Forex for beginners

# Gann angles: How to use Gann angles for trading on Forex  Written by

Many traders, making foreign exchange market trading operations, strive to use the latest indicators for maximum profit. But we should not forget about the old and time-tested methods of analysis, which are relevant to this day. Some of these tools can be rightly called Gann angles.

Quite often, they are called a fan. This tool or rather script is very accurate. Its skillful construction and correct use gives the trader useful information about Forex contributing to a more accurate entry into the market for buying or selling.

The concept of Gann angles

Gann method is based on a study of the change of the price trend relative to the beams coming from one point at right angles. Point must be located in a price extremum. The main angle is called the base (the balance). The angle is 45 degrees.

Gann angles and their construction are performed according to certain values:

• The line 2×1 – 63,75 degrees;
• The line 4×1 – 75 degrees;
• Line 8×1 – 85,5 degrees;
• Line 1H2 – 20.75 degrees;
• Line 1×4 – 15 degrees;
• Line 1×8 7.5 degrees.

Initially, it may seem that this set of random numbers. The proportions are 2×1, 4×1, etc. represent the ratio of the prices (first figure) to the unit prices (the second digit). Thus, in the calculation of the observed change in the value of the traded asset at a specific time interval. The above Gann angles in degrees are the basic or standard. In addition to these dimensions (in importance), note the values of angles 0 and 90 degrees, although rarely they occur in thematic literature on trading.

A set of lines like a fan. Hence the name of the tool. The fan is rising (the rays pointing up) or descending (the rays are directed down).

Initially, the calculation of the Gann angles were conducted by the author on the graph paper using a protractor. In this case the scale was already taken into account. In other words, a certain time period correspond to a specific number of points the price movement. The construction of the corners in the terminal on the currency pair chart should correspond to a specific time period. Deviation from this rule creates the risk that when changing time lines will be different.

The calculation of the angles by the method of James Herika

This is one of the methods of calculating the scale on schedule. It is quite simple and intended for a market with unknown parameters. On the chart chosen to trade the asset schematic (in this case the red line) rascherchivanija price movement from top to bottom and then from bottom to top. The difference between vertices in the points is divided by the period of time between them (in bars). Similar actions are produced between the bases. Then everything is repeated for the subsequent tops and bottoms. All final calculation results are added and divided by their number. Thus, the calculated mean value. For convenience, the resulting value is rounded. So look Gann angles in the mathematical expression.

Gann theory in currency market analysis

Using the theory of Gann to trade the Forex, it is possible to identify some of the key important points that should be considered:

• The price of The asset the time period and the range of market fluctuations;
• The presence of the geometric structure of the market. The correct analysis makes it possible to obtain the most accurate forecast of the price dynamics;
• The cyclical nature of the market changes. Everything that happens on the Forex at present, as a rule, be repeated after a certain time interval.

The author of the theory argued that the nature of the foreign exchange market can be compared with the essential characteristics of man. The result of The correct analysis of past and present is a very real forecast of the future.

Tool for trading on Forex

The indicator Gann angles is a standard set of tools of the trading platform MetaTrader. It is easy to set on the chart of any asset. To do this, in the opened chart window, press “Insert” and move the cursor to the pointer “Gunn”. In the window that will appear the line, fan and grid. Their principle use is the same.

In the absence of a script, it downloaded and installed on the platform in various versions.

The indicator Gann angles is a sequence of straight lines. They are built together with the main direct (beam) from a certain point at different angles. This point is called the reversal.

Each beam can be considered as the level of support or resistance, depending on how he is approached by price. It should be noted that the instrument cannot with absolute certainty predict the further price movement. But it can show the trader the point in time when the probability of a trend reversal or a consolidation of the market is quite high. The strongest level is considered the base angle 1×1. This is an important separator with which the trader determines the direction of the price trend, the balance between the price and time ranges. Below the separator there’s a downtrend, higher — rising. The figure clearly shows a change in the motion at the intersection of the base angle. In this case, the selected trading period D1 gives a high prediction probability of movement of the asset and reflects the mood of market participants. Ray 2×1 gives information about the fact that the price will change by one unit two units of time. Accordingly, the beam 4×1 indicates a change in the unit prices for four units of time.

Trade on the Gann angles starts with building them on the chart. The beginning is considered to be an extreme point. The ray of 1×1 defines an angle of 45 degrees. The figure shows how the trend periodically in contact with him. All other components of the fan are automatically placed near the base of the corner.

Forecast of price in the Gann angles are fairly accurate, but should not be use only one indicator. A good result will be real only in conjunction with other technical analysis tools. In any case, Gann angles will make a great addition to many trading strategies.

### About the author 