Gannbook978 81 905978 1 4

Gann’s Method
Geometry of Making Profit
by
Mr Soumya Ranjan Panda
1
Gann’s Method
3rd Edition -November 2011
“ I can only say that W.D.Gann’s method is one

of the mathematical wonders. If you belief in the
Vaastu geometry for designing your home or
office then equally you must accept the Gann’s
method for predicting the stock price“
-Ranjan
2
Gann’s Method
Disclaimer
M/s Smart Finance is an independent publisher of

“Gann’s Method”. Examples given in the book are
for the education purpose only. Opinions or
suggestions are given with the understanding that
readers acting on this information assume all risks
involved. The information provided herein is not to
be considered as an offer to buy or sell security of
any kind. The author, M/s Smart Finance does not
assume any responsibility or liability resulting from
the use of such information, judgements, formulas
or opinions for trading or investment purpose.
M/s Smart Finance

#32/34, Mangalinagar 1st street, Arumbakkam,
Chennai-600106. ph: 9840348971
www.smartfinancein.com
3
Gann’s Method
“ Gann’s study has deeply inspired me to think

beyond the cosmos. I think the entire universe is a
perfect geometry.All the planets in the universe
are in their perfect trajectory since million and
billion years . Hence it is nothing wrong in using
the geometry for price time forecasting ”
-Ranjan
4
Gann’s Method
Preface
This book is having 8 chapters starting with the

basic Gan wheel to the advanced Gann tools. The
chapter -1 contains the basic gann wheel explana-
tion , the number and the degree relation etc. From
2nd chapter to 5th chapter I have discussed the dif-
ferent relations of price, time and degree. In that
course also you will find various interesting tricks
and techniques to predict a trade . Chapter-7 has
all the acceptable Gann tools.Chapter - 8 explains
34 intraday trading techniques.
The complete understanding of this book will

surely help you in making an accurate trade
decision.
-Ranjan
5
Gann’s Method
“ For me Gann was one of the best mathemati-

cians of his time and has done a great work which
is beyond the thought process of his contempo-
rary mathematicians”
-Ranjan
6
Gann’s Method
Acknowledgement
This work is one of my most important achieve-

ments in life . I convey my sincere thanks to all
my well wishers, friends and clients who have
supported me in this course of development. My
special thanks to my wife who is the 1st reader of
this entire manuscript before it has gone to press
for publishing. Her continuous support and
encouragement made me to finish this work for
the well being of the society. I have made an
attempt to present the entire concept in the
simplest manner but as a human being me too have
some limitations in thought process . Your feed
back is highly valuable to bring the modifications
in my future editions.
Soumya Ranjan
Panda
7
Gann’s Method
“Putting theory into practice is the best job which

one can do. In this book I have made an attempt
to do so ”
-Ranjan
8
Gann’s Method
CONTENTS
Page No
Chapter 1: Introduction to Gann’s Method 10
Chapter 2: Squaring Price With Price 25
Chapter 3: Current Price and Past Time 37
Chapter 4: Price Range and Time 49
Chapter 5: Price Range and Time In Current Trend 67
Chapter 6: Gann’s angle and dynamic principles 91
Chapter 7: Gann Tools and Technique 117
Chapter 8 : 34 Intraday Trading Techniques 131
9
Gann’s Method Introduction to Gann’s Method
Chapter 1
Introduction to Gann’s Method
1.1 Introduction
1.2 Gann wheel
1.3 Gann wheel analysis
1.4 Degree to Price relation
1.5 Constructing Gann’s channel
10
Chapter 1
Introduction to Gann’s method
1.1 Introduction :
William. D. Gann was one of the most
successful traders of his time. Born in
Lufkin, Texas on June 6, 1878 A.D, started
commodity trading and stock market trading
in 1902, and moved to New York City in
1908, opened his own broking firm,
W.D.Gann & Co., he died on June 14, 1955
at Miami,Florida.
His use of Natural Law and geometric
proportions based on the circle, square, and
triangle in the Stock and Commodities
markets are effective today as they were 50
years ago. His techniques work in any
market. His methods are seen to be a bit
unusual and even mystical to many traders,
but they have proven themselves time and
again over the past century.
11
The key point of his work is that he

establishes the relation between the price
and time after converting it into degrees.
Neither I am a Gann expert nor I have
attended any seminar conducted by the
Gann experts. I just love his mathematical
works and its application in forecasting the
future price and time. Many Gann experts
use the astrology with his work. Few s/w
also available to predict the future price
with respect to astrology using Gann
method but I never knew those methods.
What ever I am going to discuss in this
chapter is purely a mathematical one and
can be used with the help of paper and
pencil. This book will start with the Gann
wheel and will end at various squaring
techniques. Technique for taking weekly,
monthly trade decision are also included.
I found that it is very much useful for taking
the intraday trading decision. Hence there
is nothing harm in using this.
12
Though many Gann legends argue that this is

the only and the only one way to predict the
future price of a stock, but I do not agree with
them. It is just a method but not a full proof
technique to predict the future. If you ask me
is there any full proof method to predict the
future stock price. My answer will be - ‘No’.
1.2 Gann wheel:
The Gann wheel is the numerical arrangement

of numbers from 1 to 81 in a spiral manner. It
is a table consisting of 9 rows and 9 columns.
Many s/w program support 13X13 even more.
The picture given in the next page is a Gann’s

square of 9 wheel. The number one is placed
in the centre then one circle is completed by
placing 2 to its left, 3 on the top of 2, 4 on the
right of 3, 5 on the right of 4, 6 below5, 7
below 6, 8 on left of 7, 9 on left of 8. One
spiral is completed at this position.
13
Gann Square of 9 Table
The second spiral starts from 10. Like this

all the 81 members are arranged in the 9X9
table.
The above table is the basic arrangement of

numbers in a 9 X 9 table.
14
Now go to little complex nature of this 9X9

table. Imagine this table placed inside a circle
whose centre is at 1. Then the typical Gann
wheel will look like the below picture as in
section 1.3. Now don’t break your head to
explore the wheel because we will explain it
in detail in later section.
1.3 Gann wheel analysis:
Now little bit concentrate on the Gann’s 9X9

table. If you imagine a circle having centre at
1 and the squared table is inside the circle.
From Gann wheel imagine a circle having
element 15 in its circumference and centred
at 1. If the starting is the 0 degree then the
number 45 degrees from 15 will be 17, the
number 19 is 90 degrees from 15, 23 is 180
degrees up from 15 like wise 34 is
360 degrees up from 15.
15
16
1.4 Degree to Price relation :
Degree to factor table:
Degree Factor
360 degree 2
315 degree 1.75
270 degree 1.5
225 degree 1.25
180 degree 1
135 degree 0.75
90 degree 0.50
45 degree 0.25
22.5 degree 0.125
Why these factors?

If you will imagine this movement as spiral
then the arc length created by each one degree
movement is almost 5.55 X 10 -03 unit
assuming the diameter of the spiral starting
with 1. Based on this concept the factors are
being derived.
17
Now see the number relation with the

factors.
Example 1: Which number (say N) is 1800

down from number 15?
N = ( 15 -1)2 = 8.25. If you will neglect

the decimal part then the integer part will
be 8. If you observe the Gann table then
the number is exactly what we have found
out through the calculation.
Example 2: What number (N) is 1800 up

from number 34?
N= ( 34 +1)2 =46.66. If you will neglect

the decimal part then the number we will
get is 46. It is exactly what we have found
in Gann table.
Gann specifies that 450, 900, 1800, 3600 are
the potential resistance and support for a
particular stock price.
18
Example 3: On 30th August 2007 SBI, OHLC

data are as follows (1570, 1618, 1570, and
1596). Based on Gann’s degree to price
relation how to generate the most likely
support and resistances for the next trading
session?
Before applying the Gann technique let us

analyse the data for knowing the direction.
Simple techniques to analyse these data
points. Take the 5 days moving average MA
(5), 10 days moving average MA (10) and 30
days moving average prices MA (30). For our
example MA (5) = Rs 1570/-, MA (10) = Rs
1520/-, MA (30) = Rs 1571/-. My closing
price is well above 5 days moving average.
Hence in short term I will expect a positive
move in the script. Also it is a coincident that
my low is exactly equal to the MA (5), If not
also no problem.
19
Now I will start my calculation from the

day’s low of 1570.
DEGREE UP DOWN
45 1589.874 1550.251
90 1609.873 1530.627
180 1650.246 1491.754
360 1732.493 1415.507
Above table represents that 1589 is 450 up

from 1570 and 1550 is 450down from 1570.
My closing is well above the 450 up price.
Hence my next upside resistances will be
1609-1650-1732 support 1589-1550-1530.
Gann trader follows this rule as to enter a

long trade once the price crosses 450 up
from the days low, keeping the stop loss at
450 down from the days low. The target will
be above 900 -1350- 1800 data points.
20
Is this method useful for intraday?
It is one of the best methods for intraday. You

need to have 2 minutes or 5 minutes
data.Consider the hourly high or low point.
The starting point will be 22.50 or multiple
of it.
We have many interesting methods which are
explored in subsequent chapters. Hence read
all the techniques before applying it into
practice.
21
1.5 Constructing Gann’s channel:
Step 1: Consider the most significant low.
Step2: Compute the 45 degree, 90 degree,

180 degree, 360 degree, 540 degree, 720
degree price up from the low.
Step 3: Draw the horizontal lines at those

prices.
Step 4: Take the square root of low and

adjust it to an integer value. Say it as B.
Sept 5: Draw the vertical lines by counting

the B number of days from the low.
Continue this process for 4 to 5 steps.
Step 6: Draw the channels by joining the

intersections, points of the horizontal and
vertical grids.
22
Example : Construct a Gann channel us-

ing the swing low of SBI ?
Do this as your 1st assignment.
23
24
Gann’s Method Squaring Price with Price
Chapter 2
Squaring Price with Price

2.1 Introduction
2.2 Squaring price with price
2.3 Converting price to degree
2.4 Trade decision using price squaring

action
25
26
Chapter 2
Squaring Price with Price
2.1 Introduction:
Gann always stressed upon three things in

order to predict the future price movement
of a stock or commodity. They are 1. Price,
2. Time 3. Pattern. He establishes the
geometrical relation between the price and
time for predicting the future movement. If
you see Elliot’s wave theory, Gann theory and
Fibonacci theory, you will find one common
thing that all these theories are based on the
harmonic nature of price. This is a truth in
the capital market.
2.2 Squaring price with price:
In chapter-1 I have discussed how the price

is related to each other in a Gann’s square of
27
nine table. Before going deep into the

subject we should understand the Gann
square. Gann always specified that price,
time and pattern have a strong relation with
the geometrical figures like circle, triangle,
rectangle and hexagon. He also proved it
that the prices falling in the edge, diameter
of these objects are the key resistances and
supports of the current price movement.
What is a Gann square?
The rectangular spiral formed by placing

a number at the centre of the object is
called a Gann square. In chapter-1 Gann
wheel picture the four dimensional body
inside the circle is called a Gann square.
The horizontal line and the vertical line

containing the Gann squares centre number
are called cardinal.
28
Gann Square
57 58 59 60 61 62 63 64 65
56 31 32 33 34 35 36 37 66
55 30 13 14 15 16 17 38 67
54 29 12 3 4 5 18 39 68
53 28 11 2 1 6 19 40 69
52 27 10 9 8 7 20 41 70
51 26 25 24 23 22 21 42 71
50 49 48 47 46 45 44 43 72
81 80 79 78 77 76 75 74 73
Construction of the Gann square is quite easy.

It requires three inputs that is the starting
price, increments and the factor. If you see
the above Gann square table the starting price
is 1, increment is 1, and the computing factor
is also 1. Many working model is available
on line to construct Gann wheel.
29
What is Gann angle?

Gann has specified 11 different angle
combinations as follows:
1 X 16 = 86.25 degrees
1 X 8 = 82.5 degrees
1 X 3 = 71.25 degrees
1 X 2 = 63.75 degrees
2 X 1 = 26.25 degrees
3 X 1 = 18.75 degrees
8 X 1 = 7.5 degrees
16 X 1 = 3.75 degrees
1X1 angle is translated as one unit rise in
price with one unit rise in time.Though
Gann does not specify any scale on
30
how to place price and time in the X and Y

axis to derive these degree but Robert W.
Colbyin his book “the Encyclopedia of
Technical Market Indicators” Second
Edition, McGraw-Hill Publishing, 2003
mentioned that one unit of price will be taken
as 1/16th of an inch and one week of time
period will be taken as 1/16th of an inch to
draw ganns chart. But this is a standard
followed in all the s/w having the gann tools.
In very simple words, ‘Gann angles are the
slopes of the line made with x axis if you
will place prices and time in the order of
1X1,1X2,1X8 and so on.’
2.3 Converting price to degree:
Formula: - Mod ((sqrt(N)*180)-225,360)
This excel formula will convert any number
of your choice into degrees. Numbers
having same degree line square with each
other and considered as the major support
and resistance area.
31
Example: Below mentioned are the 4

weeks OHLC (open, high, low, and close)
data of SBI. Explain price squaring
relation?
Date Open High Low Close D1 D2 D3 D4

30-07-2007 1524.45 1614.8 1509.8 1578.05 323 168 289 85
31-07-2007 1622 1635.6 1540.05 1623.85 184 215 359 188
01-08-2007 1610 1610 1540.2 1548.05 157 157 359 17
02-08-2007 1550 1626 1544 1592.8 21.6 193 7.88 119
03-08-2007 1620 1652.4 1610 1635.75 180 252 157 215
06-08-2007 1610 1699 1580 1681.9 157 354 89.9 317
07-08-2007 1690 1725.9 1672.55 1682.1 335 52.9 296 317
08-08-2007 1700 1734.8 1698 1706.85 357 72.2 352 12
09-08-2007 1727 1728 1641 1650.6 55.3 57.5 227 248
10-08-2007 1601.55 1614.95 1575.2 1606.95 138 169 79 151
13-08-2007 1620 1629.9 1595.1 1613.05 180 202 124 164
14-08-2007 1636 1636 1604 1615.3 216 216 144 169
16-08-2007 1550 1557.9 1517.25 1520.95 21.6 39.6 306 315
17-08-2007 1510 1543.7 1461.05 1519.2 290 7.19 175 311
20-08-2007 1575 1590 1540.05 1549.65 78.5 112 359 21
21-08-2007 1565 1565 1451.25 1463.3 55.8 55.8 152 181
22-08-2007 1472.05 1504 1420 1458.8 201 276 77.9 170
23-08-2007 1480 1499.9 1407 1414.75 220 266 46.8 65
24-08-2007 1455 1472.9 1425 1466.05 161 203 89.9 187
27-08-2007 1519 1563 1486 1554.75 310 51.3 234 32
32
In the above table I have converted all OHLC

data to degree format by using the above
formula. Now consider 27th August closing
price 1554.75 which is 32 degree. All closing
prices having 32 degree or multiple of 32
degree will square with this price. You can
grant error up to 7 degrees. Hence 23rd
August 07 price 1414.75, 13th August 07 price
1613 squares with the prices and act as the
support and resistances of the next move.
2.4 Trade decision using price squaring action
Whatever I have discussed earlier is with

respect to the past event. Now see the present
event. Gann traders believe that the prices
45 degree, 90 degree, 180 degrees are
important for trade decision. Hence price
above or below from the present price by 45
degree, 90 degree, 180 degree factors will act
as a point of trade decision. Squaring angles
up from the computed angle
33
(i.e. in our example 32 degree) is calculated

by adding 45, 90,180 to the computed angle
and vice versa. Below mentioned table
displays the squaring angle of 32 degree
and its price conversion using square root
formula (explained in chapter 1).
Angles up from 32 Angle factors price

77 0.43 1589
122 0.68 1609
212 1.18 1649
Angles down from 32
13 0.072 1549
58 0.32 1529
148 0.82 1491
With respect to the closing price of 27th

August 07 i.e. 1554.75 the next level of
resistances are 1589, 1609, 1649 and
support 1549, 1529, 1491.
34
Below mentioned data is the price data from

27th August to 3rd September 07.
Date Open High Low Close

27-08-2007 1519 1563 1486 1554.75
28-08-2007 1575 1575 1541 1550.6
29-08-2007 1504.1 1585 1504.1 1573.85
30-08-2007 1584 1604.7 1559 1570.85
31-08-2007 1570 1618 1570 1600.35
03-09-2007 1619 1623 1602.35 1606.65
On 28th August if I have to initiate a trade in

the opening session using this principle then
I will observe the opening price which is well
below the 1st level of resistance 1589. This is
also the price falling below 45 degree line. it
is a bearish signal. I will enter a sell order
keeping my stop loss at 90 degree up price
i.e. 1609. my initial target will be 45 degree
down price from 32 degree price point that is
1549. If you observe the 28th day data then I
am very much in the target.
35
This method is not discussed by any gann

expert. Based on gann principle, taking
the previous day data I have innovated
this static technique for day traders. This
is one of the best static techniques for day
traders. I never claim that it is a full proof
technique but it works well in an unbiased
and less volatile market.
You can experiment this with 60 degree and
its multiples also.
36
Gann’s Method Current Price and Past Time
Chapter 3
Current Price and Past Time
3.1 Introduction
3.2 Squaring current price with past

time
3.3 Conclusion
37
38
Chapter 3
Current Price And Past Time
3.1 Introduction:
In the earlier two chapters we have discussed

the price squaring action. Now from this
chapter onwards we will discuss the price and
time squaring actions. Price and time squares
with each other in five different ways. From
chapter 3 to chapter 7 we will discuss one by
one. Each chapter will tell you how to use
these techniques. Always the price action is
not a silent activity. For example if you
consider SBI, on the 2nd week of August 07 it
made high of Rs1700/- plus and in the
following week it touches a low of Rs1400 /
- plus. In the month of September 07 when it
is trading at Rs1600/- plus, what kind of
decision I shall take? This decision process
will be discussed in this chapter using Gann’s
square of nine principles.
39
3.2 Squaring current price with past time
In chapter-2, I have explained how to

convert the price to degree. In this chapter
I will give a relation between time and
degree. Go back to your elementary
mathematics, years back when you were
in your upper primary standard your teacher
would have taught you a relation that is 1
degree is 4 minutes. If you will convert your
number of trading days into the degree
format then you need to convert it to hour
then minute format. Once it is converted
to degree you need to divide it by 360 to
find out the number of rotations you have
taken from one price change to other price
change.
Example 1:SBI 8 th August high was

1734.8, 23rd August low was Rs 1407/- and
current price is Rs1610/- on 4th September.
What will be my decision based on
40
price time relation? From high to low it has

taken 11 trading days and 16 calendar days.
This is, 24 X 11 X 60 = 15840 minutes. If
you divide it by 4 then it will be 3960 degrees.
One circle rotation is 360 degree. These 11
rotations will complete 3960 degrees. This I
have explained to understand the degree and
time relation. But this calculation will always
result the number of days as the minutes can
be represented as days. So straight way you
can take the number of days.
Once it is converted to the number of rotations

we will treat the days as a mere number
nothing other than that. Convert that number
to degree using MOD function as discussed
in the chapter 2. The number 11 is 12 degree.
Its 0, 45, 90,180 and 270 degree offsets are
12, 57,102,192,282.
Converting 16 calendar days to degrees we

get 135 degrees.
41
Now convert the low 1407 to degree which

is 47 degree. The 0, 90,180, 270 degree of
set of the price are 47,137,257, 317.
From this I conclude the 16 calendar days

is squaring with the low 1407 at 90 degree
offset i.e. 47+90=137, which is two degree
more as compared to the calender days
(degree conversion) .
Now the Gann square prices will be 90

degree addition starting from 137 and time
scale will be 16 period counts starting from
23rd August.
Angles up from 47 Angle factors

137 0.761 1465
257 1.428 1516
317 1.761 1542
407 2.261 1582
497 2.761 1622
587 3.261 1662
42
The point at which the current price squares

with the time, the current trend ends there.
In our case the price 1465 squares with the
time 16 calendar days. This is a confirmation
signal that the down trend ends once the price
crosses 1465. After this cross over if the
upward march is continuing the script will
take next 16 trading sessions to touch its all
time high to complete one cycle of harmonic
motion.
The price square is completed on the day

following the 23rd August low. On 12 days
from the 24th August the script is at Rs
1610 /-. Hence the price is in between 407
and 497 (4th and 5th row in the table).
Therefore buying is advisable here by
keeping the stop loss at 1582 and target 1662
to 1740 in next 4 calendar days.
Though many books have told about how
price in current trend squares with the time
in prior trend but they do not explain
43
which price will be considered as a change

of trend indicator. Very precisely Gann
has specified that when price and time
will square the pre-existing trend will die
and new trend will start. In our example
of SBI the down trend will end when the
price cross above 1465.
How much time it will take to cross this

price?
The price Rs 1465/- is almost in the 15 %

retracement from the high Rs1734.8. The
15% retracement of 16 calendar days is 2.4
days, round it to 2 days.
So we conclude that by using Gann price

in current trend with time in prior trend if
the stock moves above 1465 in next two
calendar days then this should be taken as
a time and price squaring action.
44
This price will be considered as the strong

support for the forthcoming trend.
If this cycle continues then the stock will

touch its high in the coming 14 days. This
does not hold good always. If neither the
trading days nor the calendar days in the prior
trend square with the price in current trend
then you need to drop this method and see
for other methods discussed in other chapters.
So far we have been talking about the price,

time and the trend but not about volume. In
many Gann studies I did not find the
importance of volume. May be the reason
would be Gann was a commodity trader and
given more importance to price, time and
trend.
Through regular mind bugging exercises to
establish a perfect correlation of volume with
the Gann’s method, I found out when the
squaring of price and time happens with
45
rise in 10 days average trading volume the

prediction comes true or else it is just a
false signal. For better practice of this
method just have a look in 10 days average
trading volume before entering a trade. If
price action supports the volume then go
ahead with this technique, it will yield the
best result.
3.3 Conclusion:
To use this technique following steps are

given.
Step-1: Identify the high –low or low –

high or high- high or low-low of a prior
trend.
Step-2: Convert the low or high to degrees.
Step 3: Compute the +45, +90, +180, +270

and -45,-90,-180,-270 degree offsets of
46
converted price degree.
Step 4: Count the number of calendar days

and number of trading days between this high
–low or low –high or high- high or low-low
of the prior trend.
Step 5: Convert days to degrees.
Step 6: The price offsets degree which

coincides with the time degree called the
‘price time square’.
Step 7: Convert that price offsets degree and

its higher order degrees to price using degree
factors.
Step 8: Take the current market price and

compare with the computed price and the
elapsed days to take a trade decision. It
will not even take more than 2 to 3 minutes
to decide upon a trade by using this method
47
These 8 steps can be put on an excel sheet

and just do the job in one click of mouse.
It will not even take more than 2 to 3
minutes to decide upon a trade by using
this method.
48
Gann’s Method Price Range and Time
Chapter 4
Price Range and Time
4.1 Introduction
4.2 Number to degree conversion table
4.3 Squaring price range and Time
4.4 Conclusion
49
50
Chapter 4
Price Range and Time
4.1 Introduction:
In the previous chapter we have discussed

about current price and previous time
squaring action. In this chapter we are going
to discuss about how the price range in the
prior trend squares with the time in the prior
trend. If you happen to know the Fibonacci
Retracement Technique, this is one more way
of retracement technique by taking static
point increment and decrement. In this
chapter I will discuss few interesting intraday
techniques for serious traders. Just take a print
out copy of ‘the number to degree conversion
table’ and keep it on your table. With the help
of a pencil you can be able to take a trade
decision by using this technique.
51
4.2 Number to degree conversion table:

Number Degree Conversion table
Number Deg Number Deg Number Deg Number Deg Number Deg
1 315 32 73 63 124 94 80.2 125 347
2 30 33 89 64 135 95 89.4 126 355
3 87 34 105 65 146 96 98.6 127 3.5
4 135 35 120 66 157 97 108 128 11
5 177 36 135 67 168 98 117 129 19
6 216 37 150 68 179 99 126 130 27
7 251 38 165 69 190 100 135 131 35
8 284 39 179 70 201 101 144 132 43
9 315 40 193 71 212 102 153 133 51
10 344 41 208 72 222 103 162 134 59
11 12 42 222 73 233 104 171 135 66
12 39 43 235 74 243 105 179 136 74
13 64 44 249 75 254 106 188 137 82
14 88 45 262 76 264 107 197 138 90
15 112 46 276 77 274 108 206 139 97
16 135 47 289 78 285 109 214 140 105
17 157 48 302 79 295 110 223 141 112
18 179 49 315 80 305 111 231 142 120
19 200 50 328 81 315 112 240 143 127
20 220 51 340 82 325 113 248 144 135
21 240 52 353 83 335 114 257 145 142
22 259 53 5.4 84 345 115 265 146 150
23 278 54 18 85 355 116 274 147 157
24 297 55 30 86 4.25 117 282 148 165
25 315 56 42 87 13.9 118 290 149 172
26 333 57 54 88 23.5 119 299 150 180
27 350 58 66 89 33.1 120 307 151 187
28 7.5 59 78 90 42.6 121 315 152 194
29 24 60 89 91 52.1 122 323 153 201
30 41 61 101 92 61.5 123 331 154 209
31 57 62 112 93 70.9 124 339 155 216
52
If you happen to observe the number degree

conversion table then see number 1, 9, 25,
49 squares with each other since all of them
are 315 degree.
4.3 Squaring price range and Time :
You can find the price range from close to

close, high to low, low to high in a particular
time range. Convert the price range to degree
and compute its offset. Take the total trading
days and calendar days in that price range.
Then from the table find out its degree
equivalent. The price offset which coincides
with the time offset is considered as the
squaring points. Trade decision will be taken
at this point.
This mathematical thing looks very simple

but in reality these are bit difficult to take
one uniform trade decision.
53
What makes me to rely on these

methods?
While following the retracement

techniques I have limitations for static point
retracement ratio. Though this is also a
static point technique but I have the
freedom to make it dynamic. See the next
example to know the importance of this
technique.
Example 1:
On 5th September 07 Nifty touched intraday

high of 4503 at 10 a.m. and touched low of
4464 at 11.50 a.m. Based on the price in
current trend to the time in prior trend
suggest what type of trade decision I
should take ? Below the intraday chart is
given for reference.
54
From the above data I have understood that

from high to low I have travelled 4503-4464
= 39 points and it took 1 hour and 50 minutes
for me which is almost 110 minutes. Taking
5 units as one unit we get 22 units of time.
The conclusion is for 39 units of price change
we take 22 time units.Converting the 39 and
22 to degree format we get 179 and 259
degree which never squares with each other.
55
Now use the dynamic approach in time, by

reducing the time units by one and
converting into degrees or finding the
numbers which squares with 39 from the
number to degree conversion table given
above. We found 18, 39, 68 time unit
squares with price range. 18 is 4 time units
less from 22 time units and it will be an
ideal choice for this job rather than 39 and
68 units.
Now the price range 39 squares with 18

time unit at angle 179. Round it to 180.
Hence my new range will be
N(R) = ( 39+1)2 = 52.49
N (R) = Price range of square to end.
In the next move in 18 time units if I will

move 52.49 points in price line then I will
complete a square.
56
Dividing 52.49 with 18 we got 2.91. Hence

in each time unit I need to move 2.91 (round
it to 3) point in price to complete the square
and in this journey these prices will act as a
resistance for me.
Price squares time Resistance Time
Unit 1 resistance 4466.916 11.55 a.m.
Unit 2 resistance 4469.832 12 p.m.
Unit 3 resistance 4472.748 12.05 p.m.
Unit 10 resistance 4493.161 12.40p.m.
Unit 14 resistance 4504.826 1p.m.
57
This square will not complete until and

unless 4516 level is not crossed. If you see
the chart in the subsequent time period nifty
will find resistances in those prices.
White paper proof:
At 11.55 a.m. from 4471 Nifty fell to 4469

At 12.05 p.m. from 4475 Nifty fell to 4471
At 12.11 p.m. from 4478 Nifty fell to 4472
Though the time and price are not matching

because of the adjustments we made in time
but the resistance prices are matching
perfectly in 5 min chart. If you will get an
exact match of time and price square, the
time factor also works out precisely.
What is the trade decision? The price
squares with time in 180 degree and hence
180, 360,540,720 are the angles of interest.
The factors will be 1,2,3,4. One should buy
on 4516 cross over which is factor 1 price.
58
Target will be 4532 which is factor 2 price.

Stop loss will be 4464 which is 0 degree from
the 180 degree price 4516. This will be valid
for that day.
This is very much useful for intraday. Based

on these levels and applying our own
intelligence you can take any number of trade
decisions.
Gann specifies each price as an ‘energy

packet’. If it crosses one price time square,
the energy completes one circle and has the
tendency to cross the next circle. In this theme
‘Elliot wave theory’ was also defined.
This above technique is not been defined by

any Gann expert till date. This theory only is
interpreted by many Gann experts time and
again. Fact is Gann experts always treat this
method as a static method not a dynamic one.
The way I have adjusted the time same
59
way you can adjust the price range with

the elapsed time and derive one more set
of resistance and support.
In wave principle, cross over of one

resistance level act as a support for the next
resistance. Three consecutive support
breaks should be considered as an exit
point. Three consecutive resistance break
out should be considered as a point of entry.
This principle you should follow if you
want to enter the trade inside the square.
Example 2:
Below mentioned table contains one week
data of SBI based on price in current trend
with time in prior trend.Analyse what will
be the most probable forecasted price ?
30-07-2007 1524.45 1614.8 1509.8 1578.05
31-07-2007 1622 1635.6 1540.05 1623.85
01-08-2007 1610 1610 1540.2 1548.05
02-08-2007 1550 1626 1544 1592.8
03-08-2007 1620 1652.4 1610 1635.75
60
In the week starting 30th July 07 to 03rd august

07, the script made high Rs1652.4 and low
Rs1509.8. Hence the range is Rs142.60
Round it to Rs142/-. The time is 5 trading
days and 5 calendar days.
Converting it to degree; number 5 is 177

degree and number 142 is 120 degree. The
price squares the time in +60 degree offset.
That is 120+60= 180 just 3 degree more from
the time degree conversion, this is an
acceptable error. Hence 177,237,297,357 are
the angles where the price will square with
time. But we require only one value that is
177. For mathematical simplicity take it as
180 degree.
Hence the price range for squaring is ( 142

+ 1)2 =166.83. Round it to 166. If the price
moves Rs166/- in 5 time units then it will
complete this upward journey.
61
But in our case two week-ends are falling

from the last trading day 3rd August to 6th
August. Hence take the time unit as 7
instead of 5. Hence the price unit 166 will
be divided by 7 to produce one unit change
in price with time. That is 166/7= 23.71.
In price term 1652.4+166=1818.4, is the

price at which this up trend will end in
coming 7 calendar days. During this period
it will find resistances as given in the
following table.
Price squares time Resistance Time

Unit 1 resistance 1652.4+23.71=1676.11 6th august 07.
Unit 2 resistance 1676.11+23.71=1699.82 7th august 07
Below mentioned is the OHLC of SBI from

6th August 07 to 10th August 07.
62
Date open high low close

th
6 aug 07 1610 1699 1580 1681.9
th
7 aug 07 1690 1725.9 1672.55 1682.1
th
8 aug 07 1700 1734.8 1698 1706.85
th
9 aug 07 1727 1728 1641 1650.6
th
10 aug 07 1601.55 1614.95 1575.2 1606.95
The unit 2 resistance is coinciding with the

6th August high. 7th August high coincides
with unit 3 resistance.
Why this time is advanced by 1 day? The

exact cause of this is still beyond my
understanding. But I see all months having
31 days exhibit such action.
What will be my trade decision?
The squaring of current price with time in

prior trend is far from the current market
price.
63
It is advisable to do the trade inside the

square. Cross over of one resistance level
should be taken as entry point, bearing
target at the next resistance level and stop
loss at one step below the entry level.
In many cases the price range will not

square with the time in the prior trend. But
nothing to worry because we have other 3
methods to trap the price time action.
4.4 Conclusion:
To use this technique
Step-1: Identify the high to low or low to

high of a prior trend.
Step-2: Find out the price range.
Step-3: Convert the price range to degree.
64
Step-4: Compute the +45, +90, +180, +270

and -45,-90,-180,-270 or 60 degree and its
multiples or 90 degree and its multiples
offsets degrees.
Step 5: Count the number of calendar days

and number of trading days between this high
to low or low to high of the prior trend.
Step 6: Convert days to degree.
Step 7: The price offsets degree which

coincides with the time degree is called the
price time square.
Step 8: Convert that price time square and

its higher order degrees to price using degree
factors.
Step 9: Take the current market price and

compare it with the computed price and the
elapsed days to take a trade decision.
65
These 9 steps can be put on an excel sheet

and you can do the job in one click of
mouse. It will not even take more than 2 to
3 minutes to decide upon a trade by using
this method.
66
Gann’s Method Price Range and Time in Current Trend
Chapter 5
Price Range and Time in Current

Trend
5.1 Introduction
5.2 Squaring the price range of prior trend

with time in present trend
5.3 Extreme price and time in current

trend
5.4 Squaring price and time in current

trend
67
68
Chapter 5
Price Range And Time In Current Trend
5.1 Introduction:
In chapter-4 we have discussed how the price

range in prior trend squares with the time in
prior trend. In this section we are going to
discuss how the price range in prior trend
squares with the time in the current trend. In
earlier chapter we used to compute the price
range, the time elapsed in that price range
and based on this we used to compute the
future price resistance and support. Thing
will be more realistic and live if we will be
able to time the trend in advance. This
chapter will teach you this wonderful
technique of Gann to predict the time in
advance.
69
If someone asks you SBI has fallen from its

high 1734 to 1407 in 15 trading days,
Advise me how many days from this low
of 1407 it will take to touch 1650, then you
may not be in a position to answer this .
This is a question Gann faced time and
again and he has solved it in a more precise
way. It is not a miracle. It is not astrology.
It is the power of number. Each number is
hiding the mystery of his future number.
Many Gann experts understood his formula
in a right way, but failed to apply in real
life example.
This Chapter is having all the essence to

answer the above puzzle in scientific
manner.
5.2 Squaring the price range of prior trend
with time in present trend.
In previous chapter we have learnt the

conversion technique to convert the
70
numbers to degree.
We also learnt the square root theory to

convert the degree to number by using the
degree factor.In this chapter we will learn a
new formula to convert degree to number
which squares with the original number. I feel
after learning this formula all your purpose
is solved.
Numbers falling on particular angle:
((2 X N) + ((2 X A)/360) +1.25) 2
N is the number of rotations you want in a

spiral. It starts with 1.
A is the angle of your choice.

1.25 is a standard constant for square.
The proof of this formula lies in your 7th

standard mathematics.
71
Example 1: You are being provided with

Tata Steel past 2 weeks open-high-low-
close data. Considering the one week data
as prior trend and 2nd week time as current
trend predict what will happen in the
following days?
25-Jun-07 599.75 603.75 593.2 600.15
26-Jun-07 599 610.85 597.7 604.15
27-Jun-07 602 603.45 588.8 592.65
28-Jun-07 592 599.45 588.1 593.5
29-Jun-07 592 601.8 591.35 597.4
02-Jul-07 597.4 608.7 592.2 593.45
03-Jul-07 594 605.8 591 600.75
04-Jul-07 603 618.8 599 616.35
05-Jul-07 620.55 630 614.5 628.1
06-Jul-07 628.65 635.5 621 623.3
The high to low price range in the previous

two weeks is 635.5-591= 44.5 .Round it to
44. In degree terms it is 249 degree. In the
first week the script moves from low to
high. Time elapsed from 1st week high to
end of 2nd week is 5 trading days and 7
calendar days. The degree equivalent of 5
and 7 are 177 and 251. The price range
squares with the time in calendar days in 3
72
degree off set. This is an acceptable error.

Now our job is to predict the time and price
action for the future week.
The number of calendar days which squares

with the time in this up trend based on the
formula (given in page 71) is 21, 44, and 74.
In the coming 21 calendar days from 6th July

07 the price trend is going to change. If it
does not change then the same trend will
continue for another 23 days (i.e. 44-21) from
there.
What will be the price for this termination

points?
Converting 21 days to degree we get 240

degrees. The 240 degree is 1.33 in factor
terms. Using the square root theory taking
the highest value 635.5 as the initial point
we have: ( 635.5+1.33)2 = 723.5
73
723.5 is the 1st termination point for this

uptrend.
During this journey of 21 calendar days the

price range will be 723.5 – 635.5 = 87.5
It will find the resistance at various points
given in the following table. In one time
unit the range is 4.16 i.e. 87.5/21.Adding
this price to the Rs 635.5 the consecutive
21 resistance points are as follows.
RS1 640
RS2 644
RS3 648
RS4 652
RS5 656
RS6 661
RS7 665
RS8 669
RS9 673
RS10 677
RS11 681
RS12 685
RS13 690
RS14 694
RS15 698
RS16 702
RS17 706
RS18 710
RS19 715
RS20 719
RS21 723
74
Below mentioned is the 21 days price data of

Tata Steel from 9th July to 31st July 07.

09-07-2007 627 632 622.1 626.5
10-07-2007 629 638 624.2 634.1
11-07-2007 630.1 661 627 655.5
12-07-2007 662.1 674 660 672
13-07-2007 672 699.5 672 695.8
16-07-2007 699.7 712 686 694.8
17-07-2007 694.1 702 674.1 681.1
18-07-2007 682 691 660.3 682.8
19-07-2007 686 692.9 678.7 682.5
20-07-2007 684 720 684 715.2
23-07-2007 712 726.6 710 721.1
24-07-2007 723.4 732.4 709 721.8
25-07-2007 720.5 725.7 702.2 709.4
26-07-2007 712 717.9 697 703.7
27-07-2007 695 697.2 646.2 651.6
30-07-2007 655 675 635 643.5
31-07-2007 646.9 659.8 642.3 656.3
If you observe this price data the termination

of this uptrend happens 3 days in advance
from the price range of 723 after the script
made 4 consecutive attempts to close above
75
this level. Out of these 21 resistance levels

8th, 10th, 13th, 16th and 18th resistances are
very important. That is the 0.382, 0.5,
0.618, 0.786, 0.888 level retracement of
21 days. From price data if we will observe
the high then these prices has proved
themselves as potential resistances.
How to enter a trade?
If the price range and time is very wide

then it is better to enter a trade inside the
square. To my idea entering a long trade
above 38.2% resistance for target as the
termination point will be the best choice.
Same way if the trend changes signal and
stock falls below 78.6% support zone after
touching the termination price then it is
advisable to initiate a short trade.
76
5.3 Extreme price and time in current trend
In this section we are going to discuss one

more combination of price time squaring
action. Gann’s method has not only the price
time squaring but also geometrical angle
transformations. We will discuss few more
interesting things in the subsequent chapters.
This method of Gann’s square exhibits how
the ending price of one of the prior trend
squares with the time in current trend.
Example : On 4th January 07 Tata motor hit

the high 988.4 and then fell to low of 712 on
07th March 07 . Using price in prior trend with
time in current trend advice what kind of trade
decision is advisable?
Below mentioned is the price and time chart

of Tata motor, given for reference.
77
78
Total number of calendar days is 63 and the

number of trading days is 41. Now the highest
price from where the trend change happens
in the prior trend is 988.4. Convert these three
things to degrees using the formula discussed
in the chapter 1, we get 988.4 is 34 degree,
63 calendar days are 124 degree, 41 trading
days are 208 degree.
Hence the price in prior trend squares with

the calendar days’ time in 90 degree offset,
since 34+90=124. Now using the degree to
number conversion formula as discussed in
this chapter
For N = 1, number of days which will square
with the 63 calendar days is 15.
For N= 4, number of days which will square
79
Your count will start from 7th March. From

7th March 07, the 15th, 35th, 63rd and 98th
calendar days we will see major trend
change in this counter. As per the
calculation 21st March, 10th April, 8th May
and 12th June are the days of major trend
change in this counter.
Price action 124 degree is equivalent to 0.69

in factor terms. Hence price from 712 in
this factor will act as the resistances from
this price. But in this case the calculation
will differ a bit.
Using the square root theory
The 1st level of resistance will be ( 712 +

0.69)2 =749.
1st level of support corresponding to 1st level
of resistance is ( 712 - 0.69)2 = 675
2nd level of support corresponding to 1st
level of resistance is ( 675 - 0.69)2 = 639
80
3rd level of support corresponding to 1st level

of resistance is ( 639 - 0.69)2 = 605
4th level of support corresponding to 1st level

of resistance is ( 605 - 0.69)2 = 572
2nd level of resistance will be ( 749 + 0.69)2

=787.
1st level of support corresponding to 2nd level
of resistance is ( 749 - 0.69)2 = 711
3rd level of resistance will be ( 787 + 0.69)2

=826.
1st level of support corresponding to 3rd level

of resistance is ( 787 - 0.69)2 = 749.
If you will relate this price data with the

squaring time the 4 th period time data
perfectly coincides with the 4 th period
support. Exactly on 12th June 07 the script
falls to 575 and close at 641. The question is
81
why this 4th period time 98 days give the

accurate result but not other forecasted
times.
To explore this I have gone into the original

writings of Gann. That I have given in this
book as a separate chapter in chapter 6.
Gann specified 3,5,7,9 and 12 are the

master numbers. Out of which 7 is the most
important, its square 49 also important, its
second square 98 also important, and its
third square 147 also important. Number 5
he considered as balancing number.
Number 3 is in the list next to 7.
From the computed days 15, 35, 63 and

98; 98 is the most important day since it is
the 2nd square of 7. Hence we see a greater
price action on that day. The number 15
and 35 is containing the balancing number
5 in its factor hence less price action
82
we have seen in these days. Number 63 also

contains number 3 as a factor in its multiple
9x7. Hence we see less activity on that day.
I made a small change in Gann’s method in

this junction. Since the calendar days 63
squares with the price. I have factored it as
3x3x7 and taken the most powerful master
number in that factor which is 7. Then 7
calendar days and its multiple 7,14,21 days
act as my point of observation. I have taken
those days from 7th March to observe the price
change . I found 14th March, 21st March, 28th
March 07 also act as the days when major
price change happened.
No need to break your head in this number

game. Simplest way to apply this technique
is; in price line on the specified day count if
you are above the support point of its price
then go long. If you are below the support
point go short.
83
In our example on 21st March Tata motor

opened at 772, touched high 778, low 760.
This price is much above the 1st level of
resistance and support. In this point going
long in this counter is advisable with stop
loss of 749 for target 787. This target is
achieved in the next trading session. Same
way taking a short call on 3rd level of
resistance is advisable for target of 2nd level
of support.
Once one resistance is crossed convincingly
it used to become a potential support point.
Second most important thing is Gann has
always specified that 3 consecutive rise or
fall should be taken for identifying a trend.
These two things we need to follow in all
Gann’s techniques.
5.4 Squaring price and time in current trend:
This is the technique for which you have
been waiting for long time. We all the capi-
tal market players do not believe on past
rather than present.
84
Gann’s method and tool is the only method

which value only to present but not to the
past. For example if some one asks you, SBI
has fallen from 1734 to 1507 in a time frame
of two weeks then what will be the next move
in the SBI in coming days considering these
two points are swing high and swing low. In
what time frame it will hit what price in
future? The answer of this amazing
technique lies in this chapter.
Example: SBI from its 4th December 06 high

1379 fell to 898.10 on 16th March, 2007. After
touching this low it gave a swing reversal.
What will be its next move in price in future
time period?
In terms of calendar days it is 103 calendar

days (from 4th December to 16th March) and
69 trading days. The price range in that
duration is 1379-898.10= 480.9. Round it to
480.
85
Converting this 480 to angle is 119 degree,

103 is 162 degree, and 69 is 190 degree.
The 45 degree price offset is 119+45=164.
This squares with 103 calendar days by 2
degree difference hence it is an acceptable
error. Hence the days of my interest will
be the days falling in the 162 degree angle.
Using the formula ((2 X N) + ((2 X A)/

360) +1.25) 2
Iteration 1:
Considering N=1, angle 162 we get number
of days 17. That is 1st April 07 (non trading
day)
Iteration 2:
Considering N=2, angle 162 we get
number of days 37. That is 21st April
07(non trading day)
Iteration 3:
Considering N=3, angle 162 we get
number 86
of days 66. That is 20th May 07 (non trading

day)
Iteration 4:
of days 103. 26th June 07 (non trading day)
Iteration 5:
of days147. 9th August 07 touches high 1728.
Hence we conclude that the stock will take

the 147 calendar days from the low 898 to
touch the new high of the current swing.
What will be the price at that time?
The price will be the summation of the mid

point of swing low and swing high and the
new price range will be based on 162 degree
factor. (1379+898)/2 =Rs1139/-.
87
The factor equivalent to 162 degree is 0.90.

Applying the square root theory the price
range is ( 480 +0.90)2 = 520. Target price
of the current swing will be 1139+520=
Rs1659/-
Some amount of ambiguity lies in this

method. Since the swing we have taken for
computation is a static one and long enough
for the stock analysis we will discuss one
more example based on this to clarify the
action.
Example 2: Take the case of nifty intraday

on 7th September it made swing high of
4544 at 13:02 p.m. and swing low 4518 at
13:43 p.m. Explain how the price and time
in current trend affect the future movement.
The price change is 26 points in 41 minutes.

Taking 5 minute as one trading session and
1 min as 1 calendar session we have 41
88
calendar sessions and 8 trading sessions.

Number 8 is 284 degree, number 26 is 333
degree, and number 41 is 208 degrees. Hence
the price squares the trading time in 45 degree
offset. That is 333-45=288 just 4 degrees
more from the 284.
Hence the trend change time is 23 time unit

from 13:43 p.m. This is roughly at 15:34p.m.
Since we have closing at 15:30 p.m, we will
see the price change towards the end of the
session.
What will be the price action?
(4544+4518)/2 = 4531 is the initial level of

resistance.
4531+44= 4575 is the next level of resistance.
4531-44=4487 is the support for 1st level of
resistance.
For 2nd level of resistance 4531 is the support.
89
This support or resistance of 4531 is

supposed to hit in the mid way of 23 time
units that is by 14:35 p.m. time (23 time
unit is divided by 2 followed by
multiplication with 5 to give the time in
minute .That many minute from 13:43 p.m
is 14:35 p.m.).
How to initiate a trade?
Always initiate a trade in the cross over of

the initial level of resistance for the target
of second level of resistance. Keep the stop
loss below the 1st level of support.
More realistic view of Gann’s method we

will explore in the chapter 7.
90
Gann’s Method Gann Angle and gann dynamic principles
Chapter 6
Gann Angle and gann dynamic

principles
91
92
Chapter 6
Gann’s Angle
I have explained gann angle concept in

chapter-2. However now in this chapter you
are going to learn how this concept will be
used for making intraday trade decision. Say
I wish to draw a trend line at 1X1 (read it
“one by one”) gann angle. This means my
trend line is a straight line drawn in the price
time chart which makes an angle 45 degree
with the X-axis. You must ask me that how I
have derived the 45 degree. Quite simple!
This is a trend line drawn assuming 1 unit of
price change happens with 1 unit of time
change. If I will plot 1 unit of price change
with respect to 1 unit of time change in a semi
log scale and measure the angle with the help
of a protractor I will get the angular
measurement as 45 degrees.
93
For making an intraday trade decision we

need a point to make buy or sell entry. We
need a stop loss point and couple of target
points. Though this job can be done with
any guess work but we need perfection. The
perfection will be achieved only through
the mathematical calculation which is
accepted by the market.
W.D.Gann has given us 11 different trend

lines which will guide us in making a trade
decision. These trend lines are drawn based
on the geometrical angle proportion in X
and Y axis. For example the 2X1 (2 by 1)
trend line is drawn assuming the 2 unit of
price rise or fall happens in 1 unit of time.
This trend line makes geometrical angle of
63.75 degrees with X-axis when drawn
from a lower price point and projected
towards the higher price points. Similarly
this trend line will make 26.25 degrees with
respect to x axis when it will be drawn from
94
a higher price point and project towards the

lower price point. This is the mathematical
logic available in origin shifting, parallel line
algorithm.
Now the 11 sets of trend lines from a lower

price point towards the higher price point are
as follows 1X1, 1X2, 2X1, 1X3, 3X1, 1X4,
4X1, 1X8, 8X1, 1X16 and 16X1.
The geometrical angle made by these trend

lines with the X axis in an up move
correspond to 2X1= 63.75 degrees, 1X2=
26.25 degrees, 1X1= 45 degrees, 1X3= 18.75
degrees, 3X1= 71.25 degrees, 4X1= 75
degrees, 1X4= 15 degrees, 8X1= 82.5
degrees, 1X8= 7.5 degrees, 1X16= 3.75
degrees, 16X1= 86.25 degrees.The
geometrical angle made by these trend lines
with the X axis in a down move correspond
to 1X2= 63.75 degrees, 2X1= 26.25 degrees,
1X1= 45 degrees,
95
3X1= 18.75 degrees,1X3= 71.25

degrees,1X4= 75 degrees,4X1= 15 degrees,
1X8= 82.5 degrees,8X1= 7.5 degrees,
16X1= 3.75 degrees,1X16= 86.25 degrees.
Gann Formula for calculating the

support and resistance:
In gann study the 180 degree is considered
as factor 1. This is because between the sun
rise and sun set the solar motion happens
approximately 180 degrees and it is
considered as 1 day time.
The 2nd universal concept accepted by the

financial analysts is that the supports are
always calculated in a falling trend and it
used to be calculated from the high.
The 3rd universal concept accepted by the

financial analysts is that the resistances are
always calculated in a rising trend and it
used to be calculated from the low.
96
Gann formula for calculating the support

and resistance is as follows:
a. Support = (square root of (high)- Degree

factor)^2
b. Resistance = (square root of (low) +
Degree factor)^2
Trading Rules as per gann and as modified
by me (Soumya Ranjan Panda Author of
this book).
a. The 3rd support or resistance of any price
move is important (as per W.D.Gann).
b. In intraday trade 45 degree support break
(1X1 support) will favor sellers and 45
degree resistance (1X1 resistance) break
will support the buyers. Provided the
annual volatility of the trading
instrument must be higher than 50% (as
per my own research )
c. In low volatile or medium volatile
market (i.e. the annual volatility of the
trading instrument is less than 50 %)
97
the (1X4= 15 degree) resistance and

(4X1=15 degree) support must be
utilized for long and short entry provided
no congestion or entry error should be
present in the calculated price. (as per
my own research )
d. If sell entry price at 15 degree or at 45
degree greater than buy entry price at
15 degree or 45 degree price point then
it is considered as error and rectified by
changing calculation procedure from the
high and low to mid point of high and
low. This says that instead of calculating
the supports down from high and up
from low you can calculate the same
from the mid point of high and low (as
per my own research )
e. If the price unit of the trading instrument
is a 4 digit number then between the buy
entry and sell entry price at least 5 unit
difference is required to take unbiased
decision as per this principle or else
98
it is considered as congestion and it is

rectified by changing the high and low
to mid point. (as per my own research )
f. If the price unit of the trading instrument
is a 3 digit number then between the buy
entry and sell entry price at least 3.5 unit
difference is required to take unbiased
decision as per this principle or else it is
considered as congestion and it is
rectified by changing the high and low
to mid point. (as per my own research )
g. If the price unit of the trading instrument

is a 2 digit or single digit number then it
must be converted to 4 digit number by
the way of multiplying it with 10 or 100
or even with 1000 and the resistances
and supports will be derived from the 4
digit number. And the results need to be
divided by the multiplier to reconvert it
back to its original form. (as per my own
research )
99
h. The smallest time interval in which you

can identify the high and low is 5 minuets
after the opening bell or the highest time
interval you can consider is the 1st 15
minute after the opening bell. Any
auction period must be ignored. Like
now in Indian market 9 a.m. to 9 :15a.m
is considered as call auction period.
Hence the data from 9 a.m. to 9:15 a.m.
must be ignored (as per my own research
)
i. If any of your trade triggers the stop loss
or trailing stop loss then do not re-enter
the trade in the same direction again.
As a day trader, speculation is my

profession and I will follow these
calculations like religious testimony.
Example: on 11th November 2010 SBI
between 9:15 to 9:30 a.m. made high
3238.35 at 9:16 a.m. low 3214.10 at 9:27
a.m.
100
Below given are the calculation of resistances

and supports for reference.
Low High
3214.1 3238
Degree Degree Factor Resistance Degree Factor
16X1 86.25 0.479166667 3268.6604 1X16 86.25 0.479166667 3184.0442
8X1 82.5 0.458333333 3266.2787 1X8 82.5 0.458333333 3186.3958
4X1 75 0.416666667 3261.5178 1X4 75 0.416666667 3191.1015
3X1 71.25 0.395833333 3259.1387 1X3 71.25 0.395833333 3193.4557
2X1 63.75 0.354166667 3254.383 1X2 63.75 0.354166667 3198.1667
1X1 45 0.25 3242.509 1X1 45 0.25 3209.9592
1X2 26.25 0.145833333 3230.6567 2X1 26.25 0.145833333 3221.7735
1X3 18.75 0.104166667 3225.9219 3X1 18.75 0.104166667 3226.5053
1X4 15 0.083333333 3223.5558 4X1 15 0.083333333 3228.8725
1X8 7.5 0.041666667 3218.8262 8X1 7.5 0.041666667 3233.6095
1X16 3.75 0.020833333 3216.4626 16X1 3.75 0.020833333 3235.9793
As per the above discussion and calculation

procedure we have made the calculation of
resistances and supports. As per the current
volatility condition we are being advised to
buy the stock at 3223.5558 or sell at
3228.8725. This is violating the point D trade
principle and considered as an entry error.
Henceforth we will change the high and low
to its mid point and do the fresh calculation
101
from the mid point. The mid point of

3238.35 and 3214.10 is 3226.225 . The
modified calculation table is as follows.
Low High
3226.225 3226.225
Degree Degree Factor Resistance Degree Factor
16X1 86.25 0.479166667 3280.8878 1X16 86.25 0.479166667 3172.0214
8X1 82.5 0.458333333 3278.5016 1X8 82.5 0.458333333 3174.3685
4X1 75 0.416666667 3273.7318 1X4 75 0.416666667 3179.0654
3X1 71.25 0.395833333 3271.3482 1X3 71.25 0.395833333 3181.4151
2X1 63.75 0.354166667 3266.5837 1X2 63.75 0.354166667 3186.1172
1X1 45 0.25 3254.6874 1X1 45 0.25 3197.8876
1X2 26.25 0.145833333 3242.8129 2X1 26.25 0.145833333 3209.6796
1X3 18.75 0.104166667 3238.0692 3X1 18.75 0.104166667 3214.4025
1X4 15 0.083333333 3235.6986 4X1 15 0.083333333 3216.7653
1X8 7.5 0.041666667 3230.9601 8X1 7.5 0.041666667 3221.4934
1X16 3.75 0.020833333 3228.5921 16X1 3.75 0.020833333 3223.8588
As per the modified calculation we are

advised to buy at 3235.6986 for final target
3280.8878 and sell at 3216.7653 for final
target of 3172.0214
Trade outcome:
1. At 9:34 a.m. We got a chance to sell at
3217 and kept out stop loss at 3235.70 as
per our calculation. Upon achieving the 1st
target 3214.4we trail to stop loss
102
to 3216.80, then upon crossing the 2nd target

we trail the stop loss to 3214.40.
Unfortunately after touching the low 3211 at
9:39 a.m. the trailing stop loss triggered at
3214.40 and we just bagged less then +3
points.
2. Considering our short trade adventure is
wrong and as per the last protocol set in the
trade rule we waited for the 3235.70 to come
which we have got a chance at 10:07 a.m.
and achieved till 3254 till 11:27 a.m. which
is close near to our 45 degree target point.
If you are not quick in changing the stop loss

also it will not dampen your trade
performance.
In this case if my sell stop loss triggered at

3235.7 I will accept close near to 18.9 point
loss and be a buyer at this point keeping the
stop at 3235.7 and aim for the last target 3281
with some logical trailing stop loss.
103
Day trading using Gann Angle dynamic

approach: If we will make use of the
volatility along with the gann angle then
this concept will become dynamic and it
will produce great result. All the above
process that I have explained in the earlier
section will remain same only additional
parameter daily volatility will be used with
the gann angle. In this method, we will
calculate the daily volatility based on the
past 10 days’ last trade price of any
instrument.
1. Daily volatility calculation:
a. Take past 10 days’ last trade price of any
stock or index.
b.Calculate the absolute return by using
the natural logarithm function LN(). You
will get 9 data points.
Formula: Absolute return
= LN (Current price/ Previous price)
c.Calculate the square absolute return for
all 9 data points.
104
d.Calculate the average of absolute return and

square absolute return.
e. Calculate variance.
Formula:
Variance = square absolute return – (absolute
return)2
f. Calculate daily volatility percentage.
Formula: Daily Volatility percentage =
square root of (variance) X 100.
From the daily volatility percentage, we

understood in the coming day the stock or
index whose daily volatility percentage was
calculated as per the above process would
fluctuate to the extent of daily volatility
percentage.
I have taken the state bank of India 12 October

to 25 October 2011 to predict the intraday
level for next trading session using the gann
angle and the volatility.
105
I have calculated the daily volatility as

explained above for sbi.
Date LTP-SBI Absolute return Square absolute return
12-Oct-11 1880 0 0
13-Oct-11 1875.35 -0.002476468 6.13E-06
14-Oct-11 1883 0.004070941 1.66E-05
17-Oct-11 1885.5 0.001326788 1.76E-06
18-Oct-11 1885 -0.000265217 7.03E-08
19-Oct-11 1909.25 0.012782674 0.000163397
20-Oct-11 1933.9 0.012828195 0.000164563
21-Oct-11 1949 0.007777731 6.05E-05
24-Oct-11 1911 -0.019689755 0.000387686
25-Oct-11 1842.25 -0.036639015 0.001342417
Average -0.002253792 0.000238121
Variance 0.000233042
Daily Volatility % 1.526570684
Above calculation says the daily volatility

is 1.5266%. Hence, the stock has the
probability to fluctuate by 1.5266% in the
coming day. Based on the above conclusion
I will see a price fluctuation of 28.1233 (i.e.
1842.25 x 1.5266/100) rupee in the sbi
counter in future trading session.Hence my
expected high is 1842.25+28.1233
=1870.3732
106
my expected low is 1842.25-

28.1233=1814.1268.Now in order to get the
buy sell level in the gap up opening with
uptrend I will use the 1842.25 as low and
1870.3732 as high in the gann angle tool and
follow all its rules to derive the targets.
Using the above price points I observe that
the trading rule–d is being violated, hence I
have done the changes in the data point to
1856.32 (i.e. midpoint of the above data
points) and derive the following levels for the
future trading session.
In the future trading session which follows

the 25th october 2011 any gap up opening
above 1849.14 and below 1863.50, if the price
cross over 1863.50 then I will buy sbi for
optimum target of 1898 and any gap up
opening and price below 1849 I will sell for
target 1815.25. Refer the table in next page to
view the calculations.
107
Low High
1856.32 1856.32
Degree Degree Factor Resistance Degree Factor support
16X1 86.25 0.479166667 1897.839 1X16 86.25 0.479166667 1815.2598
8X1 82.5 0.458333333 1896.025 1X8 82.5 0.458333333 1817.0355
4X1 75 0.416666667 1892.398 1X4 75 0.416666667 1820.5894
3X1 71.25 0.395833333 1890.586 1X3 71.25 0.395833333 1822.3677
2X1 63.75 0.354166667 1886.964 1X2 63.75 0.354166667 1825.9269
1X1 45 0.25 1877.925 1X1 45 0.25 1834.84
1X2 26.25 0.145833333 1868.908 2X1 26.25 0.145833333 1843.7748
1X3 18.75 0.104166667 1865.307 3X1 18.75 0.104166667 1847.3548
1X4 15 0.083333333 1863.508 4X1 15 0.083333333 1849.1461
1X8 7.5 0.041666667 1859.912 8X1 7.5 0.041666667 1852.7313
1X16 3.75 0.020833333 1858.116 16X1 3.75 0.020833333 1854.5252
Similarly, to get the buy sell levels in the

gap down opening and downtrend I will
use the 1842.25 as high and 1814.1268 as
low in gann angle tool and derive the
targets.
Using the above price points I observe that

the trading rule–d is being violated, hence
I have done the changes in the data point
to 1828.19 (i.e. midpoint of the above data
points) and derive the following levels for
the future trading session.
108
Low High
1828.19 1828.19
16X1 86.25 0.479166667 1869.3954 1X16 86.25 0.479166667 1787.4438
8X1 82.5 0.458333333 1867.5943 1X8 82.5 0.458333333 1789.2058
4X1 75 0.416666667 1863.9947 1X4 75 0.416666667 1792.7325
3X1 71.25 0.395833333 1862.1962 1X3 71.25 0.395833333 1794.4971
2X1 63.75 0.354166667 1858.6019 1X2 63.75 0.354166667 1798.029
1X1 45 0.25 1849.6312 1X1 45 0.25 1806.8738
1X2 26.25 0.145833333 1840.6822 2X1 26.25 0.145833333 1815.7404
1X3 18.75 0.104166667 1837.1086 3X1 18.75 0.104166667 1819.2931
1X4 15 0.083333333 1835.3232 4X1 15 0.083333333 1821.0707
1X8 7.5 0.041666667 1831.7548 8X1 7.5 0.041666667 1824.6286
1X16 3.75 0.020833333 1829.972 16X1 3.75 0.020833333 1826.4089
In the future trading session which follows

the 25th october 2011 any gap down opening
above 1821.07 and below 1835.32, if the price
cross over 1835.32 then I will buy sbi for
optimum target of 1869.39 and any gap down
opening and price below 1821.07 I will sell
for target 1787.44.
109
If the price in future day may have a gap

up opening above 1863.5078 or below
1849.1461 or gap down opening below
1821.0707 or above 1835.3232 then the
above calculation will not solve our
requirement.In this case we need to take
the opening price of that day into account
for calculation of volatility. We will use the
opening price with projected high and
opening price with projected low in gann
angle tool to derive the entry levels.
Say SBI open at 1870 on the future trading

day which follows the 25th october 2011
then in the volatility calculation replace the
1842.25 with 1870 and calculated the new
volatility and expected high and low. The
new data points will be as follows
110
Date LTP-SBI Absolute return Square absolute return

12-Oct-11 1880 0 0
13-Oct-11 1875.35 -0.002476468 6.13E-06
14-Oct-11 1883 0.004070941 1.66E-05
17-Oct-11 1885.5 0.001326788 1.76E-06
18-Oct-11 1885 -0.000265217 7.03E-08
19-Oct-11 1909.25 0.012782674 0.000163397
20-Oct-11 1933.9 0.012828195 0.000164563
21-Oct-11 1949 0.007777731 6.05E-05
24-Oct-11 1911 -0.019689755 0.000387686
25-Oct-11 1870 -0.021688234 0.00047038
Average -0.000592594 0.000141228
Variance 0.000140877
Daily Volatility % 1.186916667
Expected high 1892.195342
Expected low 1847.804658
New trading levels calculation in uptrend is

given in the next page . Since the opening is
gap up, the uptrend calculation will be fol-
lowed for trade decision. In this case, the
downtrend level calculation is not required
111
Low High
1881.1 1881.1
16X1 86.25 0.479166667 1922.8941 1X16 86.25 0.479166667 1839.7651
8X1 82.5 0.458333333 1921.0674 1X8 82.5 0.458333333 1841.5527
4X1 75 0.416666667 1917.4167 1X4 75 0.416666667 1845.1306
3X1 71.25 0.395833333 1915.5926 1X3 71.25 0.395833333 1846.9208
2X1 63.75 0.354166667 1911.947 1X2 63.75 0.354166667 1850.5038
1X1 45 0.25 1902.8483 1X1 45 0.25 1859.4767
1X2 26.25 0.145833333 1893.7713 2X1 26.25 0.145833333 1868.4712
1X3 18.75 0.104166667 1890.1466 3X1 18.75 0.104166667 1872.0751
1X4 15 0.083333333 1888.3356 4X1 15 0.083333333 1873.8783
1X8 7.5 0.041666667 1884.716 8X1 7.5 0.041666667 1877.4874
1X16 3.75 0.020833333 1882.9076 16X1 3.75 0.020833333 1879.2933
Trend termination point: Gann angle also

helps us in identifying the trend and the
trend termination. 1 X 4 or the 4 X 1 angle
price point cross over is known as the
preliminary trend confirmation points for
uptrend or downtrend. However, the 1 X 1
angle price resistance crossover signals the
strong up trend break out and the 1 X 1 angle
price support break considered as strong
down trend break out. In gann angle concept
we assume all the trend action will terminate
at 1 X 16 or 16 X 1 angle price point.
112
Dynamic gann square of nine principles:

Using the volatility we can make any gann
method dynamic. In gann square of nine prin-
ciple, we need to derive the uptrend price
points in the wheel by adding the step to the
lowest number and each higher number in
the wheel will be its preceding number added
with the step. Similarly the downtrend price
points will be calculated by subtracting the
step from the highest number. Step is noth-
ing but the high to low price difference di-
vided by 81 for square of nine wheel. While
using the gann square of nine for deriving
the short-term investment decision I found
the principle yields good result. However
when applying the same concept in the
intraday trade I did not get the desired result
which I was expecting from the method. This
is the reason why I have thought of to intro-
duce the volatility in this method.
113
Now the key question is how the volatility

will find a place in this method. As I have
explained before the daily volatility,
percentage is the expected price fluctuation.
Hence, now we will take the expected price
fluctuation to derive the steps. Consider the
same example of SBI given in page 105.
The daily volatility percentage is 1.5266,
expected price range is Rs 28.12, and the
last trade price is 1842.25.
Step will be 28.12/81=0.347160
Seed number will be 1842.25+0.347160 this

will be the 1st number in the square of nine
wheel. Second number will be 1st number
added with 0.347160. Likewise the 81st
number will be 80th number added with the
0.347160 and this must be equal to
1842.25+28.12=1870.3732
114
Dynamic gann square of twelve principles:

The way i have done the square of nine
dynamic in the same way I will make the
square of 12 dynamic. I will use the daily
volatility percentage to find the price range
for the day followed with I will calculate the
steps by dividing the price range with 144.
The seed number in the uptrend will be the
last trade price added with the step and the
144th number will be 143rd number added
with the step. However do remember the
square of 12 wheel is a different from the
square of nine wheel in many aspects the
arrangement of numbers are also different.
The downtrend price points will be calculated
by the way of subtracting the step from the
last trade price.
While using Dynamic Square of nine or

dynamic square of twelve wheels keep a
close eye on the annual volatility percentage.
Annual volatility is nothing but the daily
115
volatility multiplied with square root of

365. If the annual volatility is above 40%
use the square of twelve wheel else use the
dynamic square of 9 for making the
intraday trade decision.
116
Gann’s Method Gann Tools & Techniques
Chapter- 7
Gann Tools & Techniques

7.1 Introduction
7.2 Gann line
7.3 Gann fan line
7.4 Gann’s technique in a scratch
117
118
Chapter- 7
Gann Tools & Technique
7.1 Introduction:
In this chapter we will discuss few Gann

tools and its use. Also we will discuss
some of his rules for estimating the
support and resistances with example.
We will relate his idea with real life
example.
Many s/w programmes support many

different tools on Gann. The commonly
available ones are Gann fan line, Gann
line.
119
7.2 Gann line:
“Gann line is a trend line drawn from

any extreme price point having 450
slope, with the y axis (time axis)”. It
is a very simple tool based on the
Gann’s theory. 45 degree is 1/8 of a
circle, the sum of all the numbers in
our decimal number systems of 0, 1,
2, 3, 4, 5, 6, 7, 8, and 9 is 45. Since
450 slope play an important role to
identify the price movement but as per
your requirement you can change the
degrees to 60, 75 or even to 22.5
degrees.
Below mentioned is a chart of SBI. I

have drawn a Gann line on the 3 April
07 low 915. That is represented at
point A.
120
121
All the points in the Gann line present the

resistance points that are represented as
point B and C. If you are using the intraday
chart place your Gann line in the swing low
or swing high point of the 5 minutes chart.
2 minutes chart is also a better option.
How to take a trade decision using this tool?
Gann has specified that in a normal market

45 degree plays an important point of
resistance. He says that buying is always
advisable after the 45 degree angle line
resistance cross over and selling below the
45 degree line. During his time
sophisticated computer program was not
available to use this but now all most all
the s/w support this tool.
What you need to do is just select the tool
and place in any of the swing high or low
point. In a less volatile market change the
122
angle to 22-1/2 degree instead of 45 degree.

Now take your vertical pointer to any future
time.It will display the future resistance point
for you. Buy if the price crosses this
resistance. Sell if it maintains below this
resistance level.
Better practice will be placing three Gann

lines having angles 450 as centre line, 600 as
upper line and 22-1/2 degree as lower line .
Initiate a trade on 450 prices cross over for
target 600 and stop loss will be at 22-1/2
degree point. This technique works well in
intraday chart also.
In the below mentioned picture A represents

60 degree line , B represents 45 degree line
and C represents 22-1/2 degree line.
One thing you need to remember is as per

the gann’s principle the shorter time period
for which the swing will be valid is 3 days
123
for daily price chart, 3 weeks for weekly

chart, and 3 months for monthly chart.
While using this technique, I found in a

daily chart that if I am using it for weekly
swing low or high point then for the future
week it is very much valid but not for the
longer time duration. The reason is in the
future week it will make new swing high
and low. If you happen to be a user of
‘Elliot’s wave’ then apply it in wave TWO
swing low. It will be valid till wave FIVE
swing high. You will find more about
Elliot’s wave on my book on technical
analysis volume 1.
124
125
7.3 Gann fan line:
“Gann fan are the 9 trend lines converging

from one swing point either high or low”.
These nine lines are 1X8, 1X4, 1X3, 1X2,
1X1, 2X1, 3X1, 4X1, 8X1 of gann angle. I
have already explained about Gann angle
in chapter-1.
126
Above picture represents the Gann fan line.

Each angle is given in retracement term. For
using this tool you need to place it in any
extreme swing points. Then place the vertical
price ruler in any future date or time. It will
display 9 resistance and support points. 1X1
is represented as 45 degree. Buying is
advisable if price moves above the 1X1 trend
line for target 1X2 and its higher order. Stop
loss will be 2X1 or its lower order.
Caution: - Don’t use this tool for longer time

period swing low or high. If the price expands
to a wide range for longer period it may yield
wrong result. In daily chart up to 2 months
data, it will produce accurate result. Use this
tool in 5 minute and 2 minute data for
intraday. It produces wonderful result.
127
7.4 Gann’s technique in a scratch:
1. W.D. Gann devises the market into 4

Parts. They are Bull Market, Bear market,
Bull market reversal, Bear market
reversal.
2. At least three consecutive period of rise

or fall should be taken for trend
confirmation whether it is a bull, bear or
reversal.
3. Gann has specified not to trade in the

3rd time period of the trend since bigger
swing in price is expected in that time
period.
4. Square of numbers and 50% of the

difference between those squares are
significant supports and resistances, but
cannot be traded by themselves.
128
5. There are 6 mathematical proofs for a

support and resistance.
a. Angles from top and bottoms: If the

previous swing high / low price and the
current high and low placed in the same
angle then the current price act as a
resistance or support . Based on this rule
gann line is defined.
b. Angles running horizontally i.e. the

previous tops and bottoms:
These are the price points where the
previous swing high or low price touched
in any future time.
c. Time cycles (vertical angles) : If there

are three or four days of sideways
movement after a high day and this is
followed by a down day with high
129
volume where low is lower than the low of

the sideways movement then the low of
the sideway movement act as a point of
resistance.
d. Crossing of important angles originating
at zero. These are the 0,360,720 etc
considering the 1 at the centre of the gann
wheel. For any price its 360,720, offset
angles as discussed in earlier chapter are
considered as the major supports and
resistances.
e. Crossing or coming together of angles
from double or triple tops or bottoms.
Any price squares with the price of double
top high, triple top high, double bottom low
and triple bottom low are potential
resistances and supports.
f. Squaring of time and price. Under this
more than 5 techniques we have discussed
in the earlier chapters.Readers can refer the
respective chapter.
130
Gann’s Method 34 intraday trading techniques
Chapter 8
Intraday Trading techniques
131
132
Intraday Trading techniques
1. Intraday Beta Decoupling strategy
Introduction: This is the method to which I trust
a lot. I do not say this is a full proof method.
However the accuracy or probability of success of
this method is 60 to 70 %. This is my self-innovated
trading technique. No one ever before has presented
this technique. If you are one of the readers of this
book then you can assume that only through you
like people this technique will spread to others.
‘Beta’ of a security is known as the sensitivity of

the security towards the index movement. For
example - a security is having beta as 1 means
each one rupee change in index will impact Rs 1
/- in the security. When I looked into the formula
of beta I found that it has used two functions from
statistics named as covariance and variance. I have
expanded my thought to establish the beta relation
between two different scripts, between two
different indices, between more than two securities
from one index and so on. Why it is a valid
133
mathematical technique? My first argument is that
I have not changed the very definition of beta.
Secondly as a student of mathematics I knew in

statistics all the methods which never corrupt the
original data is considered as a valid technique.
In this chapter I am going to demonstrate that how

mathematically you will compute the beta and how
to take the trade decision when beta starts
decoupling. What is decoupling? In my words it is
the simple deviation from the historic occurrence.
For example: If I will say “in Chennai city every
year in the month of August 15 days used to be
rainy days”. In any particular year if the above
statement is proved wrong then you can say it is
decoupled.
In the context of capital market the decoupling

phenomenon is quite similar to the above example.
However decoupling is also a true phenomenon in
capital market. Example : If I will say that the ICICI
bank and HDFC bank pair beta is 1.25 that
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means each Rs1.25 change in ICICI bank will bring
Rs1/- change in HDFC bank.This is not true always.
Some times it will deviate or decouple and hold for
the future days also. While implementing this
concept into action I will follow a different
approach.
In the subsequent section I will demonstrate

examples to explain this concept.
Beta Interpretation: The mathematical definition

of beta is “Beta is defined as the change in the
portfolio value with respect to the index value”. You
can interpret it in many different ways.
a. The sensitivity of the securities in your portfolio

with respect to the index movement.
b. High beta securities yield more as compared to
the low beta securities available in the same index
segment.
But I will think in a different way to interpret it.
1. I need to devise a system of trading which will
be applicable for intraday
135
2. To start with I will take two variables a. One
stock available in index b. Index.
3. I will not construct a portfolio. I will take the
closing price of the stock and the index of each
variable and the stock as dependent variable.
4. Assume this sensitivity will hold good for the
current day and we will initiate a combination
of long and short position.
In this case the key area which I am monitoring for

my trade is the “sensitivity”. The change in
sensitivity or beta decoupling will provide me an
opportunity to initiate a trade and I will exit from
the trade once this decoupling phenomenon will
perish. Some time beta for the day used to expand
or decoupling phenomenon never ends.This is the
day when I need to book the loss. But one
interesting fact what I have observed is out of each
10 experiments which I have conducted so far I
got almost 75% of the out come are success . The
remaining 25% are the failure and not more than
2% of the out come has triggered the maximum
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projected losses. In many critical days like sudden

‘U’ turn days this method has proved its sincerity.
The major advantage of this method of trading is
the most ambiguous and hypothetical term ‘stoploss’
that you need not have to fix here for your trade.
Few words of caution you need to follow

1. The chosen stocks must not be news driven.
2. You can initiate the trade in any market
condition. However try to eliminate the stocks
whose earnings, management interview or any
sensitive information which is going to drive
the price of the stock for the day.
Mathematical formula and calculation

procedure of Beta :
Beta is being calculated using two statistical
formulas called covariance and variance
Covariance ( independent variable,dependent varible) N
Beta = X
Variance ( Independent varible) N-1
Independent variable, Dependent variable = These

are the two securities or two indeces or one index
137
and one security which we have taken for
observation.
N= The number of days you will take the
observation. The ideal case will be 10 days.How
ever you can take 5 days.
Though you can be able to calculate the covariance
and variance using pen and pencil but I will suggest
you to use the Microsoft excel for this calculation.
Covariance and variance function is readily
available in Microsoft excel.
Example 1: Below I have given the 5 days beta

calculation of HDFC bank future and Bank Nifty
future from the period 27th June to 3rd July.
HDFC bank bank nifty % change HDFC bank % change HDFC bank
27-Jun-08 998.45 5129.75 0 0
30-Jun-08 982.25 4929.85 -1.622514898 -3.896876066
01-Jul-08 946.3 4670.05 -3.659964368 -5.269937219
02-Jul-08 1022.7 4987 8.073549614 6.786865237
03-Jul-08 971.5 4809.95 -5.006355725 -3.5502306
covariance 23.72351823
variance 30.94393457
cov/var 0.766661336
N/N-1 1.25
Beta 0.95832667
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Interpretation of Beta: As I have defined above
beta is the sensitivity of two different prices. In the
above example my beta is 0.96. In that the
independent variable is Bank Nifty and the
dependent variable is HDFC bank. The covariance
property says Covariance(X,Y)=Covariance(Y,X).
However the variance will change if you will alter
the independent variable so as the beta. If you have
already worked in beta then you will find some
changes in my calculation.
My 1st change is that I have not taken the portfolio

value rather taken the unit value because my
objective is to find the fluctuation or sensitivity
sitting in each rupee.
Now I am going to make my second change. Based

on the definition of beta if Bank Nifty will change
by 1 % then HDFC bank will change by 0.96 %.
Trade Decision: On 4th July 08 around 10:50 a.m.

I have noticed HDFC bank was trading at 995 and
Bank Nifty trading at 4890 which was 2.47 and 1.66
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percent higher from its previous close.
Based on the above beta factor if Bank Nifty

changes by 2.47 then HDFC bank should change
by 2.47X0.96=2.37. Hence this is a place where
the beta is got decoupled. Now I got the signal
that at this time the probability of Bank Nifty to
come down is high and probability of HDFC bank
to go up also is high. Provided no external factor
influence both the prices.
Now I will do the weight addition that is nothing
but the net value at which I will enter a trade.
Therefore it is clear from the above argument that I
will buy HDFC bank and Sell Bank Nifty. But what
will be the value of my trade? Since I have taken
the future prices for my observation hence it is better
if I will start my calculation from future lot size.
One lot size of HDFC bank is 200 and one lot of
Bank Nifty is 25. Based on the above price one lot
of HDFC bank values Rs1, 99,000/- and one lot of
Bank Nifty value is Rs1, 22,250/- .
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If I will sell one lot of bank nifty and buy one lot of
HDFC bank then the un-hedged portion of the
capital will be 199000-122250=Rs76750/- . If I will
sell two lots of Bank Nifty and buy one lot of HDFC
bank then my un-hedged portion of the capital will
be 122250X2-199000=Rs45500/-.Hence my
capital risk is reducing by 25%.
The final decision at which I have arrived is that I

will sell two lots of Bank Nifty and buy one lot of
HDFC bank at the above price.
Profit and Loss Projection: To derive the profit

and loss projection I will once again go to my school
mathematics where my teacher has taught me the
problem of the ratio and proportion.
Maximum Profit Calculation:
The difference of trade value between the two
contracts (TC) = Rs45500/-
Beta mismatched percentage is (BC) = 2.47X0.96-
1.66=0.71
Beta Decouple Factor (BDF)= Beta –BC= 0.96-
0.71=0.25
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Trade value of dependent variable

Hedge Ratio =
Trade value of independent variable
= 0.886
Non Hedged Factor (NHF) = 1-0.886 =0.114
Hedge ratio signifies that only 0.886% value of
dependent variable is hedged.
The percentage of value which is not hedged is
0.114%.
If hedge ratio is more than one then also subtract

it from one to find out the excess hedge factor.
Maximum Profit = TC X BDF – TC X NHF
= TC (BDF-NHF)
=Rs 45500/-X(0.25- 0.114)= Rs 6188/-

This says if the beta holds good as it was in the
previous day then I will earn maximum profit of
Rs 6188/- . However if the beta starts decoupling
in the opposite direction then my profitability will
increase and it may be more than the projected
one.
142
Maximum Loss: Consider that the beta
decoupling phenomenon will exist for the
remaining parts of the day at the same extent.
Hence the maximum loss will be projected from
the un-hedged component. However the loss may
expand if the beta decoupled more than 0.25% .
This is equal to Rs 45500/-X0.114=Rs5187/-.
What happened on that day? By 1 p.m. the Bank

Nifty fell to 4775 and also the HDFC bank fell to
981. This action partially bridge the decoupling
phenomenon and result.
(4890-4775)X50=Rs 5750/- profit
(995-981)X200=-Rs 2800/- loss
Net = Rs 2950/- profit.
Conclusion: In this technique the trader is not using

the stoploss mechanism rather using the hedging
mechanism. Hence it is always advisable to book
the profit as and when it gets realised. We will
discuss more phenomenon actions and interesting
nature of this strategy in the following section.
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2. Intraday Index Decoupling Strategy
As I have explained above that the decoupling is a

phenomenon where the price of two different
indeces or different stocks move in the opposite
direction. Index decoupling is a frequent
phenomenon as observed in the capital market. In
many days you will observe that the two different
indeces will behave none sequentially. For
example somedays you will observe nifty 50 index
will be 3 % up however Nifty IT index will be 2%
down on the same day and same time. This may be
due to different internal or external factors.
a. Macro or Micro economic risks: Under this

monetary policy, inflation, interest rate,
agriculture production, government
policies are included.
b. Global risks: Crude prices, precious metal

prices, other countries’ industrial &
monetary policies etc.
144
Gann’s Method 34intraday trading techniques
Based on these two risks the index decoupling
trading method is developed.
Below mentioned are the procedures I will follow.
1. I will identify two different indeces which

decouple in a day.
2. I will identify four different most active stocks
in these two indeces.
3. I will identify whether the price actions in these
four stocks are trending or trading.
4. I will use any one technical tool to identify the
potential resistance and support points of these
four stocks.
5. If the price actions are trending then the
probability of higher volatility is eminent and in
this junction I will form 30 % to 50% hedge.
6. If the price actions are in a trading band then it
indicates less volatility. In this case I will form
50% hedge or less.
In this method hedge corresponds to reduce capital

risk. For example in a 75% hedge If I will buy
145
Rs 100/- worth of share in cash market then I must
sell Rs75/- worth share in the same market segment
or vice versa.
What is the logic behind this principle? In most of

the trading days I have experienced that if the price
action is trending then traders choice used to give
the success or else it gives failure. In the trading or
the ranging market trader does the mistake.
Example: Refer the IT index and the Nifty index

price chart on 14th August 2008 as given below.
You will find in many occasions during the day
when the nifty was drifting down and IT index was
going up.
146
147
How to interprete the decoupling phenomenon?
This decoupling is due to the base currency rupee

depreciation for IT index and Inflation fear for other
domestic sector. You can say this pricing action is
due to the combination of local and global factors.
However these factors will not dominate my
analysis as I will proceed further. And as per my
initial observation of first one hour of trade I found
that both the indices are of trending nature.
I made a random choice of Satayam computer and
Infosys in IT index and SBI & DLF in the Nifty
segment. You can say these four stocks are the key
movers and draggers of both the indices. You can
take any stock of your choice but keep in mind
that stocks of your choice must have some
dominance on the index on that particular time. I
will enter the trade in the dominance period and
exit the trades once I will observe the decoupling
is vanishing. I will use my Gann calculator for
estimating the support and resistances of these
stocks. Below are the intraday price charts of these
four stocks I have given for reference .
148
Infosys
149
Satyam Computer
150
SBI
151
DLF
152
All these four counters what I have chosen for the
observation also exiting the trending nature as
exhibited by its pear index and also has the
dominance in the index on that particular day.
Based on the 10 a.m. to 11 a.m. high and low of

these four stocks I have identified the support and
resistances of these four stocks using the Gann’s
price to price squaring calculator. You can use any
technical tools to identify the current support and
resistance. You may use the MACD and Bollinger
band also for identifying the current support and
resistance.
Price Observation Table
10 a.m. to 11 a
High Low Res1 Res2 Res3 supp1 supp2 supp3 11:30 a.m. price
DLF 529 512 523 535 558 517 506 484 513.6
SBI 1524 1487 1506 1526 1565 1504 1485 1446 1487
INFOSYS 1667 1644 1664 1685 1726 1645 1626 1586 1666
SATYAM 414 407 417 427 448 404 394 374 414
153
From this observation and the current price I come

to the conclusion that I will form the 30% to 50%
hedge on these four counters. Based on the current
price I will decide the long and short positions.
In my 1st pair of SBI-DLF I found SBI seems to be

weaker as compared to the DLF because SBI is
trading just above the support 2 whereas DLF just
below the support 1. Hence I have decided to sell
SBI one share and buy DLF one share at 11:30
a.m price. In price term also this long and short
trade is 34% hedged (i.e. 513.6/1487
X100=34.50%). Now come to the second pair
Infosys-Satyam computer, where Infosys is just
above its resistance level 1 and satyam computer
is just below its resistance level 1. This seems
Infosys looks stronger than the Satyam computer
at this moment. I will decide to buy Infosys 1 share
and sell Satyam Computer 1 share at 11:30 a.m.
price. Below mentioned are the trades I have
initiated based on the index decoupling method.
154
Trade table
Buy Quantity Sell Quantity Net
DLF 513.6 1 X X 514
SBI X X 1487 1 -1487
INFOSYS 1666 1 X X 1666
SATYAM X X 414 1 -414
279
Around 12:30 p.m I found that both the index are

moving in the same direction and the decoupling
phenomenon is ending. At that time prices of DLF,
SBI, INFOSYS and Satyam computer was trading
at 511, 1487, 1673 and 413 and my net trade
position was in Rs 5/- profit. Take an instance at
1:30 p.m when the prices of DLF, SBI, INFOSYS
and Satyam computer was trading at
514,1479,1693 and 416 and my net trade position
was sitting at a profit of Rs32.35.
The closing prices DLF, SBI, INFOSYS at and

Satyam computer at 3:30 p.m. are
500,1455,1694,413 respectively . At this moment
my net profit is Rs 46.70.
155
Conclusion:
One interesting thing in this index decoupling

method is that the maximum capital risk in this
trade used to be very less because of the proper
balance of the long and short position. The second
assumption I made is during the day this
decoupling will never end at least for few hours
from initiation of the trade. No need to initiate the
trades in hurry. Do the proper calculation and then
initiate the trade. This strategy will initiate loss if
the decoupling phenomenon of both indices will
re-couple.
3. Intraday sector decoupling strategy
This is one of the best intraday techniques I have

ever seen. It is commonly observed that all sectoral
indices never move concurrently with the main
index. In this technique you need to identify two
different sectors which are moving in opposite
direction in a particular day. You need to identify
two stocks from each sector which are different in
156
terms of their % price change. Initiate the buy and

sell trade in such a way that the net trade value
must be neutral.
4. Intraday stock decoupling strategy
It is a common observation that the liquid scripts

or the momentum scripts act or react sharply with
respect to the market moment. In this method we
need to identify the two momentum scripts that are
having the same directional movement in terms of
%. In this method volume plays an important role.
You need to look into the trader volumes of both
the scripts. The higher volume script you need to
make 2 times of weight addition as compared to
the 1 time weight addition in the lower volume
script. But keep in mind at any point of time your
capital surplus must not exceed the 40% of your
tradable capital.
157
5. Price Squaring Technique
Gann has specified that the price movement of a

stock is harmonic in nature and follows the
geometric laws. Second most important thing as
he has mentioned is that once the price trend
completes one geometric formation it is called
squaring. After this squaring action the new trade
determines the new geometric formation. This price
time action can take a shape of any geometrical
figure available in the universe.
Gann has also explained in his square of nine charts

; how the natural numbers associated with each
other through some angle relation. This thing I have
explained in the 1st chapter of this book on “Gann’s
method”.
Swing high is the highest price from where the

price will retrace back with higher volume. Swing
low is the lowest price from where the price will
retrace back with higher volume.
158
In this intraday trading method I will be using the
primary method of Gann square. Take the mid point
of the swing high and swing low and calculat the
15 degree up from or down to the price range.
The 45, 90 degree price line will act as the major
support and resistance for the move. Hence it can
be treated as the trend turning points or the trailing
stop loss point.
In this method the 360 degree price projection will

be treated as the final point for the squaring.
This technique is being used in our online intraday

calculator available in www.smartfinancein.com.
How to make best use of the calculator I am
explaining below.
159
Gann Calculator Explained
Introduction: Gann calculator in the initial days

of its introduction got very good response from the
traders and investors. Many experienced the benefit
of this calculator and shared their experience and
difficulties. I am going to describe all these aspects
in this section. It is an authentic tool and its
construction-base-formulas you can get from this
book. As I have said to all my readers and
seminarians earlier that it is not a secrete tool. It is
the simple mathematical formula as given by
W.D.Gann and I have just simplified and used it for
developing this application. I feel it is the need of
the time for me to explain how to use this calculator
with some examples.
Swing Trading: Swing Trading is the base and the

mother of this calculator. In my words the defini-
tion of Swing Trading is “trade in the direction of
the price movement”.
Price movement of a stock as explained by Gann

160
and Elliot follows the harmonic motion. One step
forward I will say that it follows the random
Brownian motion. Who determines this motion?
The traders or the investors determine. The behav-
iour of a trader or investor is again driven by the
fear and confidence. I will not use the word greed
in this context. As a swing trader you need to find
out the price points which generate fear or confi-
dence. These are the points I can name as swing
turning points or resistance and support points.
Though this is a complex job but now a days it is
getting simplified by the use of s/w tools. Gann’s
calculator does the job of calculating these swing
turning points which I have named as the resistances,
supports, buy entry, sell entry points.
Gann calculator: The swing 2 support and

resistance point which I belief as the decisive
point for a buy or sell entry, is being named as
buy entry and sell entry in the calculator
respectively. In gann’s calculator I have used the
square root formula and degree to factor the formula
for calculating the different supports and resistances.
161
I have taken 180 degree factor as 1 and based on
this in every 15 degree and its multiple I have
calculated the resistance and supports.You must ask
me why 15 degree and its multiples? Considering
one full day as 24 hours and one cycle as 360 degree
I found each one hour in a day is 15 degree. My
second argument is - elementary mathematics says
that 1 degree as 4 minutes hence one hour is 15
degree .
You must ask me why should I belief on the last

hour’s swing high and low for forecasting the future
price? In many statistical tools like MACD,
Bollinger band or finding the chart patterns you are
using much older data points. Even in intraday chart
if you are using these tools then without your
knowledge you are using many past data points.
Hence it is nothing wrong in using only two dynamic
swings high and low data points in this calculator.
How to use it? Take past one hour’s swing high

and low as input it will calculate the resistances,
support and key resistance and key support levels.
162
The buy entry and sell entry prices calculated by
the Gann Calculator are nothing but the
Swing 2 resistance and support points. In less vola-

tile day you may encounter the congestion. Con-
gestion is nothing but the buy entry and sells en-
try prices will be placed very near to each other
say with Rs 2/- to Rs 3/- difference. Same also
you can encounter in the resistances and supports.
In this case change your swing high and low points
to a wider one or make the buy entry or sell entry
above or below the 1st target point or trade between
the band means between any two resistances, sup-
ports, and stoploss points. Make a practice to
change the swing high and low points time and
again in every one hour. If your position runs in
profit then use the trailing stoploss technique to
maximise profit.
This calculator is working and I have hundreds and

thousands of proof for that. If you feel that why I
am sharing this wonderful tool with you then I have
the simple answer that knowledge is God gifted and
I want to share with you. It is upto you to accept it
163
or not. Critics will never stop me sharing the
knowledge with any one. I will advise if any one is
getting pained by my act of sharing then better
stop thinking about this calculator.
My way to identify the swing high and low:
You can follow any one way for identifying the

swing high and low.
1. High and low price in a particular time frame.
The minimum time you must take for the
observation is one hour.
2. Take the previous days last hour high and low
for next days 1st hour trade provided global
sentiments must be neutral during the non
trading hours of our market.
3. If the current price action of the script is
trending then take the low or high follows the
trend high or low.
4. If you encounter congestion then take the high
and low in greater time interval.
Now see some examples which I feel will thrill you.

I will also explain how you will enter a trade.
164
Example 1: Consider the Nifty spot one hour
data from 10 to 11 a.m on 12th August 2008. Its
high was 4634 and low was 4598.
Using this data in the intraday calculator I found

that my key supports are 4600-4566-4498 and
resistances are 4631-4666-4735. You can use this
data in the calculator and test its accuracy.
At 11:05 a.m. it has fallen and found support at 4565,
11:30 a.m. it touched high 4599 and fallen. Hence
it is confirmed in the next half an hour nifty was
very much within the band of my calculated support
1 and support 2.
From trading point of view if I miss the chance to

enter the short trade at 4611 then better in this
junction I will wait or change my data points.
Second observation is the bounce from the low 4565
failed to cross the 1st support 4600. So now the
support turns into resistance as per basic technical
analysis concept for next half an hour. In this
junction also I can go short with my initial stoploss
as 4611 and second stoploss as 4631 and target as
165
4565. See in the next half an hour nifty created new

low of 4557 at 11:52 a.m
In this example I have used the past one hour high
and low points for my observation and calculated
all the resistance and support values for the next
hour. It is not guaranteed that I will achieve my
target or stop loss in the next one hour. It is just a
mathematical assumption based on my observation.
I will suggest all of you to treat this calculator as an
alternative software tool as you treat all other
indicators and tools.
Example 2: Consider Reliance industry high and

low in a time period from 10 a.m. to 12 p.m. On
13th August 2008. It was a trending day for
Reliance because it was creating higher high and
higher low. My Swing high and Swing low for
this two hour period is 2353 and 2315
respectively.
166
Using these two values on the Gann calculator I got

the following values:
Long entry price was: 2331 target 2339-2347-2363-

2412
Short entry price was: 2337 target 2329-2320-2304-
2256
Since it was a trending market for RIL and it was

creating the higher high and higher low and the
current price is much above my second target
167
point and trending upward. I will use this swing
action to enter a buy trade keeping my 1st stoploss
as 2339 which is my key resistance, which turn into
the support and my target will be 2363. I will come
out of the trade at 2363 or slightly below that
because this is the 3rd level of target and important
resistance point.
Again I have observed that after touching the high
of 2373.65 the price has started retracing back. Now
I will change my swing low and high. The low as
2339 and high as 2373.65. The stock price 2339 is
the low which the stock has made just before making
this high of 2373.65. You can say this is the high
following the low. Notice it carefully I have not
taken the hourly high or low rather I have taken the
latest low preceding the high.
Why this deviation in principle? If the current price

action is against the previous trending nature of the
price then you need to make this deviation. In the
second case scenario if the price continues its
trending behaviour then also this deviation in
principle will come into focus.
168
Using these two values 2373.65 and 2339 I got
Short entry price was: 2358

Long entry price was: 2355
This is congestion because the difference is only

Rs 3 /- so now I will shift my focus to the 1st level
of target for both the long and short. As per my
calculation 1st long and short targets are 2363 and
2349. These two prices will act as my new long
entry and short entry points. More precisely I will
buy Reliance above 2363 and sell below 2349. My
stoploss for the sell entry will be 2358-2374-2398
and stoploss for buy trade will be 2355-2339-2314
Observe the second part of the calculator which flags

the important support and resistance points. My
entry points also coincide with the 1st level of
resistance and support.
As you can observe from the chart at 12:35 p.m

after drifting to the level of 2362 the stock has a
minor bounce back to 2366 and the greater
downward action started once it has broken the level
169
of 2349. My target level of short entry was 2342-
2326-2277. You can say it as a coincident or a
mathematical wonder.
1. At 1:30 p.m. stock touched 2341 and bounced

back to 2349 level.
2. At 2:20 p.m. stock touched the day’s low of
2326 level.
Though Gann’s other method is to calculate the time

action but it is beyond the scope of this calculator.
Conclusion: This Gann’s calculator is a

mathematical application. It is being developed
using the price to price squaring action of Gann’s
method. It is my advice to all the traders/ investors
to treat this application as an informative and
educational tool.
170
6. Hexagon Price Squaring Technique:
Hexagon price chart is another form of Ganns

square of nine charts. Here we have taken the
geometrical figure as regular hexagon. In regular
hexagon structure all the sides are of equal length.
The total internal angles of the regular hexagon
are 720 degree. Since all the sides and the internal
angels are equal each internal angle will come to
120 degrees.
Now in Gann’s hexagon chart numbers will be

arranged in their incremental order in such a way
that the number of digits in the 1st spiral will be
six, 2nd spiral it is 12 and 3 rd spiral it is 18 and like
ways in the Nth spiral it is NX6 numbers.
The hexagon number arrange also show the

interesting properties. Each higher number in the
main diagonal or the horizontal and vertical
cardinals are associated with each other at an angle
of 1.75 . Considering 180 degree as 1 I have derived
171
that each higher number is associated with each
other at an angle of 315 degree. 315 degree is 7
multiple of 45 degrees and 21 multiple of 15
degrees.
Hence I will conclude that in hexagonal spiral

arrangement the numbers in the main diagonal with
an degree relation of 315 and its multiple will act
as the main resistance and support. At the same time
it will have 21 minor supports and resistances and
7 major supports and resistances .
Example: On 12th November 2008 at 10:50 a.m

nifty swing low was 2863 and high was 2958.
As per the Gann hexagon price chart the squaring
will happen at 3053 in upside and 2770 in down
side. This value I have derived by using the square
root formula and degree factor as 1.75. 3053 and
2770 will fall in the main diagonal of the hexagon.
This will also consider the termination points of
one hexagonal spiral.
The 7 important support and resistances will be

172
Resistance Support
2889.816 2930.869
2916.75701 2903.863
2943.82301 2876.981
2971.01402 2850.225
2998.33002 2823.594
3025.77103 2797.088
3053.33703 2770.706
How to trade using this support and resistance

points?
Quite simple. use the mid point theory to identify

whether the trend is up or down? (2863+2958)/2
= 2910 . I have the resistance placed at 2916 and
uptrend price is placed above 2910 hence I will
buy nifty above 2920 for the initial target of 2931,
2943, 2971. My stop loss for this move will 2904-
2877-2850.
Same way my support is placed at 2903 and down

trend trigger price is at 2910 I will sell nifty below
2900 for target 2890-2877-2850.
At 11:10 a.m I found nifty at 2920 and initiate a
173
buy order. The above swing high and swing low
happened with a time interval of 45 minutes.
Hence nifty is expected to complete the cycle of

achieving the target 2931 or touching the low of
2890 before 11:35 a.m time. This is 45 min from
10:50 a.m.
Refer the price at 10:32 a.m in the nifty future

intraday chart . I touches 2930.56 and from there It
has fallen to 2892 at 11:40 a.m
174
Above price time chart is given for your reference.
175
7. Price and Time Squaring Technique
Like price, time also is an important parameter for

the trade decision. Time is easily converted to the
degree format using the degree and time relation as
explained in the chapter 1. It is a very rare and
interesting phenomenon. If the price in degrees
and time in degrees are equal then we will say it
squares with each other. If such a scenario happens
then we can say the future event is going to happen
as per the time count but not as per the price count.
Now take the same example as nifty where the

swing high is 2958 and low is 2863. This
phenomenon happened with a time interval of 45
minutes. Hence the price changes of 2958-2863=
95 units happen in a time interval of 45 minutes.
This translates to 2/1 angle price time squaring
action. This means each 2 unit of price change
happen in 1 unit change in time. 2/1 angle in degree
terms will be 26.25 degrees. Hence the prices which
will be the resistance for the move will be calculated
from the 26.25 degrees and it’s multiple as given
below.
176
Resistance Support
2878.6239 2942.162
2894.30108 2926.355
2910.01004 2910.602
2925.76152 2894.892
2941.56635 2879.213
2957.40289 2863.588
2973.28194 2848.005
2989.21444 2832.453
I will conclude that from one resistance cross over

to another resistance it will take 8 minutes for me
based on the 2/1 angle assumption.
Take any two arbitrary points say I have chosen

2957 and 2973. At 12:15 p.m. nifty cross the
resistance 2957 and found support at 2959 hence
after 8 minutes from here I must see nifty at level
of 2973 or at 2942 .
See the miraculous power of this method. At 12.23

p.m. nifty was trading at 2973.60
How to initiate a trade?
Same logic of mid point method we have to follow.

177
For my choice of resistance 2957.40289 supports
will be 2942 ( this point is the resistance turn to
support )
Mid points = 2957+2942/2 =2950. The current price

is much above the mid point of 2950 hence I will
go long in nifty with target 2973 and stop loss 2942.
In case it fails to achieve the long target and stop
loss is triggered I will enter a fresh short position
below 2942 with stop loss 2957 and target 2925.
The most important point you must remember is

that the price point of your choice must be a swing
turning point.
178
8. Zero angle trading technique:
This is the simplest intraday trading technique I

can say. In a spiral whether it is a circle or rectangle
or hexagon we need to start at some price and other
prices are in the incremental order of this. If we
place 1 in the square of nine table and other numbers
in the incremental order then all the numbers lying
above the number 1 are called 0 angle number. This
means the old spiral will end there and the new one
will start.
As per gann’s method each price is considered as

the energy point. Being the first person to develop
the swing trading method he has contributed a lot
to zero angle concept.
In this method select any strong point in the price

chart as the zero angle price point and form a spiral
with an incremental order of each 2 rupee change
in one time unit or decrement cycle of 1 rupee in 2
time unit. The prices falling in the zero angle line
will be considered as the swing turning point of the
trade.
179
Take the same example of nifty as given above
swing low as 2863 and swing high as 2958.
If I will arrange the numbers starting from the 2863

incremented by Rs1/- on the Gann’s hexagon chart
then 2863-2870-2883-2902-2927-2958-2995 will
be the resistance for the up move and fall in the
zero angle line. Same way taking 2958 we will get
2951-2938-2919-2894-2863-2826-2783 are the
supports for the down move.
Below is the intraday chart given for your reference.
180
The days low nifty future has hit is 2789 and high
is 2985 which is very close to the resistance and
supports we have calculated.
How to enter a trade? In this I will not follow the

mid point logic. I will enter the short trade if the
2nd support is broken and vice versa. In the above
example I will buy nifty future above 2958 for target
2995 and stop loss 2927. Same way I will sell nifty
at 2938 for stop loss 2951 for target 2919
9. Green angle trading technique:
As per Gann method the 2/1 angle is called green

angle and the 1/2 angle is called the red angle. The
degree notation is 2/1 angle is 26.25 degrees and
1/2 angle is 63.75 degrees. The sum total of 2/1
and 1/2 is 90 degrees.
In this green angle terminology from any swing
point you can derive the resistance and support. If
the price trade above the swing turning point then
buy it or else sell.Consider nifty price at 1 p.m. , the
swing turning point is 2937. The green angel price
181
is derived as (Square root (2937) + 26.25 degree
factor) 2 =2953
The red angle price is derived as (Square root (2937)
- 63.75 degree factor) 2 =2898
Now based on this assumption I will buy Nifty
future at 2953 with stop loss 2937 or sell nifty below
2898 with stop loss 2937.
For the buy trade target will be (Square root (2953)
+ 26.25 degree factor) 2 =2969
For the sell trade target will be (Square root (2898)
– 63.75 degree factor) 2 =2860
In this method the entry point is being determined

from one price point.
At around 1:10 p.m I got he nifty future at 2953

and enter the buy trade at 1:30 p.m I got the target
achieved. As you will observe from the chart at
around 1:32 p.m after touching the high of 2972
nifty started falling .
Timing the trade? In this method you can time

the trade.The price point of my observation 2937
182
is a price point from 12:30 p.m to 1.05 p.m.
where I got maximum volume get transacted.
Hence in 35 minute of time unit I got this swing
point.
Since my entry and exit points are being derived
from the same swing point, I will achieve the target
after 35 minutes starting from 1.05 p.m. which
work out to 1:40 p.m. . Same has happened in the
price chart at around 1:30 p.m this trend started
reversing refer the below chart for details.
183
10. Triangle turning point trading technique:
Triangle is an important geometrical figure. The

sum of the internal angles of a triangle is 180
degree.
The triangle can divide the circle into 3 parts each

of 120 degrees. A hexagon can be split in to six
triangles. In this method we will take all the prices
falling on the sides of the triangle will act as a
resistance and support.
Take the case of a hexagonal spiral on natural
numbers. As given below
184
In this 1&2, 8&10, 21&24,41&44 forms the
triangle in the hexagonal chart.
In the real time price chart you need to identify

one swing turning points and in each 15 degree
offset create the new number in the series and the
1st, 8th, 21st and 41 number generated from the swing
point will form one side of the triangle and second
side will be constructed by the 2nd, 10th ,24th and
44th numbers in the series. Once the triangle is
constructed the trade decision will be made at 2nd
price point for 8th price point as target and so on.
Triangle is being specified as the TRIAN by Gann.
The triangle exists in the entire Gann chart. It is
one of the most important Gann patterns for making
the trade decision.
In order to simplify this method I will establish

angle relation. In hexagon chart prices projected
60 degree from the swing point is a trian point,since
the triangles bisect the internal angles of the
hexagon at 60 degrees. The stock or commodity
price is dynamic in nature hence we never know at
185
one point of time the price will be on the hexagon
chart. However we need to derive the prices which
TRIANS the swing price.
Example: Take the swing high price of nifty as

2973 at 1:30 p.m. on 12 th November 2008.
Assuming this point as the initial point of the
TRIAN we will derive the other TRIAN point
which is 60 degree from the initial swing point.
U p p e r T r ia n g le p o in t s d e r iv e d fr o m 2 9 7 3
2 9 7 3 5 4 .5 2 5 2 2 5 4 .8 5 8 5 2 3 0 0 9 .4 5 7 6 0 3
3 0 0 9 .4 5 8 5 4 .8 5 8 5 2 5 5 .1 9 1 8 2 3 0 4 6 .1 3 7 3 8 4
3 0 4 6 .1 3 7 5 5 .1 9 1 8 2 5 5 .5 2 5 1 2 3 0 8 3 .0 3 9 3 4 2
3 0 8 3 .0 3 9 5 5 .5 2 5 1 2 5 5 .8 5 8 4 2 3 1 2 0 .1 6 3 4 7 8
3 1 2 0 .1 6 3 5 5 .8 5 8 4 2 5 6 .1 9 1 7 2 3 1 5 7 .5 0 9 7 9 2
3 1 5 7 .5 1 5 6 .1 9 1 7 2 5 6 .5 2 5 0 2 3 1 9 5 .0 7 8 2 8 4
3 1 9 5 .0 7 8 5 6 .5 2 5 0 2 5 6 .8 5 8 3 2 3 2 3 2 .8 6 8 9 5 4
3 2 3 2 .8 6 9 5 6 .8 5 8 3 2 5 7 .1 9 1 6 2 3 2 7 0 .8 8 1 8 0 1
3 2 7 0 .8 8 2 5 7 .1 9 1 6 2 5 7 .5 2 4 9 2 3 3 0 9 .1 1 6 8 2 6
3 3 0 9 .1 1 7 5 7 .5 2 4 9 2 5 7 .8 5 8 2 2 3 3 4 7 .5 7 4 0 2 9
3 3 4 7 .5 7 4 5 7 .8 5 8 2 2 5 8 .1 9 1 5 2 3 3 8 6 .2 5 3 4 1
3 3 8 6 .2 5 3 5 8 .1 9 1 5 2 5 8 .5 2 4 8 2 3 4 2 5 .1 5 4 9 6 8
3 4 2 5 .1 5 5 5 8 .5 2 4 8 2 5 8 .8 5 8 1 2 3 4 6 4 .2 7 8 7 0 4
3 4 6 4 .2 7 9 5 8 .8 5 8 1 2 5 9 .1 9 1 4 2 3 5 0 3 .6 2 4 6 1 8
3 5 0 3 .6 2 5 5 9 .1 9 1 4 2 5 9 .5 2 4 7 2 3 5 4 3 .1 9 2 7 1
3 5 4 3 .1 9 3 5 9 .5 2 4 7 2 5 9 .8 5 8 0 2 3 5 8 2 .9 8 2 9 8
3 5 8 2 .9 8 3 5 9 .8 5 8 0 2 6 0 .1 9 1 3 2 3 6 2 2 .9 9 5 4 2 7
3 6 2 2 .9 9 5 6 0 .1 9 1 3 2 6 0 .5 2 4 6 2 3 6 6 3 .2 3 0 0 5 2
3 6 6 3 .2 3 6 0 .5 2 4 6 2 6 0 .8 5 7 9 2 3 7 0 3 .6 8 6 8 5 5
3 7 0 3 .6 8 7 6 0 .8 5 7 9 2 6 1 .1 9 1 2 2 3 7 4 4 .3 6 5 8 3 6
186
L ow e r T r ian g le po in ts d e r i ve d f r o m 2 9 7 3
2 9 7 3 5 4 .5 2 5 2 2 5 4 .1 9 1 8 9 2 9 3 6 .7 6 1 3 2 3
2 9 3 6 .7 6 1 5 4 .1 9 1 8 9 5 3 .8 5 8 5 6 2 9 0 0 .7 4 4 8 6 5
2 9 0 0 .7 4 5 5 3 .8 5 8 5 6 5 3 .5 2 5 2 3 2 8 6 4 .9 5 0 6 2 3
2 8 6 4 .9 5 1 5 3 .5 2 5 2 3 5 3 .1 9 1 9 2 8 2 9 .3 7 8 6
2 8 2 9 .3 7 9 5 3 .1 9 1 9 5 2 .8 5 8 5 7 2 7 9 4 .0 2 8 7 9 5
2 7 9 4 .0 2 9 5 2 .8 5 8 5 7 5 2 .5 2 5 2 4 2 7 5 8 .9 0 1 2 0 7
2 7 5 8 .9 0 1 5 2 .5 2 5 2 4 5 2 .1 9 1 9 1 2 7 2 3 .9 9 5 8 3 7
2 7 2 3 .9 9 6 5 2 .1 9 1 9 1 5 1 .8 5 8 5 8 2 6 8 9 .3 1 2 6 8 5
2 6 8 9 .3 1 3 5 1 .8 5 8 5 8 5 1 .5 2 5 2 5 2 6 5 4 .8 5 1 7 5
2 6 5 4 .8 5 2 5 1 .5 2 5 2 5 5 1 .1 9 1 9 2 2 6 2 0 .6 1 3 0 3 4
2 6 2 0 .6 1 3 5 1 .1 9 1 9 2 5 0 .8 5 8 5 9 2 5 8 6 .5 9 6 5 3 5
2 5 8 6 .5 9 7 5 0 .8 5 8 5 9 5 0 .5 2 5 2 6 2 5 5 2 .8 0 2 2 5 4
2 5 5 2 .8 0 2 5 0 .5 2 5 2 6 5 0 .1 9 1 9 3 2 5 1 9 .2 3 0 1 9 1
2 5 1 9 .2 3 5 0 .1 9 1 9 3 4 9 .8 5 8 6 2 4 8 5 .8 8 0 3 4 5
2 4 8 5 .8 8 4 9 .8 5 8 6 4 9 .5 2 5 2 7 2 4 5 2 .7 5 2 7 1 7
2 4 5 2 .7 5 3 4 9 .5 2 5 2 7 4 9 .1 9 1 9 4 2 4 1 9 .8 4 7 3 0 7
2 4 1 9 .8 4 7 4 9 .1 9 1 9 4 4 8 .8 5 8 6 1 2 3 8 7 .1 6 4 1 1 5
2 3 8 7 .1 6 4 4 8 .8 5 8 6 1 4 8 .5 2 5 2 8 2 3 5 4 .7 0 3 1 4 1
2 3 5 4 .7 0 3 4 8 .5 2 5 2 8 4 8 .1 9 1 9 5 2 3 2 2 .4 6 4 3 8 4
2 3 2 2 .4 6 4 4 8 .1 9 1 9 5 4 7 .8 5 8 6 2 2 2 9 0 .4 4 7 8 4 5
2 2 9 0 .4 4 8 4 7 .8 5 8 6 2 4 7 .5 2 5 2 9 2 2 5 8 .6 5 3 5 2 4
2 2 5 8 .6 5 4 4 7 .5 2 5 2 9 4 7 .1 9 1 9 6 2 2 2 7 .0 8 1 4 2 1
2 2 2 7 .0 8 1 4 7 .1 9 1 9 6 4 6 .8 5 8 6 3 2 1 9 5 .7 3 1 5 3 5
2 1 9 5 .7 3 2 4 6 .8 5 8 6 3 4 6 .5 2 5 3 2 1 6 4 .6 0 3 8 6 8
2 1 6 4 .6 0 4 4 6 .5 2 5 3 4 6 .1 9 1 9 7 2 1 3 3 .6 9 8 4 1 8
2 1 3 3 .6 9 8 4 6 .1 9 1 9 7 4 5 .8 5 8 6 4 2 1 0 3 .0 1 5 1 8 6
187
In intraday it is difficult for the stock to complete
more than 5 spirals. In rarest occasion the stock
used to complete the sixth spiral.
From the above data I will buy nifty future above

3009.50 for target 3946.13 or else I will sell nifty
future at 2937 for target 2900. In both the cases
my stop loss will be 2973.
If you will observe the intraday price time chart

you will find all the calculated targets in the down
side has provided to be the very short term support.
188
11. Mid point trading technique:
In a day the stock prices can be recorded as the

open, close high and low. In rarest occasion all the
prices used to be same. In mid point trading
technique as per the Gann’s method if the current
price is below the mid point of the high and low of
the trend then we can say the price trend is in down
side direction and vice versa.
Mid point method in intraday is only for the highly

speculative intraday traders. In this method identify
the swing high and swing low of any prior trend.
Find the mid point of this swing action. Compare
the current price with the mid point to identify the
trend.
Once the trend is identified find the trend

termination point which is 360 degree price range
derived from the mid point and high or low. Entry
must be made at 45 degree angle price point.
189
Example: Nifty future swing low was 2863 and

high was 2958 at 10:50 a.m. finding the trade
initiation points.
The mid point is 2863+2958 =2910.5.
Say the current Nifty future at 11:30a.m is 2937

this signifies the trend is up.
From mid point to high 2958 the price range is Rs

48/-.
Applying 360 degree factor on the Rs 48/- we will
get Rs80/- as the termination price range.
The termination price will be 2910.5+80=2990.50

The entry can be made at the current price. But the
target can be derived using the mid point logic. For
this up move my
1st target will (2958+2910.5)/2= 2934

2nd target will be (2990.5+2958)/2=2974.25
3rd target will be (2974.25+2990.5)/2=2982.37 etc
The stop loss for this move will be 2910.5
190
12. Trading using the Gann angles
Gann has specified 11 different angle relations like
1/16,1/8,1/4,1/3,1/2,1/1,2/1,3/1,4/1,8/1,16/1 which
I have already explained in the 2nd chapter. These
angles are being derived from the price and time
components. If one unit change in price brings one
unit change in time then we can say it is 1/1 angle.
In this method take the price range and the time

and derive the relation such as the price change and
the time proportionate change. If the price and time
change relates to any of the angle relation then take
the degree equivalent or the retracement level for
the future price and time projection.
Example: Nifty future swing low was 2863 and

high was 2958 at 10:50 a.m. finding the trade
initiation points based on the gann angle. The price
range is 2958-2863 =Rs 95/-. The time between
these two swing points are 45 minuets. Hence it
establish 2/1 angle relation. Hence the price and
time will square with each other at 26.25
191
angle relation in each 45 minutes time interval.
The termination points for this action will be

2958+95= 3053 or 2863-95=2768
In between this range in each 26.25 degree it will

find the resistance and support derived from these
two swing points.
Resistance
2863 53.50701 53.65281 2878.6239

2878.6 53.65281 53.79861 2894.2903
2894.3 53.79861 53.94441 2909.9993
2910 53.94441 54.09021 2925.751
2925.8 54.09021 54.23601 2941.545
2941.5 54.23601 54.38181 2957.381
2957.4 54.38181 54.52761 2973.2601
2973.3 54.52761 54.67341 2989.1816
2989.2 54.67341 54.81921 3005.1457
3005.1 54.81921 54.96501 3021.1522
3021.2 54.96501 55.11081 3037.2013
3037.2 55.11081 55.25661 3053.2928
192
Support
2958 54.388 54.242 2942.2

2942.2 54.242 54.096 2926.4
2926.4 54.096 53.95 2910.6
2910.6 53.95 53.804 2894.9
2894.9 53.804 53.659 2879.2
2879.2 53.659 53.513 2863.6
2863.6 53.513 53.367 2848
2848 53.367 53.221 2832.5
2832.5 53.221 53.075 2817
2817 53.075 52.93 2801.5
2801.5 52.93 52.784 2786.1
2786.1 52.784 52.638 2770.7
If the current price is 2925 then it is above my mid

point of the swing high and low and I will make an
entry buy entry for target of 2941-2957-2973.In
this case also I will take the mid point as my stop
loss.
As per my experience the mid point stop loss proves

to be very successful
193
13. Price range and time squaring technique
In the October 08 crash we made a low 2207.30 in

the nifty future on 27th October 2008 and in
November 5th 2008 we made intraday opening high
of 3298.90 on nifty future.
The price range for this low to high is = 3298.90-

2207.30=1091.60
The time elapsed in this high and low range is 8

trading days and 10 calendar days.
Converting the above information into degrees I got

1092 as 323,8 trading days as 284 and 10 calendar
days are 344 degrees. This shows that the price and
time are not squaring. In my book on ‘‘Gann’s
method’’ in chapter -4 as I have described price
and time are the dynamic quantities.Hence
considering it as a static entry is not a fair analysis.
Gann has also considered price and time as an
energy packet.Hence it must not be static.
194
Then at this junction I may have left the squaring
phenomenon way behind which I have to hunt now.
Since I have taken the trading days, calendar days
which cannot and must not be altered because it is
less dynamic than the price. Then the option left in
my hand is to hunt for a new swing high and low
point which will be squaring with any one of the
day counts. Now my focus has gone to the 3285
which is also a swing high point on the 5th November
2008 price chart. Now taking the high as 3285 and
low as 2207 my new price range is 1078. The
degree conversion is 285 degree. Hence 8 trading
days is squaring with the price range with an error
fact of 1 degree which is very much accepted.
Now considering the past squaring has happened

in the 2207 to 3285 we need to find the price range
for the new square.
N(R)= (Square root of (1078)+ degree factor (285) )2
= (32.8329 + 1.5829 )2 =1184.449
Round it to 1185, now as per this method we will
have a price range of 1185 in the coming 8 trading
days starting from the 6th November 2008.
195
Hence in each time unit 148.125 (i.e 1185/8)) act
as a resistance and support calculated from high and
low.
Now supports calculated from the swing high 3285
are
a. 3285-148.125 = 3137
b. 3137-148.125=2989
c. 2989-148.125=2841
d. 2891-148.125=2693
e. 2693-148.125=2545
f. 2545-148.125=2397
g. 2397-148.125=2249
h. 2249-148.125=2101
Resistances calculated from the swing low of 2207

are : 2355, 2503.25, 2651.37, 2799.5, 2947.625,
3095.75, 3244, and 3392.
Now the conclusion will go as follows. On the first

day starting from November 6, 2008 I will have
resistance at 3392 and support at 3137. I will
consider the index is in up move if it maintains above
3264.5. Which is the mid point of (3392, 3137).
196
If it trades below 3264.5 then I will consider the
nifty is in down move.
But in the real case nifty future closed at 2991.65

on 5th November. This is just above my second level
of support 2989.
Hence for 6th November my calculation point will

be (3244, 2989). I will be bullish on index if it opens
and trades above 3116.5 which is the mid point of
my calculated resistance and support. If it trades
below that then I will be bearish. From the opening
data on 6th November 08 till 1 p.m I got nifty opened
at 2898 and made high of 2953.
Hence I can conclude that the current price is at my

4th level of resistance support, this is (2947.625,
2841). However these resistance and support points
will be effective for the 8 trading session starting
from the 6th November 2008.
197
You have already experienced the closing on the 5th

November 2008 which is very much inline with the
2nd level of support point calculated. The 6th
November high also inline with the 4th level of
resistances calculated from the low. Other data you
can validate as and when it will happen in the chart.
Since I have prepared this literature on 6th November
I do not have forthcoming data for validation.
The second most important thing this method

explains is on the 17th November 2008 (this is 8
trading days counting from 6th November) where
will be the nifty. Since I found the current price
moves 3 step ahead of time then the Monte Carlo
simulation process can help me to find the most
likely price forecast of the price. Since this subject
is out of scope of this discussion I can give the
predictive conclusion as i have a 70 % chance to
get 2397 level and 60% chance to touch 3244 level
by 17th of November 2008.
198
14. Retracement: Retracement technique is being

derived from the Fibonacci technique. Retracement
is of two types
a. Growth retracement: If the previous trend is

down and the current trend is down then it is called
decay retracement
b. Decay retracement : If the previous trend is up

and the current trend is down then it is called decay
retracement
Both the retracement is against the previous trend.

Previous trend is an ambiguous term which is
difficult to explain. However for intraday purpose
take the previous trend as one hour’s trend. In a
range bound market it is difficult to identify the
trend. Henceforth try to avoid retracement
technique.
The retracement levels or the support/resistance

levels is being taken from the Fibonacci method
wherein the support and resistance points are
199
being calculated by the help of fibonaci ratio.
Fibonacci ratios are 0.236,0.382,0.5,0.618,0.786 .
Take the nifty future 12th November 2008 price at

1:40 p.m which was 2957 . The previous one hour
trend was a up trend and the retracement has started
from high 2973 the low corresponding to this high
is 2932. Hence it is defined as a decay retracement
and we will draw the supports from the high of
2973. 0.236 2963.3
0.382 2957.3
0.5 2952.5
0.618 2947.7
0.786 2940.8
In this retracement table if the price falls below

2947 then there is little chance that the price will
bounce back from this level. This level of 0.618 is
called death zone for the long traders.
How to make a trade decision?

In this decay retracement sell nifty future below
2947 with stop loss 2963 and target 2906. 2906 is
the 1.618 or phi target level for this move.
200
15. Parallel projection:
Parallel projection is a retracement within a

retracement. It is always better to draw the
retracement line in each new swing point in order
to identify the supports and resistances. The rest of
the procedures are same as the retracement.
16. Trading with clusters:
Fibonacci cluster is a culmination of Fibonacci

retracement from various significant highs and lows
during a given time period.
In other words I can say if you will draw two or
more retracement lines in a closely related swing
high and low prices then you will find one particular
price which will occur in every retracement. It is
practically impossible to find the cluster in the chart.
However by taking the help of median and mode
function you will be in a position to find out the
cluster. We have provided the cluster calculator in
our web site www.smartfinancein.com
201
In order to use the Fibonacci cluster you need to

provide three swing high and swing low price points
as input to the calculator. Cluster will determine
the most important support and resistance for current
price movement. While choosing the inputs in the
intraday price chart take last one hour’s three
different swing highs and swing lows. Last one
hour’s three consecutive swing high and swing low
you need to take for next day calculation. You can
also take any three important swing highs and lows
of the day to find the next days most sensitive
support points.
Example: On 12th November 2008 in nifty intraday

chart I have identified the
a. 2866 , 2956 b.2915,2985 c.2795,2868
are the three pairs of swing highs and lows.
Applying this on the calculator I got cluster support

at 2900 and resistance at 3002. Now for the trading
day November 13 these two prices will act as the
support and resistance.
202
How to initiate trade using the cluster?
1. Follow the method explained in the midpoint

trading technique to make a trade decision.
2. Using these two points as the swing high and
low in the Fibonacci retracement method make the
trade decision.
3. Using these two prices as the swing high and
low in the Gann calculator also you can take the
trade decision.
17. Bat pattern:
This pattern is being developed by Scott Carney

in 2001. It is of two types . Bullish & bearish bat
pattern.This pattern is represented below.
Bullish Bearish
203
As you have seen from the above picture these
patterns can be constructed by using 5 price points.
These price points associated with each other
through some Fibonacci ratio price relationship.
By taking any price point ‘X’ -‘A’ you can derive
the price point B, C, D.
Once you have identified the five price points

compare it with the current price. The current price
will suggest you in which phase the price is in.
Either it is in the growth retracement phase or in
the decay retracement phase. From there you need
to derive the trade decision.
Example: Now say I have chosen nifty future

high as 2985 at 12:29 p.m and low as 2907 at
12.46 p.m. Based on these two data points I have
derived the following price points for bullish and
bearish bat pattern.
204
Bat Pattern
Bullish Bearish
A 2985 A 2907
X 2907 X 2985
C 2955.2 2936.796
B 2936.8 2955.204
D 2976.1 2915.892
While making the trade decision the point D is
important for me. If the current market price is
above 2976 (i.e. the point D price of the bullish bat
pattern) I will Buy nifty for initial target of 2985
and stop loss as 2955. I will sell nifty below 2915
for initial target of 2907 and stop loss 2936 .
It is commonly observed that if the bat formation

is broken then the target used to get expanded
unlimitedly.
You can observe from the intraday chart that once

the bearish bat pattern is broken at around 1:45 p.m
the target gets expanded till 2795.You can also find
the data points from one swing point by using the
Fibonacci retracement levels.
205
18. Crab pattern: This is also being developed by
the same person by Scott Carney in 2000. The
pattern looks like below.
Bullish Bearish
Example: Say I have taken the nifty future low as

2907.Then the bullish and bearish crab pattern
prices will be as given in the table below.
crab pattern
Bullish Bearish
X 2907
price 50
A 2926 2876
B 2937.9 2887.9
C 2887.9 2895.2
D 2826.1 2987.9
206
If you are deriving the prices of these patterns from
one price point then you need to specify one price
range arbitrarily in order to get the other price point
In crab pattern the A and B price is very important.

If the current market price rules above the B point
of the bullish crab pattern then buy with stop loss
at X point. The target will be unlimited. Same way
sell future at B point of the bearish crab pattern
with stop loss at X point and target unlimited.
19. Ideal butterfly pattern:
This pattern is also derived from the Fibonacci

ratios.
Bullish Bearish
207
Some key concepts one must know about this
pattern:
A. Both X and A price must be a real swing high or

low which would have occurred in the recent past.
B. The X price and A price must have the 0.786

relation ship between them.
C. The B and C swing point is derived in such a

way that the AB price difference must be equal to
the BC price difference.
D. D price point will be lowest among the 1.618

and 1.272 retracement level drawn from X or B.
Due to the complexity of this strategy I left it
without any example.
208
20. Trade using gaps:
If the opening price of a script on certain day is

higher than the previous day’s high then we used
to say that the upside gap is formed and vice versa.
The next question is how to interpret this gap? Once
the gap is formed in the opening trade, tendency
of the trader is to see whether the gap is bridging
or widening. The gap is bridged means the pre
existing event (which formed the gap) is going to
end. The gap is widening means the pre-existing
trend (which formed the gap) is going to continue.
Same tendency also hold good in the intraday 5

minutes price chart. If gap exists in the 5 minutes
price chart then it signals the trend is set and as a
trader you need to swim in the direction of the trend.
In this method if the price forms wide gap at least
three consecutive times then you must enter the
trade with tight stop loss below the 1st gap formation
price. Your target will be unlimited and not
computable by any mathematical procedure.
209
Example:
Say the 10 a.m to 10:05 a.m Nifty high is 2890

and the 10.05 a.m-10:10 a.m Nifty candles suggests
open of 2894 and high 2907, same way 10:10 a.m-
10:15 a.m nifty open and high suggest 2918-2930.
This suggests that the trend is set in the upside
direction and gap is forming in the upside direction
.
At this junction as long trader keeping the 1st level

of gap formation point i.e 2890 as stop loss you
can buy nifty for higher target. In this method
projecting the target is not possible by any means.
Hence stick to the trailing stop loss mechanism.
Same holds good for the down side gap formation.
You can read more about the gap on my book on
technical analysis volume-2.
210
21. Trade using the ‘Island reversal model’: “If
the rising gap of any prior trend coincides with the
falling gap of any current trend then we used to
say that the island reversal pattern is formed”
This formation can also happen in the intraday price

chart. Take the case of Gail price data on 12th
November 2008.
211
In the above 5 minutes price chart the gap which is

formed in the 10:25 a.m to 10:30 a.m has reappeared
at the time of 1:55 p.m to 2.pm. in the same price
band of 208 to 210 . This clearly indicates the
formation of island reversal pattern in Gail. Before
this formation the stock made high of 215 . Hence
the height of the island is 215-208= Rs 7/- .
Thence deriving the 0.618 level from the island high

I got 215-7X0.618=210.60 will be the price for my
short entry. With stop loss as 215 and target will be
1.618 level from the island high = 215-1.618*7 =
203.70
212
This is very simple to apply on the intraday chart
and rewards big return in volatile market. Only 2
Fibonacci ratios 0.618 and 1.618 is being used in
case of intraday traded decision. However other
ratios is being used in case of weekly or monthly
data analysis.
22. Trade using the Pitch fork: In Andrew Pitch
Forks method three parallel horizontal trend lines
are drawn from three different price points in such
a way that the first trend line pass through the
median point joining the second and third price
points. Other two trend lines must be parallel to
the 1st trend line. This is also called the median
line trading method.
How to identify whether the current price trend

is trending or trailing? If the opening is higher
than the previous closing , the current high is higher
than the previous high, the current low is higher
than the previous low or vice versa then we can
say it is a trending market or trailing market. This
is the simplest tool available in all the technical
analysis s/w.
213
214
How to initiate the trade?
The median line is very important for making the

trade decision. If the current market price is above
the median line and lower the high fork then we
can say that the trend is up and one must buy at
this time considering the upper fork price as target
and median price line as stop loss. Same way one
must sell if the price is below the median line and
above the lower fork. In this method if the price
rises above the upper fork or falls below the lower
fork then the trend will be expanded with great
volatility. In these cases hold the trade with trailing
stop loss.
215
23. Trade using the MACD:
An indicator developed by Gerald Appel, that is

calculated by subtracting the 26-period
exponential moving average of a given security
from its 12-period exponential moving average.
By comparing moving averages, MACD displays
trend following characteristics, and by plotting the
difference of the moving averages as an oscillator,
MACD displays momentum characteristics. A 9-
day exponential moving average, called the
“signal” (or “trigger”) line is plotted on top of
the MACD to show buy/sell opportunities.
1. The basic MACD trading rule is to sell when

the MACD falls below its signal line. Similarly,
a buy signal occurs when the MACD rises
above its signal line. It is also popular to buy/
sell when the MACD goes above/below zero.
2. When the shorter moving average pulls away

dramatically from the longer moving average
(i.e., the MACD rises), it is likely that the
216
security price is overextending and will soon
return to more realistic levels.MACD over bought
and oversold conditions vary from security to
security.
3. An indication that an end to the current trend

may be near and it will occur when the MACD
diverges from the security price.
4. A bearish divergence occurs when the MACD

is making new lows while prices fail to reach
new lows.
5. A bullish divergence occurs when the MACD

is making new highs while prices fail to reach
new highs.
6. A positive divergence occurs when MACD

begins to advance and the security is still in a
downtrend and makes a lower reaction low.
217
7. A bullish moving average crossover occurs when

MACD moves above its trigger line. Bullish
moving average crossovers are probably the most
common signals and as such are the least reliable.
8. Bullish centreline crossover occurs when

MACD moves above the zero line and enters
into positive territory. This is a clear indication
that momentum has changed from negative to
positive.
Example: Below picture exhibits the MACD
histogram of Satyam computer and Tatasteel.
218
24 Trade Using Bollinger band
John Bollinger, this technique seeks to combine

moving averages with volatility (i.e. standard
deviation), using standard deviation as a price band
technique.
Standard deviation is defined by the symbol . The
statistical formula is given below.

 (X - X)

N
219
Bollinger has defined three bands upper, middle
and lower band. The middle band which acts as a
support line and helps us for taking the trade
decision. The upper and lower band define the
resistance and the support line.
The Middle band is defined as a 20 period moving

average.
Middle Band(i.e. X ) =
X
N
Upper Band = X + 2 
Lower Band= X - 2
1. Abrupt change in prices tend to happen after the

band has contracted due to decrease of volatility.
2. If prices break through the upper band, a

continuation of the current trend is to be expected.
3. If the pikes and hollows outside the band are

followed by pikes and hollows inside the band, a
reverse of trend may occur.
220
4. The price movement that has started from one of
the band’s lines usually reaches the opposite one.
The last observation is useful for forecasting price
guide posts.
25. Trade Using moving average channels:
The ‘Moving Average Envelopes indicator’

calculates two moving averages using the two price
inputs; High price and Low price. Both averages
are calculated using price data from the same
number of bars, per the input Length.
The second method for calculating the MAE is by
taking the closing price into consideration and the
second value is % variation of the first computed
value. If the script is more volatile, the percentage
should be taken larger.
A sell signal is generated when the security reaches
the upper band whereas a buy signal is generated
at the lower band. The optimum percentage shift
depends on the volatility of the security.
221
When the envelop is constructed using High and

low it is called as HiLo moving average band.
How to use Envelop to identify the buy/ sell

indicator?
Sell when the prices close below the middle band

and buy when the prices close above the middle
band. Additional buy or sell signals are taken when
the prices, after the first trade signal, either rally or
react near the upper or lower bands without breaking
them. It will be seen that there are multiple signals
of this nature.The signal of the other side would act
as the stop loss.
222
26. Discrete-Time model using Monte carlo
simulation: This is the most difficult stock price
forecasting model derived from the Monte carlo
simulation procedure. It follows the following
assumptions :
a. Stock price follow the geometric Brownian

motion
b. Change in stock price = Expected return X
stock price X time interval + volatility Xstcok
price X standard normal distribution of mean zero
and standard deviation 1X square root of time
interval
s = m*t*S + S*E* t
s= change in stock price
m= expected return
t= time interval in which the return is expected
S= stock price
E= standard normal distribution of mean zero and
standard deviation 1
223
Example: Say nifty is trading at 2950 and I
expect return of 2% in intraday trade. Hence
my time is 1/365 years 0.00274 years. Assume
the volatility is 65%. Now simulate the nifty
price based on the geometric Brownian motion
and forecast the price at which I must enter.
The Microsoft Excel function which I will be using
f o r t h i s c a l c u l a t i o n i s RAND(). This will generate
a random number between 0 and 1, and

NORMSINV(RAND()) to find the standard normal
distribution of mean zero and standard deviation
1. Based on the above information I will get the
following data . These data or the nifty price will
vary each time you will press delete key button on
any cell of your excel spread sheet.
Because we have chosen the RAND() function

which will generate a number in between 0-1
dynamically.
224
Nifty E Change
2950 -0.81809 -81.9518
2868.05 0.631748 61.80519
2929.85 0.44194 44.21587
2974.07 -0.02919 -2.79035
2971.28 -0.31436 -31.6177
2939.66 -1.87106 -186.982
2752.68 -0.23601 -21.9534
2730.73 0.086741 8.208836
2738.94 -1.08581 -101.036
2637.9 -0.86763 -77.7271
2560.17 0.511827 44.72448
2604.9 0.976711 86.70833
2691.6 -1.47159 -134.621
2556.98 -0.72756 -63.1573
2493.83 0.98433 83.65764
2577.48 0.070791 6.349368
2583.83 0.990349 87.20613
The above process signals that the stock price is so

dynamic that it can change in any direction to any
extent.
How to make the trade decision? Say the next
swing point is 2973 which is 23 points up from the
chosen point. I will simulate my excel sheet until
and unless I have not got the price change associate
with my chosen point to 23. Now I got 21.This
signals that the second point of iteration is 2971.8
225
which says I will buy at 2971.80 with stop loss at
2950, my target will be the next number higher to
2971.8 which is 3023.-3035.8 and so on.
Nifty E Change
2950 0.215584 21.80015
2971.8 1.144469 115.8839
3087.684 0.404387 42.65253
3130.337 1.752704 186.8474
3317.184 -1.4301 -161.227
3155.957 2.089342 224.5246
3380.482 -1.22788 -141.044
3239.438 -1.96323 -216.209
3023.23 1.112513 114.6023
3137.832 -0.19579 -20.7312
3117.101 -0.0718 -7.44371
3109.657 0.391728 41.6167
3151.274 -1.07859 -115.474
3035.8 1.478011 152.8314
3188.631 0.423456 46.11581
3234.747 0.0958 10.72095
3245.468 -0.04413 -4.69535
226
This iterative process is one of the most successful
methods in intraday.
27. Trade using the Engulfing candle pattern
“Two real candle body having opposed colour
where in the second candle totally engulfing the
first candle”. Engulfing pattern is of two types.
Engulfing Pattern
1st candle Engulf the 2nd
1. Bullish engulfing pattern:- “the first candle

is a black body with low volume and the second
candle is a white body with high volume totally
engulfing the first candle”
227
Bullish Engulfing Pattern
This is a most common candle pattern found in the

price time chart. The engulfing pattern is a good
trend indicator for swing traders. One most
important factor you need to remember is that the
entire candle patterns are short term in nature.So
the price projection also is short term in nature. My
point is if the candle pattern fails to give the break
out then the better practice is to exit.
Example: I have identified the formation of bullish

engulfing pattern formation in the price time chart
of Tatasteel in June 18th, 2007and June 19th, 2007.
Explain the breakout, target and the trend.
228
Analysis: Bullish engulfing pattern form in a down

trend. The price trend of Tatasteel was down in the
previous time period. Below the OHLC data is
given for reference.
Date open high low close volume

15-Jun-07 615.2 620 595.95 600.45 1557738
18-Jun-07 600.45 608.95 586.5 589.15 1517046
19-Jun-07 588 617 585 612.05 1979019
20-Jun-07 615 616.8 605 609.4 1227795
229
From the above OHLC data if you observe on 19th
June 2007 the high is higher than the 18th June 2007
high and 19th June 2007 low is lower than the 18th
June 2007 low and the 19th June 2007 closing is
higher than the opening which forms a white candle
and confirms the formation bullish engulfing
pattern.
Pattern breakout: On 19th June 2007 the high to

low price range is 617-585=32 price units. The
78.6% (i.e. the fibonacci retracement ratio) of the
price range is 25. The pattern breaks out will
happen at a price of 617 +25= 642. As long as the
price maintain below this price one can assume
that that the throwaway can happen at any stage.
Target: Engulfing pattern target is unlimited until

and unless the price does not form any bearish
reversal candle pattern in the chart. In more than
50% cases the throw away happens before giving
a break out in this pattern.
230
Volume: Volume used to be moderate in the
engulfing day. Sudden rise in volume you can
observe in the pattern break out day.
Pattern failure: If the price moves below 585-25

= 560 then we say that the bullish engulfing pattern
is a failure.
What will be entry and exit point?
The entry is suggested at a price above the

engulfing day’s high having stop loss below the
pattern failure price point. The target is unlimited
until and unless any bearish formation does not
takes place. It is also advisable to make an entry in
the counter after the pattern break out happens.
In the above example the pattern failure does not

happen but ‘throw away’ happens multiple times
before giving a breakout on 14th July 2007.
Note: In this chapter context the bullish trend

reversal pattern means the trend is going to change
231
from bullish to bearish.
2. Bearish engulfing pattern:- “The first candle is

a white body with low volume and the second
candle is a black body with high volume totally
engulfing the first body”
Bearish Engulfing Pattern
This is also a common pattern in price time chart

and strongest bearish reversal pattern. The success
rate of this pattern formation is more than 80 %(
i.e. in more than 80% cases the pattern used to
give break out). Once the pattern is identified the
next job is to find out the break out point,
throwaway price, entry and exit point, pattern
failure price point and target.
232
In all candle stick reversal patterns the price target
is unlimited until and unless any contradictory
reversal pattern is not formed in the price time chart
in the breakout direction.
Example: I have identified the formation of bearish

engulfing pattern in SBI on 06th June 2007. Find
out the break out point, target, pattern failure point,
entry and exit point? Below the price time chart
and the OHLC data is given for reference.
233
Date Open High Low Close Total Trd Qty

01-Jun-07 1364 1385 1356 1378.9 1908666
04-Jun-07 1400 1418.4 1390 1406.4 2182423
05-Jun-07 1400 1445 1393 1437 1808672
06-Jun-07 1445 1454 1381 1390 1857287
07-Jun-07 1382 1401.9 1353.3 1360.7 2148431
08-Jun-07 1331.3 1387 1321.3 1356.6 2037482
Analysis: Bearish engulfing pattern forms in a bull
trend and indicates reversal of the bull trend. From
the OHLC data it is being observed that the 6th
June 2007 high is higher than the 5th June 2007
high, the 6th June 2007 low is lower than the 5th
June 2007 low. The closing of the 6th June 2007 is
lower than the opening. Hence it confirms the
formation of bearish engulfing pattern.
Pattern break out: On 6th June 2007 the high to

low price range is 1454-1381=73. The 78.6% (i.e.
the fibonacci retracement ratio) of the price range
is 57.37. The pattern break out will happen at a
price of 1381 – 57.37= 1323.63. As long as the
price maintains above this level one can assume
that the throw away can happen at any stage.
234
Target: Engulfing pattern target is unlimited until
and unless the price does not form any bullish
reversal candle pattern in the chart. In more than
50% cases the throwaway happens before giving a
break out in this pattern.
Volume: Volume used to be moderate in the
engulfing day. Sudden rise in volume you can
observe in the pattern break out day.
Pattern failure: If the price moves above

1454+57.37 = 1511.37 then we say the bearish
engulfing pattern is a failure.
What will be entry and exit point?
It is advisable to enter a short trade on the day

following the engulfing day with a price above the
break out point having stop loss at the pattern failure
price point. The target will be unlimited until and
unless it has not formed any contradictory reversal
pattern. It is also advisable to make an entry after
you encounter a break for better result.
235
In our case the pattern has failed to give a break out
and became a failure in the future days.
28. Impulse : Impulse is a 5 wave impulsive wave

pattern in the Elliot wave theory. It has wide range
of the properties. In the intraday context I have
derived few properties for making the trade
decision.
a. Wave 1 length must be the 0.382 retracement

level of prior swings
b. Wave 2 must not be higher than 0.618
retracement level of wave1
c. Wave 3 should be of 1.272 retracement level
of wave 1
d. Wave 4 must not be higher than 0.618
retracement of wave 3
e. Wave 5 must have the same length as wave 1.
Based on these assumptions I will derive the

swing turning points and I will initiate the trade
in the 3rd wave construction process.
236
Example: Say the swing high and low of nifty
future on 12th November 2008 at 10:50 a.m. is
2963 and 2858.
Based on the above assumptions and ‘data points’

I have derived the following construction and
termination points for these patterns. Each
construction and termination point will act as the
resistance and support for the move.
high low price range
2963 2858 105
construction
termination
wave 1 2858 2898.11
wave 2 2898.11 2873.322
wave 3 2873.32 2904.8523
wave 4 2904.85 2885.3666
wave 5 2885.37 2925.4766
I will initiate the buy trade above 2873 for target
2904 and same way I will also buy above 2885
for target 2925 .
If I want to sell; I will sell below 2898 for target
2873 . My point is that the buy decision must be
made in the construction price of wave 1,wave3
and wave 5 same as the sell decision points are
wave 2 and wave 4.
237
However this pattern happens in a upward
trend.Hence I caution not to initiate the sell order
in this pattern. My point is you must derive the
construction and termination points of the waves
only if the trend is up or else not.
29. Zigzag: Zig-zag is a 5-3-5 pattern happen in
the phase of the corrective waves. Means after a
fall,there is one set of 1-2-3-4-5 wave formation
then 1-2-3 wave formation and the last leg is 1-2-
3-4-5 formation. This is wave formation which
holds the same rule as given in the impulse. In this
you need to identify the 13 different construction
and termination points.
Example: Say the swing high and low of Nifty

future on 12th November 2008 at 10:50 a.m. is
2963 and 2858.
Based on the above assumptions and ‘data points’

I have derived the following construction and
termination points for these patterns. Each
construction and termination point will act as the
resistance and support for the move.
238
h ig h lo w p r ic e r a n g e
2963 2858 105
c o n s t r u c t i o nt e r m i n a t i o n
w a v e 1 2858 2 8 9 8 .1 1
w a v e 2 2 8 9 8 .1 1 2 8 7 3 .3 2 2
w a v e 3 2 8 7 3 .3 2 2 2 9 0 4 .8 5 2 3
w a v e 4 2 9 0 4 .8 5 2 3 2 8 8 5 .3 6 6 6
w a v e 5 2 8 8 5 .3 6 6 6 2 9 2 5 .4 7 6 6
w a v e 1 2 9 2 5 .4 7 6 6 2 9 4 0 .7 9 8 6
w a v e 2 2 9 4 0 .7 9 8 6 2 9 3 1 .3 2 9 6
w a v e 3 2 9 3 1 .3 2 9 6 2 9 4 3 .3 7 4
w a v e 1 2 9 4 3 .3 7 4 2 2 9 4 7 .9 7 5 2
w a v e 2 2 9 4 7 .9 7 5 2 2 9 4 5 .1 3 1 8
w a v e 3 2 9 4 5 .1 3 1 8 2 9 4 8 .7 4 8 6
w a v e 4 2 9 4 8 .7 4 8 6 2 9 4 6 .5 1 3 4
w a v e 5 2 9 4 6 .5 1 3 4 2 9 5 1 .1 1 4 4
Since it is a corrective pattern I will initiate the sell

at 2nd part 3rd wave termination. This equals to 2943
point with stop loss at last part 5th wave termination
point this equal to 2951.The target for this move
will be 1st part 1 wave construction point this is
equal to 2858. Since it is a corrective pattern, do
not initiate any buy trade in any of the swing turning
points.
239
30. Ending Diagonal : Ending Diagonal is known
as ED pattern in wave theory. In the impulse pattern
the five wave sequence has three rising waves and
the two falling wave. The trend line joining the
wave 1-3-5 termination points and the wave 2-4
termination point produce a channel for the impulse
pattern. This pattern is called ending diagonal
Ending Diagonal 5
Upper Channel Line
3
4
1
Lower Channel Line

2
31. Leading diagonal : If the channel has 5-3-5-3-

5 or 3-3-3-3-3 waves then it is called as a leading
diagonal LD. Below picture exhibits the formation
of ending diagonal and leading diagonal pattern.
240
Leading Diagonal
5-3-5-3-5 pattern 5
3
1
4
2
Wave 1 has 5 subwaves
32. Flat :
Flat is a corrective pattern in the wave theory.

Slightly differ from the zigzag pattern. It is a
corrective pattern of A-B-C having sub wave of 3-
3-5. Below picture exhibits the Flat pattern.
241
Flat
3-3-5 pattern
A
C
Wave A has 3 subwaves
Wave B has 3 subwaves
Wave C has 5 subwaves
33. Expanding triangle-Wave principle triangle

contains five waves a-b-c-d-e, wherein each wave
will be having three sub waves 3-3-3-3-3. The
triangles are divided into two categories a.
contracting, b. expanding. Further more each
category is divided into three type’s a. symmetric
b. ascending c. descending. Below picture exhibit
the triangles.
242
Expanding Triangle
3-3-3-3-3 pattern
2 4
1
It has 3 bottom points and 2 top points
base part is exapnded due to decline in 3
last 3 waves. This signals trend reversal
in bearish side
5
34. Contracting triangle

Contracting Triangle
3-3-3-3-3 pattern
4 5
1 It has 3 bottom points and 2 top points

base part is exapnded due to decline in
first 3 waves. This signals trend reversal
in bullish direction if the price manage
to cross point 5 high.
243
Above 5 patterns are difficult to express
numerically.However just use the termination
points as given in the figure to derive the trade
decision and identify the patterns by drawing the
trend lines.
I conclude my writing with few simple words. If

you understood the art of converting the number
to degrees and again the degree to numbers; then
you understood the tricks of legend trader W.D.
Gann. I hope this piece of information will help
you for making an accurate trade decision. My
research on Gann’s is not ending here. Still I am in
a process to explore many other interesting parts
of Gann’s work.It may find a place in my future
editions if God’s blessing and your best wishes will
be with me. I hope as a reader of this book you will
start your journey to learn more and more on this
Great person’s work.
244

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Gann’s Method

Geometry of Making Profit

Mr Soumya Ranjan Panda

3rd Edition -November 2011

“ I can only say that W.D.Gann’s method is one

M/s Smart Finance is an independent publisher of

M/s Smart Finance

“ Gann’s study has deeply inspired me to think

This book is having 8 chapters starting with the

The complete understanding of this book will

“ For me Gann was one of the best mathemati-

This work is one of my most important achieve-

“Putting theory into practice is the best job which

Chapter 2: Squaring Price With Price 25

Chapter 3: Current Price and Past Time 37

Chapter 4: Price Range and Time 49

Chapter 5: Price Range and Time In Current Trend 67

Chapter 6: Gann’s angle and dynamic principles 91

Chapter 7: Gann Tools and Technique 117

Chapter 8 : 34 Intraday Trading Techniques 131

Introduction to Gann’s Method

1.2 Gann wheel

1.3 Gann wheel analysis

1.4 Degree to Price relation

1.5 Constructing Gann’s channel

Introduction to Gann’s method

The key point of his work is that he

Though many Gann legends argue that this is

1.2 Gann wheel:

The Gann wheel is the numerical arrangement

The picture given in the next page is a Gann’s

Gann Square of 9 Table

The second spiral starts from 10. Like this

The above table is the basic arrangement of

Now go to little complex nature of this 9X9

1.3 Gann wheel analysis:

Now little bit concentrate on the Gann’s 9X9

1.4 Degree to Price relation :

Degree to factor table:

Why these factors?

Now see the number relation with the

Example 1: Which number (say N) is 1800

N = ( 15 -1)2 = 8.25. If you will neglect

Example 2: What number (N) is 1800 up

N= ( 34 +1)2 =46.66. If you will neglect

Example 3: On 30th August 2007 SBI, OHLC

Before applying the Gann technique let us

Now I will start my calculation from the

Above table represents that 1589 is 450 up

Gann trader follows this rule as to enter a

Is this method useful for intraday?

It is one of the best methods for intraday. You

1.5 Constructing Gann’s channel:

Step 1: Consider the most significant low.

Step2: Compute the 45 degree, 90 degree,

Step 3: Draw the horizontal lines at those

Step 4: Take the square root of low and