Gann Angles

Gann angles are a form of technical analysis originally developed by W. D. Gann (1878-1955).  This is a primitive system which predates modern computers and is easy to perform by hand.

Gann lines are drawn from a specific position on a stock chart using simple angles, like 1:1 (45°), 1:2 (63.75°), 1:4 (75°), 1:8 (82.5°), etc.  Because these all use whole numbers, they can easily be drawn on graph paper without even using a protractor.

The Trade-Ideas alerts server uses powerful computers to implement more modern theories.  Most notably, there are no fixed grids.  There are no fixed relationships between price and time.  In our models, the time axis of the graph is often adjusted based on relative volume.  The price axis is adjusted based on volatility.  That is to say, price changes in each stock are scaled based on previous movements in the same stock.

More importantly, the alerts server avoids straight lines, especially diagonal lines.  Instead we focus on the Black-Scholes and similar models.  These use advanced statistical analysis to make non-linear predictions.

This type of analysis is most visible in the running up and running down alerts.  Like with Gann analysis, we start with a particular point on a stock chart, and look for unusually deviations from the expected path of the stock price.  Price fluctuations within the expected range are written off as noise.  When the graph moves outside of the expected range, we report an alert.  The difference is that don’t use the same angles for each stock, and we don’t use straight lines.  Moving up at a 45° angle might be normal for one stock, but unusual for another.  More importantly, it might not be unusual for a stock to move up at 45° for two hours, but very unusual for the same stock to maintain the same angle for two days.

Alert Types

We offer the following alert types which are related to this topic.  Click on the icon for a detailed description of the alert, or click on the example link for additional samples of each type of alert.