Updated on March 20, 2023
The Gann Square is a technical analysis tool that is named after W.D. Gann who was a famous 20th-century trader and market analyst. The Gann Square is a grid model made up of horizontal and vertical lines. These lines divide a price chart into equal squares where each square represents a specific time period and price level. The grid helps traders to identify key support and resistance levels along with potential trend changes.
What is the basic assumption of the Gann Square Model?
W. D. Gann believed that the market moves mostly in predictable patterns These patterns could be identified by analyzing the relationships between key parameters like price, time, and trend. Gann Square is one of several tools that Gann developed which help traders to identify these patterns and make better informed trading decisions.
How to use Gann Square?
The Gann Square is used by traders to identify the key levels of support and resistance. This model is also used to identify potential trend changes. For example, a trader may look for a price to reach a specific square that indicates a possible trend change. This will help the traders to take suitable action accordingly. Moreover, the Gann Square can also be used to estimate future price levels which are based on the relationships between essential parameters of price, time, and trend.