In my e-book on “Gann Technique” although I’ve defined numerous rules of W.D.Gann’s technique and its software on the inventory market however the one which impressed me loads is “Gann angle” precept. The Gann angle is outlined as the set of development strains drawn from a person value level or from totally different value factors (i.e. excessive, low, and midpoint) to be able to determine the helps and resistances of a future value transfer. At this stage, don’t worry a lot about this definition. It should turn into less complicated as you proceed to the following a part of this text. The following large factor concerning the gann angle development strains are that they’re drawn at a selected angle with respect to the X-axis or to the time line. This concludes the essential formation of gann angle development strains.
Now let me clarify this idea with the assistance of an instance. Say I want to draw a development line at 1X1 (learn it “one after the other”) gann angle. This implies my development line is a straight line drawn within the value time chart which makes an angle 45 diploma with the X-axis. You should ask me that how I’ve derived the 45 diploma. Fairly easy! This can be a development line drawn assuming 1 unit of value change occurs with 1 unit of time change. If I’ll plot 1 unit of value change with respect to 1 unit of time change in a semi log scale and measure the angle with the assistance of a protractor I’ll get the angular measurement as 45 levels.
For making an intraday commerce choice we’d like a degree to make purchase or promote entry. We’d like a cease loss level and couple of goal factors. Although this job could be completed with any guess work however we’d like perfection. The perfection shall be achieved solely via the mathematical calculation which is accepted by the market.
W.D.Gann has given us 11 totally different development strains which is able to information us in making a commerce choice. These development strains are drawn primarily based on the geometrical angle proportion in X and Y axis. For instance the 2X1 (2 by 1) development line is drawn assuming the two unit of value increase or fall occurs in 1 unit of time. This development line makes geometrical angle of 63.75 levels with X-axis when drawn from a cheaper price level and projected in the direction of the upper value factors. Equally this development line will make 26.25 levels with respect to x axis when it is going to be drawn from a better value level and venture in the direction of the cheaper price level. That is the mathematical logic accessible in origin shifting, parallel line algorithm.
Now the 11 units of development strains from a cheaper price level in the direction of the upper value level are as follows 1X1, 1X2, 2X1, 1X3, 3X1, 1X4, 4X1, 1X8, 8X1, 1X16 and 16X1.
The geometrical angle made by these development strains with the X axis in an up transfer similar to 2X1= 63.75 levels, 1X2= 26.25 levels, 1X1= 45 levels, 1X3= 18.75 levels, 3X1= 71.25 levels, 4X1= 75 levels, 1X4= 15 levels, 8X1= 82.5 levels, 1X8= 7.5 levels, 1X16= three.75 levels, 16X1= 86.25 levels.
The geometrical angle made by these development strains with the X axis in a down transfer similar to 1X2= 63.75 levels, 2X1= 26.25 levels, 1X1= 45 levels,3X1= 18.75 levels,1X3= 71.25 levels,1X4= 75 levels,4X1= 15 levels, 1X8= 82.5 levels,8X1= 7.5 levels, 16X1= three.75 levels,1X16= 86.25 levels.
Gann Formulation for calculating the assist and resistance: In gann research the 180 diploma is taken into account as issue 1. It is because between the solar rise to solar set the photo voltaic movement occurs roughly 180 levels and it’s thought of as 1 day time.
The 2nd common idea accepted by the monetary analysts is that the helps are all the time calculated in a falling development and it was calculated from the excessive.
The third common idea accepted by the monetary analysts is that the resistances are all the time calculated in a falling development and it was calculated from the low.
Gann components for calculating the assist and resistance is as follows:
Assist = (sq. root of (excessive)- Diploma issue)^2
Resistance = (sq. root of (low) + Diploma issue)^2
Buying and selling Guidelines as per gann and as modified by me (Soumya Ranjan Panda Creator of this text)
- The third assist or resistance of any value transfer is necessary (as per W.D.Gann).
- In intraday commerce 45 diploma assist break (1X1 assist) will favor sellers and 45 diploma resistance (1X1 resistance) break will assist the consumers. Supplied the annual volatility of the buying and selling instrument have to be increased than 50% (as per my very own analysis )
- In low risky or medium risky market (i.e. the annual volatility of the buying and selling instrument is lower than 50 %) the (1X4= 15 diploma) resistance and (4X1=15 diploma) assist have to be utilized for lengthy and quick entry offered no congestion or entry error must be current within the calculated value. (as per my very own analysis )
- If promote entry value at 15 diploma or at 45 diploma higher than purchase entry value at 15 diploma or 45 diploma value level then it’s thought of as error and rectified by altering calculation process from the excessive and low to mid level of excessive and low. This says that as a substitute of calculating the helps down from excessive and up from low you’ll be able to calculate the identical from the mid level of excessive and low (as per my very own analysis )
- If the worth unit of the buying and selling instrument is a four digit quantity then between the purchase entry and promote entry value not less than 5 unit distinction is required to take unbiased choice as per this precept or else it’s thought of as congestion and it’s rectified by altering the excessive and low to mid level. (as per my very own analysis )
- If the worth unit of the buying and selling instrument is a three digit quantity then between the purchase entry and promote entry value not less than three.5 unit distinction is required to take unbiased choice as per this precept or else it’s thought of as congestion and it’s rectified by altering the excessive and low to mid level. (as per my very own analysis )
- If the worth unit of the buying and selling instrument is a 2 digit or single digit quantity then it have to be transformed to four digit quantity by the way in which of multiplying it with 10 or 100 and even with 1000 and the resistances and helps shall be derived from the four digit quantity. And the outcomes have to be dividing by the multiplier to reconvert it again to its unique kind. (as per my very own analysis )
- The smallest time interval in which you’ll be able to determine the excessive and low is 5 minuets after the opening bell or the best time interval you’ll be able to take into account is the first 15 minute after the opening bell. Any public sale interval have to be ignored. Like now in Indian market 9 a.m. to 9 :15 is taken into account as name public sale interval. Therefore the info from 9 a.m. to 9:15 a.m. have to be ignored (as per my very own analysis )
- If any commerce of yours triggers the cease loss or trailing cease loss then don’t reenter the commerce in the identical course once more.
As a day dealer hypothesis is my career and I’ll comply with these calculations like spiritual testimony.
Instance: on 11th November 2010 SBI between 9:15 to 9:30 a.m. made excessive 3238.35 at 9:16 p.m. low 3214.10 at 9:27 p.m.
Under given are the calculation of resistances and helps for reference.
Low3214.1 Excessive 3238
Angle Diploma Diploma-Issue Resistance Angle Diploma Diploma-Issue assist
16X1 86.25 zero.479166667 3268.6604 1X16 86.25 zero.479166667 3184.0442
8X1 82.5 zero.458333333 3266.2787 1X8 82.5 zero.458333333 3186.3958
4X1 75 zero.416666667 3261.5178 1X4 75 zero.416666667 3191.1015
3X1 71.25 zero.395833333 3259.1387 1X3 71.25 zero.395833333 3193.4557
2X1 63.75 zero.354166667 3254.383 1X2 63.75 zero.354166667 3198.1667
1X1 45 zero.25 3242.509 1X1 45 zero.25 3209.9592
1X2 26.25 zero.145833333 3230.6567 2X1 26.25 zero.145833333 3221.7735
1X3 18.75 zero.104166667 3225.9219 3X1 18.75 zero.104166667 3226.5053
1X4 15 zero.083333333 3223.5558 4X1 15 zero.083333333 3228.8725
1X8 7.5 zero.041666667 3218.8262 8X1 7.5 zero.041666667 3233.6095
1X16 three.75 zero.020833333 3216.4626 16X1 three.75 zero.020833333 3235.9793
(You may obtain a prepared made free to make use of gann angle calculator from our website online from the next hyperlink http://www.smartfinancein.com/free-software.php . The paid calculator which is given together with the grasp course validates extra variety of logical situations and infuses extra variety of gann rules within the choice making in order to provide you higher success in intraday commerce.)
As per the above dialogue and calculation process we now have made the calculation of resistances and helps. As per the present volatility situation we’re being suggested to purchase the inventory at 3223.5558 or promote at 3228.8725. That is violating the purpose D commerce precept and thought of as an entry error henceforth we are going to change the excessive and low to its mid level and do the calculation from the mid level the mid level of 3238.35 and 3214.10 is 3226.225 . The modified calculation desk is as follows.
As per the modified calculation we’re suggested to purchase at 3235.6986 for ultimate goal 3280.8878 and promote at 3216.7653 for ultimate goal of 3172.0214
Low 3226.225 Excessive 3226.225
Angle Diploma Diploma-Issue Resistance Angle Diploma Diploma-Issue assist
16X1 86.25 zero.479166667 3280.8878 1X16 86.25 zero.479166667 3172.0214
8X1 82.5 zero.458333333 3278.5016 1X8 82.5 zero.458333333 3174.3685
4X1 75 zero.416666667 3273.7318 1X4 75 zero.416666667 3179.0654
3X1 71.25 zero.395833333 3271.3482 1X3 71.25 zero.395833333 3181.4151
2X1 63.75 zero.354166667 3266.5837 1X2 63.75 zero.354166667 3186.1172
1X1 45 zero.25 3254.6874 1X1 45 zero.25 3197.8876
1X2 26.25 zero.145833333 3242.8129 2X1 26.25 zero.145833333 3209.6796
1X3 18.75 zero.104166667 3238.0692 3X1 18.75 zero.104166667 3214.4025
1X4 15 zero.083333333 3235.6986 4X1 15 zero.083333333 3216.7653
1X8 7.5 zero.041666667 3230.9601 8X1 7.5 zero.041666667 3221.4934
1X16 three.75 zero.020833333 3228.5921 16X1 three.75 zero.020833333 3223.8588
- At 9:34 a.m. We received an opportunity to promote at 3217 and saved out cease loss at 3235.70 this as per our calculation. Upon reaching the first goal 3214.4we path to cease loss to 3216.80, then upon crossing the 2nd goal we path the cease loss to 3214.40. Sadly after touching the low 3211 at 9:39 a.m. the trailing cease loss triggered at 3214.40 and we simply bagged much less then +three factors.
- Contemplating our quick commerce journey is mistaken and as per the final protocol set within the commerce rule we waited for the 3235.70 to come back which we now have received an opportunity at 10:07 a.m. and achieved until 3254 until 11:27 a.m. which is shut close to to our 45 diploma goal level.
On this case if my shell cease loss triggered at 3235.7 I’ll settle for shut close to to 18.9 level loss and be a purchaser at this level protecting the cease at 3235.7 and intention for the final goal 3281 with some logical trailing cease loss.
This idea works in commodity, foreign money in addition to in shares.
Nevertheless the limitation of this text is that it doesn’t focus on all of the buying and selling guidelines and situations that are being researched by me. Within the gann grasp course the provided software program makes use of all of the prolonged set of logics.