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PRICE ANGLES.pdf - PRICE ANGLES - GANN VS GEOMETRIC GERALD...

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PAGE111/1/01PRICE ANGLES - GANNVSGEOMETRICGERALDMARISCHINTRODUCTIONWilliam Delbert (W.D.) Gann was an early 20th-century trader.His proprietarydaily trading methods used many inputs, such as those for mathematics, astrology,astronomy and seasonal changes.Rumors abound about the relative success -or failure - of Gann.Legions of literaryworks (including my own °Gann± book) have been written about this legendarytrader and his techniques.Teaching Gann trading methods has spawned a closetindustry.An all-inclusive review of his methods is certainly beyond this article.Whatcanbe introduced and reviewed here is the basis for Gann²s techniques, calledGANN ANGLES, and a common error of equating them to Geometric Angles.WHAT ARE GANN ANGLES?Trend lines have probably been the basis of technical analysis since technical analysisbegan.A very basic trend line usually connects two or three lows in a BULL marketor two or three highs in a BEAR market.Prices °violating± these lines (going beyondthese trending limits) suggests a change in the price²s trend direction.Gann expanded the trend-line concept by asserting that TWO factors - priceandtime- are needed to establish a truer °trend line± for a specific market.Pricerise±)is only the first factor for defining a market²s trend line.Thesecond factoris thetime neededrun±) for prices to rise or fall.AGANN ANGLEis a °trend line± thatreflects the number of °price units± which trend during a °unit of time±.A Gann Angle is indicated by the mathematical-ratio expression of the °number ofprice units trending up or down (rise)± by the °rate of time needed for the ³rise²(run)±.An example of a Gann Angle in this format is1x1.A 1x1 indicates that prices arerising or falling by 1 °unit± of price in 1 °unit± oftime.The next °steeper± Gann Angle is a 2x1; price is rising attwicethe rate but inthesame amount of timeas a 1x1 Gann Angle.After a 2x1, the most-commonly usedGann Angles are the 4x1 and 8x1; in rarer occasions there can be a 3x1 and 16x1.

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Term
Spring
Professor
N/A
Tags
Euclidean geometry, Line segment

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