Trader Tip: Gann Grid Timing Ahh yes, timing is everything in the markets. Tools that can help us determine market timing are essential. Here may be an idea that is of interest to you – Gann Grid Timing. Gann Grid Timing is a “price pattern” indicator based upon Gann theory developed by William Delbert Gann. In this Trader Tip we shall discuss how to improve market timing through the use of Gann Grid lines.
By way of review, Gann Angles represents an intersecting series of Gann Lines overlaid on a price chart. Gann’s teachings stress the importance of the 45-degree line representing a 1:1 relationship between time and price (1 unit of price to 1 unit of time). The Gann Grid is a grid of lines that is used to help in indicating the trends and timing of a specific chart instrument. To see how these Gann lines are applied to a chart (MT4), click here.
Getting into the details of this concept, we first will want to set up the chart and apply a ZigZag indicator in order to help us understand the swing high/low points on the chart. Then we apply carefully the Gann Grid line indicator over the top of the last completed Target ZigZag leg line from its start to stop of this ZigZag line. The nice thing about the Gann Grid tool, is that it will take care of the angle calculations and any chart aspect ratio issues. With this, we can then see into the future the Gann angle points. These Gann angle points indicate potential reversal points that the market will turn, and it is here we can set up a more detailed Trade Plan to take advantage of this market timing. Note that most likely only the first two Gann Grid intersect lines will be useful for market timings, as the further in time the less applicable it will be to the original base Target ZigZag leg. Please see the aside thumbnail graphic to see this at work.
We have not discussed much about the actual Trade Plan, I will let you do this. Rather we are pointing out the Trade Plan set up to identify potential Trigger areas, where the further actual Trigger can be defined at a lower level, in conjunction with the other parts to the Trade Plan (i.e. Stops, Targets, etc…). In the example, we have used a 4-hour chart, with a ZigZag indicator set to a Depth of 12, Deviation of 5 and BackStep of 3. However, you may want to play around with these settings and time series to refine it further, when constructing your Trade Plan(s). Click here, or watch below a video presentation of this Trader Tip.
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