Gann Fan is a technical analysis tool which was developed along with the Gann Square and Gann Box by the famous 20th century technical analyst W.D. Gann around 1935. A Gann Fan is comprised of a series of nine diagonal lines called Gann angles. These angles are drawn over a price chart, designed to show different support and resistance levels of a financial instrument.
Each Gann angle (which extends indefinitely) divides time and price into proportionate parts. The most noteworthy Gann angle is the 1x1 or the 45° angle. According to Gann the 1x1 angle represents one unit of price for one unit of time. The idea behind the 1x1 line is that it is a perfect 45° which ascends 1 point every 1 day. There are additional important angles such as the 2x1 (moving up two points per day), the 3x1, the 4x1, the 8x1, and the 16x1. All of these different Gann angle lines combine to create the Gann Fan.
Fans are typically drawn from changes in trend or reversal points such as tops or bottoms and are a good way to measure a market's trend or strength. During an uptrend, if price stays in the space above an ascending angle without breaking below it, the market is considered bullish. During a downtrend, if price remains below a descending angle without breaking above it, the market is considered bearish.
The angle that is above or below current prices determines the perceived relative strength or weakness of the market. For example, if the price is above the 2x1 the market has shown itself to be much more bullish than if it is above the 1x1. Gann believed that when an uptrending price reverses and breaks under an ascending angle, the tendency of the price is to go to the next nearest angle below it. The opposite is also true. When a downtrending price reverses and breaks up through a descending angle, the tendency of the price is to go to the next nearest angle above it.
When working with Gann's drawings, it is important to use the proper scale ratio, so that a unit of price would correspond a unit of time.
The simplest way to determine a scale for an unknown market is to take the difference between the main points: from top to top and from the bottom to the bottom. After that, it is necessary to divide the obtained value by the time spent by the market on moving from the top to the top or, respectively, from the bottom to the bottom.
In Style property dialog it is possible to change the appearance and configuration of a Gann Fan:
Checkboxes on the left toggle the visibility of additional lines of the Gann Fan. Toggles to the right of them set the lines' color, opacity, thickness and style.
Use this drop-down to select one color for all the lines and the background of the Gann Fan.
The checkbox toggles the visibility of the Gann Fan background and the slider beside adjusts its opacity.
Toggles visibility of the Gann Fan lines' marking text.
In Coordinates properties dialog you can set precisely the position of the Gann Fan's end points on the price scale (by setting the price) and the time scale (by setting the bar number):
Allows for the precise placement of the Gann Fan's first point (Price 1) using a bar number and price.
Allows for the precise placement of the Gann Fan's second point (Price 2) using a bar number and price.
In visibility properties dialog you can toggle displaying of the Gann Fan on charts of different timeframes.
Allows to configure a drawing to be displayed on particular intraday and daily timeframes on chart. For any timeframe you can select either to show it, or to hide.