Basics of Gann Analysis
We may also position the price of a significant trough at the center of the
square and have it revolve outward in standard counterclockwise and clockwise
fashion. As before, prices that intercept or are in proximity to the ordinal and car-
dinal crosses represent prices at which potential reactions or reversals may occur
in the commodity market.Gann’s square of nine: time projections
(Circle of time)
We may also replace the data within a Square of Nine to forecast when a potential
top or bottom is to be expected, instead of forecasting the potential price at which
a reversal occurs in the market. We can do this by positioning the date of a signifi-
cant peak or trough at the center of the square and have it revolve outward, in the
usual counterclockwise fashion, in an increasing manner. Dates that intercept or
are in proximity to the ordinal and cardinal crosses represent the dates at which
potential reversal may occur in the market.squaring of the Low and high
Besides squaring the range, Gann also introduced a couple of techniques called the
Squaring of the High and Squaring of the Low. These approaches attempt to fore-
cast potential market tops and bottoms via a very simple mathematical process.
Again, the practitioner should have had some experience calculating the scale or
trend rate of the market under observation before embarking on a campaign of
forecasting potential market tops and bottoms via the squaring of the high and
low values.
We may forecast potential tops and bottoms by squaring of the high as follows:■ (^) Locate a historic or significant peak in the commodity market.
■ (^) Calculate the scale or trend rate for the timeframe used.
■ (^) Divide the price at the peak by the trend rate.
■ (^) The resulting number represents the number of periods to the next potential
top or bottom.
For example, we have already found the trend rate of gold to be currently
around $2.20. Therefore to square the high, we divide the peak price with the
trend rate giving ($1920.92/$2.20) = 873 days to the next potential top or bottom
in the market, as measured from the date of the formation of the peak.
Squaring the low is identical to the squaring of the high except that we replace
the peak price with a historic or significant trough price to forecast potential tops
and bottoms in the market.
Comparing Gann, Dow theory, and fibonacci
retracement Levels
There are some similarities between Gann‐, Dow‐, and Fibonacci‐based retrace-
ment levels. There are a few Gann, Dow, and Fibonacci retracement levels that
are in proximity to each other, making these levels a significant zone for potential