Gann Fans are technical analysis tools which were developed 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.
HOW TO USE IN TRADINGVIEW
- Navigate to https://www.tradingview.com/
- On the landing page, enter a symbol and click "Launch Chart"
- Drawing Tools are located along the left hand side of the chart. Select the Drawing Tool that you would like to add to your chart.
- You can access the Formatting Window by right clicking on the Drawing Tools in the chart itself and selecting "Format".
Can toggle the visibility of specific lines. Can also change their color, thickness and line style.
Can toggle the visibility of background colors as well as change their opacity.
Toggles visibility of labels.
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.
Allows to configure a drawing to be displayed on particular intraday and daily timeframes on chart. For all weekly and monthly timeframes you can select either to show it, or to hide.