What it means
Gann angles are straight lines drawn from a major high or low at fixed ratios of price to time. The 1×1 line rises one price unit per time unit; 2×1 rises two units per bar (steeper); 1×2 rises one unit every two bars (flatter). A set of these lines is a Gann fan.
The price unit per bar is a choice you make; the angles have no meaning without it.
Why traders use it
W. D. Gann taught that price and time are linked and that the 1×1 angle represents balance. While price holds above the 1×1, the trend is considered strong; a break below it suggests the next angle down may be tested.
Chart examples
Gann fan from a swing low
How to identify it objectively
- 1Pick a major swing low (or high) by a written rule.
- 2Fix the scale: how many price units equal one bar (for example 1 point per bar).
- 3Draw 1×1, 2×1 and 1×2 lines from the swing.
- 4Watch closes relative to the 1×1 line.
Bullish use
- 1Price holds above the 1×1: strong trend.
- 2Pullbacks to the 1×1 that hold are watched as entries.
Bearish use
- 1A close below the 1×1 weakens the trend.
- 2The 1×2 line becomes the next reference below.
What confirms it
- The line coincides with structure.
- Repeated reactions at the same angle.
What invalidates it
- Changing the scale until the lines fit past prices.
- Closes cutting through several angles without reaction.
How a hypothetical setup is built
Entry
On a pullback to the 1×1 that closes back up.
Stop
Below the 1×1 by a buffer, or below the pullback low.
Target
The prior high, then the 2×1 line if momentum increases.
A hypothetical illustration of how the concept is turned into a plan, not a recommendation. Practise it on a paper account first.
Related concepts
Historical testing
Not tested on The Tradeskill. Because the scale is chosen, any test must fix it in advance for every market.
Limitations: when it fails
- Angles change with the chart scale, which makes them partly arbitrary.
- Little published evidence supports them.
- Many lines make it easy to find a "reaction" after the fact.
Knowledge check
Pick an answer to see the explanation. Nothing is saved.