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Gann Fans

Candlefocus Editor
Gann Fans is an analysis technique devised by the eponymous early market technician W. D. Gann which is used to observe potential support and resistance angles on market charts. It consists of a series of lines drawn across a chart which originate at a low or high pivot point and then extend out into the future. He deemed the 45-degree line to be of most importance since it is a perfect angle of correction, marked as the point where support and resistance cycles would be most likely to appear.

Different traders will have their own favorite angles, with the most commonly used being Gann’s 45-degree angle, 82.5, 75, 71.25, 63.75, 26.25, 18.75, 15, and 7.5 degrees. Traders will also use the Gann fans to visualise areas of future support and resistance. Technical traders will compare the Gann fan lines on a chart with existing price movements to try to identify possible support and resistance lines.

If the price is trending up, traders will believe that the price will reach the line of resistance at the next linear Gann fan angle. On the opposite side, if the price is falling, traders will expect the price to reach lower support levels at the next Gann angle. When a price reaches the Gann fan line, traders will often use it to set a potential profit target.

Overall the Gann Fan analysis method helps to introduce new ways of analyzing the market in technical analysis and provides a useful tool to take into consideration when trading. By combining Gann Fan technique with other methods of technical analysis such as candle patterns, indicators or chart patterns, traders can increase chances of success in their trades.

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