Square of 9 from WD Gann is an unconventional method in Technical analysis which uses angular and geometric relationships among numbers to predict the stock moves. This is a very popular method among intraday traders owing to its accuracy in equities as well as commodities. The square of 9 is actually a spiral or wheel of numbers. The center of the square contains the initial value which is increased clockwise in spiral form. Each number in the square represents an angle relative to the center. In this post, we would understand in detail how to use Gann square of 9 Calculator for intraday trading. There is an excel sheet attached with the post which would help you to calculate support and resistance levels based on Gann theory.
Fine some of our very popular Excel based trading systems in the below link:
History of Gann Square
At one point in his trading career, W.D.Gann took three year’s leave to go to the U.K to study the past history of selling prices of Wheat. During his meticulous studies, he developed some very powerful and innovative techniques, none more so than his use of the tool we call the Square of 9. Gann closely guarded his secrets whilst he was alive, but almost certainly the Square of 9 calculations was pivotal in his trading methods. The Square of 9 was not created by Gann. He actually found it inscribed in a temple in India and on the walls of the Great pyramid in Egypt, but he was certainly the first trader to recognize its importance and relevance in market trading.
Gann held a trading record which has been unsurpassed by anyone since. In front of a customs inspector he turned $130 into $12,000 in less than 1 month. Again, in the presence of an independent witness, he made 286 trades, 264 winners and 22 were losses.
Intraday Trading using Gann square of 9 Calculator
Gann square of 9 calculator is used to generate support and resistance levels for intraday trading. Breakouts of thee levels would be used to enter trade. The support/resistance levels are generated using the values in Gann square. In order to generate these levels, we need to input the latest trade price or weighed average price in Gann calculator (attached with the post) . LTP should be taken after at least half an hour of trade for better results , as there is lot of volatility in market during the first 30 minutes. Once you input this price the Gann levels would be automatically generated. See below:
Also, the buy/sell price and respective targets would be generated in the Excel sheet. In this particular example, we need to enter buy if the price crosses above 8418.06 and enter short if price crosses below 8395.14.
Lastly there are support resistance levels based on which targets are calculated above:
How Gann values are calculated?
Every value in the Gann square is related to the center value. Below are the steps used to calculate these values:
- Calculate the square root of LTP. Let’s suppose LTP=8400, then SQRT(8400)=91.65
- Take two integers below and above the square root calculated. In this case they would be 90,91,92 and 93.
- Square the lowest values out of the 4 calculated above. SQR(90)=8100. Put this value at the center of Gann square.
- Now, increase 90 by 45 degrees. In numeric terms 45 degrees is equal to 0.125 (360 degree=1). So our required value is 90.125.
- Calculate square of 90.125, and place it in adjacent block left of center block. SQR(90.125)=8122.52.
- Increase the value further by 45 degrees. 90.125+0.125=90.25. Find out square of this value and place it at the top of where you placed 8122.52. SQR(90.25)=8145.06
- Continue this process by increasing the value by 0.125 for each iteration.
- Once you complete one level of square, start with the next level with values 91.125,91.25….
Resistance values are the next higher values in the Gann square above the Buy Price. While support values are the next lower values in the Gann square below Sell price. Targets are calculated based on support and resistance.
Download link for Gann square of 9 calculator
Please see the below link to download Gann square of 9 calculator Excel Sheet. You simply need to input the current market price and the excel sheet would do rest of calculation itself. Please let us know if you have any queries. Also, send us your feedback on how to improve this sheet.
Whether you’re a first-time stock investor or a seasoned veteran, you should understand what differentiates single stock investments from mutual fund investing. Picture a collection of stocks, bonds, or other securities that are purchased by a group of investors and then managed by an investment company. That’s a mutual fund. When you buy shares in a fund, you’re really buying a piece of a large, diverse portfolio. Conversely, stocks are shares of a single company.
ReplyDeleteFinance with Gerald Dewes