Methods and Applications of Gann Square

 

Gann Price Square

Cardinal Square is W.D. Gann's method to calculate market support and resistance levels. With base number 1 at the centre of the square, Cardinal Square starts from the left or right hand side and expands in clockwise or anti-clockwise fashion, each step increases the number by 1 and eventually comes with a Cardinal Square. The chart below is W. D. Gann's Square of Nine.

The support and resistance levels of the market in question are on the following angles in Price Cardinal Square. They are primarily:

  1. The horizontal line that drawn through the centre of Cardinal Square;

  2. The vertical line that drawn through the centre of Cardinal Square; and

  3. The two diagonal angles that drawn through the centre of Cardinal Square.

When we use the Cardinal Square to predict specific market support and resistance levels, two inputs have to be decided:

Firstly, the starting point of the market trend to be put into the centre of the Gann Square; and

Secondly, the unit of increase or decrease in each step.

The Gann Square function in the Gann Forecaster software provides easy calculation of the Gann Square.

 Chart 1 Cardinal Price Square

 

 

Working Example:

 

Suppose we are going to calculate the support and resistance of Hang Seng Index. The intermediate low of Hang Seng Index was 6,890 on 23 January, 1995. Using this data, we input the following:

  1. Market : Hang Seng Index

  2. Start : 6890

  3. Steps: +100

 

After the input, all figures in the Cardinal Square shall be changed to relevant price levels. The support and resistance levels of the market should be shown in RED colour, which are numbers on 45, 90, 135, 180, 225, 270, 315 and 360 degrees on the Square. The following diagram shows the results of the calculation:

 

Chart 2 Cardinal Price Square with Hang Seng Index

 

 

 The circled numbers are major resistance levels in Hang Seng Index. The corresponding daily chart of Hang Seng Index is shown below:


 Chart 3 Resistance Levels on Hang Seng Index Daily Chart (93 - 97)

 

 In regard to supports, major supports of Hang Seng Index are circled as below:


 Chart 4 Cardinal Price Square with Hang Seng Index

 

The corresponding daily chart of Hang Seng Index is as follows:


 Chart 5 Support Levels on Hang Seng Index Daily Chart (93 - 97)

 

 It is noted that in the same trend support and resistance levels tend to relate with each other by 0, 90, 180 or 270 degrees.