the Gann grid, which is plotted, after connecting two consecutive lows at A and B. The Gann Grid tool does the rest of the work and creates a grid. To plot the Gann Grid, two consecutive highs or lows are connected (the same way as one would draw a trend line). The Gann grid enables traders to decipher the strength of the trend and also predict change of trends. When price is trading above the Gann trend line, the market is considered to be in an uptrend and when price trades below the Gann trend line, the market is considered to be in a downtrend. The grid comprises of squaring time and price based on the 45 degree angle of the main trend line. The Gann Grid is often considered to be a leading indicator as it projects trend lines into the future. Gann which states, that there was a perfect balance when price rises and falls at a 45 degree angle Most of Gann’s work rely on Geometry and it is now a well know tenet of W.D. Insert > Gann Tools section of the menu bar In the MT4 platform, the Gann tools can be accessed from: The Gann tools are usually a standard set of tools available with most default charting packages. Some of famous WD Gann trading tools are: Gann’s trading methods involve geometry within the price-time series. Gann based most of his research on astrology and numbers and it is rumored that he made over $50 million during his trading career. One of the complex trading systems, the Gann methods involve both price and time and is aptly used for forecasting prices.
William D Gann is one of the most famous of technical analysts who has managed to capture the imagination of traders.
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