What Are Gann Fans?
Gann fans are a form of technical analysis based on the idea that the market is geometric and cyclical in nature. A Gann fan consists of a series of lines called Gann angles. These angles are superimposed over a price chart to show potential support and resistance levels. The resulting image is supposed to help technical analysts predict price changes.
How it works?
The 45-degree line is known as the 1:1 line (Dashed black line on the chart) because the price will rise or fall at a 45-degree angle when the price moves up/down one unit for each unit of time.
In both an uptrend and a downtrend, the 1:1 line can help to detect a reversal. In a downtrend, a price that stays below the 1:1 line is considered bearish. In an uptrend, a price that stays above the 1:1 line is considered bullish. Thus the 1:1 line can serve as a resistance and support line.
Source: Investopedia
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Gann fans are a form of technical analysis based on the idea that the market is geometric and cyclical in nature. A Gann fan consists of a series of lines called Gann angles. These angles are superimposed over a price chart to show potential support and resistance levels. The resulting image is supposed to help technical analysts predict price changes.
How it works?
The 45-degree line is known as the 1:1 line (Dashed black line on the chart) because the price will rise or fall at a 45-degree angle when the price moves up/down one unit for each unit of time.
In both an uptrend and a downtrend, the 1:1 line can help to detect a reversal. In a downtrend, a price that stays below the 1:1 line is considered bearish. In an uptrend, a price that stays above the 1:1 line is considered bullish. Thus the 1:1 line can serve as a resistance and support line.
Source: Investopedia
Please like and share.
Thanks
