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Gann Square of Nine - How To Trade Using This Forecasting Tool

The Gann square of nine is a forecasting tool created by trader W.D. Gann that uses geometry and numbers in a spiral pattern to identify potential support and resistance levels in markets. It works by squaring price and time, with numbers in the square representing points of vibration. Traders look to buy or sell at the nearest support or resistance levels indicated by the key numbers that fall along the cardinal and ordinal crosses of the square. While complex, some traders are attracted to its mystique and believe it may reveal hidden patterns despite its definitions originating in the 20th century.

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713 views7 pages

Gann Square of Nine - How To Trade Using This Forecasting Tool

The Gann square of nine is a forecasting tool created by trader W.D. Gann that uses geometry and numbers in a spiral pattern to identify potential support and resistance levels in markets. It works by squaring price and time, with numbers in the square representing points of vibration. Traders look to buy or sell at the nearest support or resistance levels indicated by the key numbers that fall along the cardinal and ordinal crosses of the square. While complex, some traders are attracted to its mystique and believe it may reveal hidden patterns despite its definitions originating in the 20th century.

Uploaded by

vp_choudhary
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Gann Square of Nine – How to

Trade Using This Forecasting


Tool

Gann

Who is Gann?
The trading concepts used by William Delbert Gann, or W.D.
Gann as he is fondly called, bring feelings of intrigue and
mystique.

He is primarily known for his market forecasting abilities,


such as the Gann square of nine which combine a mix of
geometry, astrology, and ancient math techniques. Gann started
trading at the age of 24 and was a religious man.

Gann was also a 33rd degree Freemason [1]


, to which some
attribute his knowledge of mathematics and ratios.

For the most p ar t, G a n n ’ s w or ks have been open to


interpretation. Therefore, to trade based on Gann’s methods
requires extensive practice and understanding.

Understanding Gann
Unlike trading with technical indicators where you can buy or
sell when some variables are met, trading with Gann’s methods
is not as straightforward. This is because learning the
methods takes time. You can’t just apply a few moving averages
to the chart and give it a go.

The other challenge is there are no clear Gann trading


strategy experts to learn from. So, why are traders still
holding on to techniques defined in the 20th century?

My take is that it’s so complex and hard to decipher, this


leads traders to believe there must be something there.

Among the many trading methods known to Gann, the square of


nine is quite popular.

What is the Gann Square?


Squares, circles, and triangles are the three most common
geometric shapes that form the basis for most of Gann’s work.

Gann’s wheels and squares are some of the most common


applications and form the cornerstone of Gann’s work.

For example, Square of nine, Square of 144 and the Hexagon are
some of the many works from Gann that are popular.
How to construct the Gann square

Square of Nine
The square of nine or Gann Square is a method which squares
price and time. The Gann square of nine gets its name because
if you look at the above chart again, the number 9 represents
the completion of the first square.

The square of 9 is a spiral of numbers with an initial value


“1” starting at the center. Starting from this value, the
number increases as we move in a spiral form and clockwise
direction. According to experts, each cell in Gann’s square of
nine represents a point of vibration.

How to Calculate the Square of Nine


The numbers within the Gann square of nine also follow a
certain harmonic pattern. For example, when you take a number,
such as 54 from the above square, the value to the next of it
(to the right), 29, is derived as follows:

The square root of the number and subtract 2, and re-square


the result.

Ex: 54 is the original number

The square root of 54 = 7.348469

7.348469-2 = 5.438469
(5.438469)2 = 29 rounded off

To determine the value to the left, instead of subtracting 2,


the number is added. So, we simply add +2 to the square root
of 54 (7.348469), bringing the value to 9.348469. We then
square this result to get a value of 87.

How does the Gann Square work?


The Gann square of nine helps to identify time and price
alignments in order to forecast prices.

In the Gann Square of nine, the key numbers of importance are


as follows:

0 or 360 degrees: 2, 11, 28, 53….


45 degrees: 3, 13, 31, 57, 91…
90 degrees: 4, 15, 34, 61, 96…
180 degrees: 6, 19, 40, 69…

Cardinal Cross and Ordinal Cross


The next sets of important numbers fall within the cardinal
cross and the ordinal cross.

The picture below shows the cardinal cross, represented in the


blue horizontal and vertical lines. The ordinal cross numbers
are represented in the yellow cells.

The numbers that fall in the cells represented by the cardinal


and ordinal cross are key support and resistance levels.

While both are important, the ordinal crosses are of less


significance and can be breached at times.
Gann Square – Cardinal and
Ordinal Cross

The most important numbers as we know it occurs every 45


degrees on nine chart.

Each degree is a representation of time.

Above is a standard 1×1 chart. As an example, if price made a


high of 54 on the day, if price retreats, the next support is
29, as it is the next closest number across the square of
nine.

Circle Around the Square


Also, drawing a circle connecting the four corners of the
squares brings the concept of angles into perspective. The
angles, measured by degrees can point to potential support and
resistance levels when the price is said to be moving within
an angle.

The chart below shows the Gann square of nine with the circle
plotted around it.
Gann Square of nine with the circle,
introducing angles and degrees

Using the Gann Square


To use the Gann chart, simply replace the starting number 1
with a number of your choice and the desired step value. In
the above example, the increment is 1, but you could use
larger or smaller values.

The resulting numbers in the ordinal and cardinal number cells


are key resistance and support levels.

Based on this information, traders can look to either buying


or selling into the nearest support or resistance level.

Gann’s square of nine also factors in planetary movements and


the degree of price movement based on the circle.

There is a big difference between forecasting prices and


trading. For example, one can forecast that the Emini S&P500
will rise to 2100 within a certain period of time. What the
forecasting won’t tell you is whether the move to 2100 will be
straight, or if the price will fall by a significant number of
points before rising to 2100 and so on.

These might seem insignificant when it comes to forecasting,


but they can be very things that can define a successful or a
bad trade.

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