CONCEPT 7 :: TWEAKING THE GANN FAN:: ANOTHER WAY TO ARRIVE AT THE PRICE
Every one of us has seen the Gann Grid, and will agree that it is a great tool.
Gann said to draw the 45 deg line, 22 and a half deg line, 67 and a half deg line.
However there is a problem.
These lines will show the magic only when the chart is correctly scaled and squared.
It's been a long time I am facing this problem" HOW TO DRAW A CORRECTLY SCALED
AND SQUARED CHART".
The definition of a Squared chart would be a chart were 1 unit of time shows movement
of 1 unit of price. To be honest I dont know how to draw a squared chart.
Following problems needs to be addressed.
1. If price has travelled 300 points in 20 days, will that be trading days or calender days.
here we see charts in trading days.
2. Say for e.g Nifty, what would be right the scale for one unit of time vis a vis price,
means one unit of price should consist of how many points.
3. How to arrive at this calculation.
If somebody can show me the Math, the calculation along with the chart I would be eternally grateful.
This posting is about Gann Fan and I am coming to the point now.
Consider two charts of Nifty, one is stretched, one is compressed.
NOW THE QUESTION IS HOW THE SAME SET OF ANGLES, AS SUGGESTED BY GANN, CAN FULLFILL BOTH THE CHARTS.
THE SOLUTION ::
I arrived at this observation accidentally when I was struggling ( by the way still struggling
) with the SQUARED CHART PROBLEM.
WHAT IF I USE THE GEOMETRY OF THE CHART ITSELF. For Every stock it will have its own degree of inclination or declination. People who use Median line Techniques will connect with this instantly.
WHAT IF I PREPARE THE GANN FAN BASED ON THE ANGLE A PARTICULAR STOCK ROSE OR FALL. To my amazement it gave a great picture of what price will face. A network of future support and resistance.
Check out the Gann Fan tweaked and derived from the angle of the swing.
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PS: Tweaking the things is one way, doing the things right way is another.
If somebody knows how to draw CORRECTLY SCALED AND SQUARED CHART, PLEASE
COME FORWARD WITH THE SOLUTION, IT WOULD BE A GREAT SERVICE TO THE
PEOPLE OF THIS GREAT FORUM.
PS.The second chart says same swing is considered for both the charts, which is not the case. Just one word " OOPS! "