Trading Using Gann Lines

Gann lines is one widely used and simple indicator for finding support and resistance levels, and to analyze trend strengths and to predict trend reversals. Gann lines are derived from Gann angles; in fact almost all Gann applications like Gann fans and Gann grids are derived from Gann angles. Know more about Gann angles.

Gann lines are the lines drawn on charts with a 45 degree angle; the most important of all Gann angles. This is also called as ‘One to One Line’ (1 x 1) as it represents one unit increase or decrease in price with every unit time. Gann lines are long term trend lines which are created by defining two points on charts; two highs or two lows that fall in (or near) 45 degree angle.

With Gann lines a strong uptrend is realized when prices are above an ascending Gann line. In this case the line serves as a strong support for the trend and its reliability increase with the number of price lows touching the lines. A strong downtrend is realized when prices are below a descending Gann line. In these bearish trends the line serves as a strong resistance level and the reliability increase with the number of times the price touches it and bounce back.

Trend reversal or trend weakening is predicted when the price intersects the Gann lines. Trend changes are also expected at areas where Gann lines meet Fibonacci levels.

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