Let us focus on this Cardinal Cross and the Ordinal Cross more closely. From a price and time forecasting point of view, the two most important lines are the Cardinal Cross and the Ordinal Cross. Since the circle has an angle of 360 degrees, each sector of 45 degrees will constitute one angle for the Gann Analysis. Once that is done, the entire Gann Square is broken up into 8 equal parts of 45 degrees each. For example, since the Gann Square is a perfect square it can also be represented as a circle that perfectly circumscribes the four corners of a square.
In the entire Gann Square, it is the numbers on the cross and the diagonals that are really important from a forecasting point of view. Typically, the time alignment is used for swing trading, while the price alignment is used for forecasting prices and also for identifying supports and resistances of a stock. The Gann Square basically looks for price and time alignments and is often used to forecast prices. The Gann Square of 9 is simply a tool that calculates time and price besides calculating the square root of numbers, including the mid points.
W D GANN ON CIRCLE HOW TO
How to apply Gann Square in stock trading? The logical movement from 1 to 81 is in a clock-wise fashion. Essentially, if you look at the pattern of the consecutive numbers, it forms a spiral all the way from 1 to 81 with each spiral forming concentric squares/circles. While this has been depicted for just 81 squares, you can expand it to 144 squares and so on. See where the number 1 starts right at the centre and then gradually that pattern is followed all the way up to 81 where the 9X9 square ends. This is not a random chart but is the number system that is created through concentric squares. The above square is called the Gann square or the Gann Master Chart and is the basis of Gann based trading.
Let us first understand the concept of Gann and the logic behind the Gann indicators. However, Gann indicators have been used quite extensively in identifying opportunities in the stock markets, both at the index level and the stock level. Gann indicators are normally considered to be a lot more about mathematics and less about charts and technicals.