This trading strategy is a complex support and resistance trading strategy that uses diagonal support and resistance levels. Unlike the traditional horizontal support and resistance levels, the Gann fan angles are mathematically calculated based on the price, time and the price range of the market. Our team at Trading Strategy Guides has developed the best Gann fan trading strategy which can be applied to all markets because according to the Gann theory, financial markets move as a result of human behavior which makes them cyclical in nature.
In other words, history is a good predictor of future price action. One of the main reasons why Gann fan angles are superior to the horizontal support and resistance levels is that financial markets are geometric in their movements.
This means that if you can spot a pattern or or any other geometric shape in a chart, then there is a high probability you can spot them at the Gann fan angles. This indicator is notable unique because it draws diagonal support and resistance levels at different angles. Fibonacci Retracement Channel Trading Strategy. We have special Gann fan angles and more specifically Gann came up with 9 different angles see Figure Above.
For every Gann angle, there is a line that is derived from that angle. We can distinguish 4 different Gann angles above the degree angle and 4 other Gann angles below, as follows:. According to Gann theory, there are special angles that you can draw on a chart that will give you a good indicator of what price is going to do in the future. Many traders are used to draw Gann fan angles the wrong way which is why you need to pay closer attention to this section. You first need to draw a perfect degree angle and most sophisticated trading platforms should have incorporated such tools.
On the Tradingview platform, you can locate the Trend Angle tool on the left-hand side panel see Figure below. Next step is to select any major swing high or swing low on the chart from where you want to draw the Gann fan angles.
On this step you need to use the Gann Fan indicator which again is located on the left hand side panel see Figure below. Now, all you have to do is to simply place the Gann fan indicator on the chart and make sure it overlays on top of the degree line you previously have drawn. This is the correct way to draw the Gann fan angles and if you have been following all these steps all the other Gann fan angles should comply with the Gann rules.
Before we go any further, we always recommend writing down the trading rules on a piece of paper. How to use the Gann fan indicator?
Simply follow the instruction presented in the above sections. At this point, you can also get rid of the previous Gann fan angles drawn from the swing high. This will make sure your chart will not get cluttered and the price is still visible. One of the reasons why this is the best Gann fan strategy is because we use the Gann fan indicator to track every swing in the market.
At this point, your trade is opened, but we still need to determine where to place our protective stop loss and take profit orders, which brings us to the next step of best Gann fan trading strategy. We want to ride the new trend for as long as possible and with the help of the Gann fan indicator, we can pinpoint the ideal time to take profits. Use the same rules — but in reverse — for a sell trade. Simply follow the how to use the Gann fan indicator section to draw the Gann fan angles.
This is the best Gann fan strategy because unlike the traditional support and resistance lines the Gann angles can pinpoint significant changes in the market swing trends. We at Trading Strategy Guides have a clear understanding of what is really going on at these critical levels because we always make sure we backtesting our strategies so they have a positive expectancy.
If you want to gain a much clearer understanding of how support and resistance level really work we recommend having a look at our work here: Yes, you can find it here in the MT4 platform. Let us know how this strategy worked for you! Hey Lourens, what platform are you using? I am so Grateful that I found your blog! I read your blogs daily and improving my skill and knowledge daily! Thank you So much for these million dollar Knowledge! We can distinguish 4 different Gann angles above the degree angle and 4 other Gann angles below, as follows: Now, after we have our position opened, we need to do one more important thing: Next, will learn where to take profits: Conclusion This is the best Gann fan strategy because unlike the traditional support and resistance lines the Gann angles can pinpoint significant changes in the market swing trends.
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