Gann Fan Mastery for 2023 Trading Success
Gann Fan Method: A Proven Trading Strategy
How do I use the Gann Fan indicator? How do I draw Gann Fan? these are the most common questions about this indicator. But for a good reason, though!
This trading strategy is a complex support and resistance trading strategy. It uses diagonal support and resistance levels. Unlike the traditional horizontal support and resistance levels, the Gann fan angles are mathematically calculated based on the price, time and the price range of the market. If you want to learn how to correctly trade horizontal support and resistance levels, weโve got your back. Just read Support and Resistance Zones โ Road to Successful Trading.
Our team at Trading Strategy Guides has developed the best Gann fan trading strategy. It can be applied to all markets because according to the Gann theory, financial markets move as a result of human behavior. This makes them cyclical in nature. In other words, history is a good predictor of future price action.
One of the main reasons why Gann fan angles are superior to the horizontal support and resistance levels is that financial markets are geometric in their movements. Click To Tweet If you can spot a pattern or any other geometric shape in a chart, there is a high probability you can spot them at the Gann fan angles. Also, read my personal trading plan reviewed by Kim Krompass.
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Before we get started, letโs look at what indicator you need for the job for the Best Gann Fan Trading Strategy:
The First and ONLY indicator you need is the:
Gann Fan Indicator: This indicator is notable unique because it draws diagonal support and resistance levels at different angles. At first sight, you might recognize the indicator because itโs a colorful indicator. It is much like the Fibonacci Channel indicator, which was introduced to our audience in previous months. Read more here, Fibonacci Retracement Channel Trading Strategy.
Gann Theory Explained
We have special Gann fan angles and more specifically Gann came up with 9 different angles (see figure above).
The most important angle is the 45-degree angle or the 1/1 line. For every Gann angle, a line is derived from that angle. We can distinguish 4 different Gann angles above the 45-degree angle and 4 other Gann angles below, as follows:
- 1/8
- 1/4
- 1/3
- 1/2
- 1/1 โ 45 degree
- 2/1
- 3/1
- 4/1
- 8/1
Mastering The Gann Fan Indicator: A Comprehensive Guide
According to Gann theory, there are special angles you can draw on a chart. They will give you a good indicator of what the price is going to do in the future. All of Gannโs techniques require equal time and price intervals. In other words, a rise of a 1/1 would imply a 45-degree angle.
This statement may sound obscure, but weโll go through some examples shortly. Youโll get a better understanding of how to use the Gann fan indicator, and more importantly how to draw Gann fan angles.
Gann believed that when price and time move in sync, then thatโs the ideal balance of the market. The biggest part of the Gann theory revolves around the fact that prices above the 1/1 line, the 45-degree line will determine a bull market and prices below the 1/1 line determine a bear market (see Figure above).
How To Draw Gann Fan Angles
Gann believed that when price and time move in sync, thatโs the ideal balance of the market. The biggest part of the Gann theory revolves around the fact that prices above the 1/1 line. The 45-degree line will determine a bull market. Prices below the 1/1 line determine a bear market (see Figure above).
First, you need to draw a perfect 45-degree angle. Most sophisticated trading platforms should incorporate these tools. On the Tradingview platform, you can locate the Trend Angle tool on the left-hand side panel (see Figure below).
The next step is to select any major swing high or swing lows on the chart from where you draw the Gann fan angles. Once you have chosen your swing low point, simply utilize the trend Angle tool and draw a perfect 45-degree angle.
Once youโre done, you need to learn how to draw the Gann fan angles. In this step, use the Gann Fan indicator, which is located on the left-hand side panel (see Figure below).
Now, all you have to do is simply place the Gann fan indicator on the chart. Make sure it overlays on top of the 45-degree line you previously drew. This is the correct way to draw the Gann fan angles. If you have been following all of these steps, all of the other Gann fan angles should comply with the Gann rules.
Now, letโs move forward to the most important part of this article. These are the trading rules of the best Gann fan trading strategy.
Before we go any further, we always recommend writing down the trading rules on a piece of paper. This exercise will step up your learning curve and youโll become a Gann expert in no time. Here is another strategy called The PPG Forex Trading Strategy.
Letโs get startedโฆ
The Best Gann Fan Trading Strategy (Rules for Long Trade)
Step #1: Pick a significant High, Draw Gann Fan Angles and Wait For the 1/1 Line to Break to the Upside.
The best Gann fan trading strategy works the same in every time frame. But we recommend not going lower than the 1h chart, as you want to be able to pick significant swing high points. This canโt be seen on the lower time frames.
To draw Gann fan angles please refer to the previous โHow to draw Gann fan Angleโ section.
Next, letโs address our entry point:
Step #2: Wait for a Break Above 2/1 Gann angle Before Buying at the market
This step is significantly important because a reversal of the previous trend is only confirmed once the 2/1 Gann angle is broken to the upside. You want to buy at the market as soon as we break above 1/1 line.
Now, after we have our position opened, we need to do one more important thing:
Step #3: Apply again the Gann Fan Indicator on the Swing low Prior to the Breakout above 2/1 Gann Fan Angle
How to use the Gann fan indicator? Simply follow the instruction presented in the above sections. At this point, you can also get rid of the previous Gann fan angles drawn from the swing high. This will make sure your chart will not get cluttered and the price is still visible.
One of the reasons why this is the best Gann fan strategy is because we use the Gann fan indicator to track every swing in the market.
At this point, your trade is opened, but we still need to determine where to place our protective stop loss and take profit orders, which brings us to the next step of the best Gann fan trading strategy.
Step #4: Place Your Protective Stop Loss below the Most Recent Swing Low Which Should Align With the Point from Where You Draw the Second Set of Gann Fan Angles.
The best Gann fan strategy has a very clear level where we should place our protective stop-loss order which is right below the swing low located prior to the 1/2 Gann angle breakout.
Next, will learn where to take profits:
Step #5: Take Profit One we Break and Close Below the 1/1 line. We Need the Close Below 1/1 line to be by at Least 20 Pips to Consider it a Valid Breakout ย
We want to ride the new trend for as long as possible and with the help of the Gann fan indicator, we can pinpoint the ideal time to take profits. We take profit at the earliest symptom of market weakness which is a break below the 1/1 line that signals a possible start of a bearish move.
We also want to add a buffer of 20 pips to the 1/1 Gann angle breakout just to annihilate possible false breakouts.
Note** The above was an example of a buy trade using the best Gann fan strategy. Use the same rules โ but in reverse โ for a sell trade. In the figure below you can see an actual SELL trade example using thisย strategy.
Simply follow the how to use the Gann fan indicator section to draw the Gann fan angles. Weโve applied the same Step #1 and Step#2 to help us identify the SELL trade and followed Step #3 through Step#5 to manage the trade (see next figure).
Conclusion
This is the best Gann fan strategy because unlike the traditional support and resistance lines the Gann angles can pinpoint significant changes in the market swing trends. We at Trading Strategy Guides have a clear understanding of what is really going on at these critical levels because we always make sure we backtesting our strategies so they have a positive expectancy.
Best Gann Fan Trading Strategy Video
If you want to gain a much clearer understanding of how support and resistance level really work we recommend having a look at our work here: Support and Resistance: What Is Going On At These Critical Areas.
Thank you for reading!
Please leave a comment below if you have any questions about Best Gann Fan Strategy!
Frequently Asked Questions
Who is W.D. Gann and what is his contribution to trading?
W.D. Gann was a trader and market analyst in the early 20th century who developed various technical analysis tools, including the Gann Fan. His trading theories and strategies are still widely used today.
What is the Gann Fan and how does it work?
The Gann Fan is a series of trend lines based on price and time that can be used to identify potential key levels of support and resistance. It works by drawing a set of lines at different angles to represent trend lines and price movements.
How is the Gann Fan used in trading?
Traders use the Gann Fan to identify potential key levels of support and resistance and to determine entry and exit points for trades. The angles of the trend lines can also be used to identify potential trend reversals.
What are some common Gann Fan trading strategies?
Some common Gann Fan trading strategies include using the fan to identify key levels of support and resistance, trading bounces off the trend lines, and using the angles of the lines to identify potential trend reversals.
How do you draw a Gann Fan?
To draw a Gann Fan, you need to identify a significant high or low on the chart and draw a line from that point to the right. You then draw additional lines at different angles based on the theory that prices will move in specific increments.
What are some common mistakes to avoid when using the Gann Fan?
Some common mistakes to avoid when using the Gann Fan include relying too heavily on the fan to predict future prices, not adjusting the fan regularly to reflect current market conditions, and not using additional technical analysis tools to confirm signals.
Can the Gann Fan be used in any market?
Yes, the Gann Fan can be used in any market, including stocks, forex, and commodities.
How do you determine which angles to use when drawing the Gann Fan?
The angles used when drawing the Gann Fan are based on the theory that prices will move in specific increments. Common angles include 45 degrees, 26.5 degrees, and 75 degrees.
How do you use the Gann Fan to identify trend reversals?
Traders can use the angles of the trend lines on the Gann Fan to identify potential trend reversals. For example, if the price is moving up and then crosses below a downward-sloping trend line, it may be a signal that the trend is reversing.
Is the Gann Fan a reliable trading strategy?
Like any trading strategy, the Gann Fan is not foolproof and should be used in conjunction with other technical analysis tools and market research. However, many traders have found success using the Gann Fan to identify key levels of support and resistance and to determine entry and exit points for trades.
Best Gann Fan PDF
Please Share this Gann Fan Trading Strategy PDF Infographic Below and keep it for your own personal use! Thanks, Traders!
I love the look of this strategy and really want to try it out, its taken a while to find the fan tool on MT4 but have found it under the โinsertโ menu.
thanks for sharing that good tip.
Yes, you can find it here in the MT4 platform. Let us know how this strategy worked for you! https://uploads.disquscdn.com/images/19c3068ab262c3a8c12e147968507087bb8d6a76104423349c33724966f738b1.png
Can you describe more specific for setup the GAN FAN in the MT4 because I canโt found the 45 degree angles in the GAN FAN from the MT4 Platform version, please ? thanks .
Looks like it can work only problem if you switch between T/Fโs the fan goes out and doesnโt work
Hey Lourens, what platform are you using? With our testing in both MT4 and Trading View when you switch time frames the Gann Fan will stay where you placed in on the Chart. See examples: https://uploads.disquscdn.com/images/7bf0c55547cd0151c73681664ac00f2d9291c70ba01f6415ce975392e898e983.png https://uploads.disquscdn.com/images/0178afc590161e7703afb5948954303d272738470bb7611c8a3f14fee4423ee6.png
suppose i draw in 1 hr..thn shld i use it in 5mints time frameโฆ
I am so Grateful that I found your blog! I read your blogs daily and improving my skill and knowledge daily!
Thank you So much for these million dollar Knowledge!
I believe so , yes!
hi guys, thanks for your blog. everything clear so far but how react with scaling? i mean if i zoom in or out in tv the scaling is changing and the 45ยฐC is changing the position, so the 1/1 is no overlay with the angle. any recommends?
Are you referring to zooming up on the candles and also scaling the chart on tradingview?
i may have the same question as tradeb, feb 25 2020,
once the 1:1 is on the 45 degree, if you zoom in for a closer look, the 1:1 moves away from the 45 degree.
at that point should the 1:1 angle be moved back on top of the 45 degree angle?
please explain which time frame to use for buy and which time frame to use for sell
thank you in advance
To use Gann Fan, you must enable โLock Price To Bar Ratioโ before drawing it.
Lock on what? this is subjective!
hi
In the m4 platform, when you zoom in on the chart, the position of the candlesticks shifts. What advice do you have for this problem?
You havenโt taught how to square the chart by price and time before laying down the gann fan
Thank you for this great content !
Could you tell me what is the music on your video with good guitars vibes ? ๐
Thank you! Lol not sure what the music is.