Gann’s Method 34 intraday trading techniques

The days low nifty future has hit is 2789 and high
is 2985 which is very close to the resistance and
supports we have calculated.

How to enter a trade? In this I will not follow the

mid point logic. I will enter the short trade if the
2nd support is broken and vice versa. In the above
example I will buy nifty future above 2958 for target
2995 and stop loss 2927. Same way I will sell nifty
at 2938 for stop loss 2951 for target 2919

9. Green angle trading technique:

As per Gann method the 2/1 angle is called green

angle and the 1/2 angle is called the red angle. The
degree notation is 2/1 angle is 26.25 degrees and
1/2 angle is 63.75 degrees. The sum total of 2/1
and 1/2 is 90 degrees.
In this green angle terminology from any swing
point you can derive the resistance and support. If
the price trade above the swing turning point then
buy it or else sell.Consider nifty price at 1 p.m. , the
swing turning point is 2937. The green angel price

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Gann’s Method 34 intraday trading techniques
is derived as (Square root (2937) + 26.25 degree
factor) 2 =2953
The red angle price is derived as (Square root (2937)
- 63.75 degree factor) 2 =2898
Now based on this assumption I will buy Nifty
future at 2953 with stop loss 2937 or sell nifty below
2898 with stop loss 2937.
For the buy trade target will be (Square root (2953)
+ 26.25 degree factor) 2 =2969
For the sell trade target will be (Square root (2898)
– 63.75 degree factor) 2 =2860

In this method the entry point is being determined

from one price point.

At around 1:10 p.m I got he nifty future at 2953

and enter the buy trade at 1:30 p.m I got the target
achieved. As you will observe from the chart at
around 1:32 p.m after touching the high of 2972
nifty started falling .

Timing the trade? In this method you can time

the trade.The price point of my observation 2937

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Gann’s Method 34 intraday trading techniques
is a price point from 12:30 p.m to 1.05 p.m.
where I got maximum volume get transacted.
Hence in 35 minute of time unit I got this swing
point.
Since my entry and exit points are being derived
from the same swing point, I will achieve the target
after 35 minutes starting from 1.05 p.m. which
work out to 1:40 p.m. . Same has happened in the
price chart at around 1:30 p.m this trend started
reversing refer the below chart for details.

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Gann’s Method 34 intraday trading techniques
10. Triangle turning point trading technique:

Triangle is an important geometrical figure. The

sum of the internal angles of a triangle is 180
degree.

The triangle can divide the circle into 3 parts each

of 120 degrees. A hexagon can be split in to six
triangles. In this method we will take all the prices
falling on the sides of the triangle will act as a
resistance and support.
Take the case of a hexagonal spiral on natural
numbers. As given below

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Gann’s Method 34 intraday trading techniques
In this 1&2, 8&10, 21&24,41&44 forms the
triangle in the hexagonal chart.

In the real time price chart you need to identify

one swing turning points and in each 15 degree
offset create the new number in the series and the
1st, 8th, 21st and 41 number generated from the swing
point will form one side of the triangle and second
side will be constructed by the 2nd, 10th ,24th and
44th numbers in the series. Once the triangle is
constructed the trade decision will be made at 2nd
price point for 8th price point as target and so on.
Triangle is being specified as the TRIAN by Gann.
The triangle exists in the entire Gann chart. It is
one of the most important Gann patterns for making
the trade decision.

In order to simplify this method I will establish

angle relation. In hexagon chart prices projected
60 degree from the swing point is a trian point,since
the triangles bisect the internal angles of the
hexagon at 60 degrees. The stock or commodity
price is dynamic in nature hence we never know at

185
Gann’s Method 34 intraday trading techniques
one point of time the price will be on the hexagon
chart. However we need to derive the prices which
TRIANS the swing price.

Example: Take the swing high price of nifty as

2973 at 1:30 p.m. on 12 th November 2008.
Assuming this point as the initial point of the
TRIAN we will derive the other TRIAN point
which is 60 degree from the initial swing point.
U p p e r T r ia n g le p o in t s d e r iv e d fr o m 2 9 7 3
2 9 7 3 5 4 .5 2 5 2 2 5 4 .8 5 8 5 2 3 0 0 9 .4 5 7 6 0 3
3 0 0 9 .4 5 8 5 4 .8 5 8 5 2 5 5 .1 9 1 8 2 3 0 4 6 .1 3 7 3 8 4
3 0 4 6 .1 3 7 5 5 .1 9 1 8 2 5 5 .5 2 5 1 2 3 0 8 3 .0 3 9 3 4 2
3 0 8 3 .0 3 9 5 5 .5 2 5 1 2 5 5 .8 5 8 4 2 3 1 2 0 .1 6 3 4 7 8
3 1 2 0 .1 6 3 5 5 .8 5 8 4 2 5 6 .1 9 1 7 2 3 1 5 7 .5 0 9 7 9 2
3 1 5 7 .5 1 5 6 .1 9 1 7 2 5 6 .5 2 5 0 2 3 1 9 5 .0 7 8 2 8 4
3 1 9 5 .0 7 8 5 6 .5 2 5 0 2 5 6 .8 5 8 3 2 3 2 3 2 .8 6 8 9 5 4
3 2 3 2 .8 6 9 5 6 .8 5 8 3 2 5 7 .1 9 1 6 2 3 2 7 0 .8 8 1 8 0 1
3 2 7 0 .8 8 2 5 7 .1 9 1 6 2 5 7 .5 2 4 9 2 3 3 0 9 .1 1 6 8 2 6
3 3 0 9 .1 1 7 5 7 .5 2 4 9 2 5 7 .8 5 8 2 2 3 3 4 7 .5 7 4 0 2 9
3 3 4 7 .5 7 4 5 7 .8 5 8 2 2 5 8 .1 9 1 5 2 3 3 8 6 .2 5 3 4 1
3 3 8 6 .2 5 3 5 8 .1 9 1 5 2 5 8 .5 2 4 8 2 3 4 2 5 .1 5 4 9 6 8
3 4 2 5 .1 5 5 5 8 .5 2 4 8 2 5 8 .8 5 8 1 2 3 4 6 4 .2 7 8 7 0 4
3 4 6 4 .2 7 9 5 8 .8 5 8 1 2 5 9 .1 9 1 4 2 3 5 0 3 .6 2 4 6 1 8
3 5 0 3 .6 2 5 5 9 .1 9 1 4 2 5 9 .5 2 4 7 2 3 5 4 3 .1 9 2 7 1
3 5 4 3 .1 9 3 5 9 .5 2 4 7 2 5 9 .8 5 8 0 2 3 5 8 2 .9 8 2 9 8
3 5 8 2 .9 8 3 5 9 .8 5 8 0 2 6 0 .1 9 1 3 2 3 6 2 2 .9 9 5 4 2 7
3 6 2 2 .9 9 5 6 0 .1 9 1 3 2 6 0 .5 2 4 6 2 3 6 6 3 .2 3 0 0 5 2
3 6 6 3 .2 3 6 0 .5 2 4 6 2 6 0 .8 5 7 9 2 3 7 0 3 .6 8 6 8 5 5
3 7 0 3 .6 8 7 6 0 .8 5 7 9 2 6 1 .1 9 1 2 2 3 7 4 4 .3 6 5 8 3 6

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Gann’s Method 34 intraday trading techniques

L ow e r T r ian g le po in ts d e r i ve d f r o m 2 9 7 3
2 9 7 3 5 4 .5 2 5 2 2 5 4 .1 9 1 8 9 2 9 3 6 .7 6 1 3 2 3
2 9 3 6 .7 6 1 5 4 .1 9 1 8 9 5 3 .8 5 8 5 6 2 9 0 0 .7 4 4 8 6 5
2 9 0 0 .7 4 5 5 3 .8 5 8 5 6 5 3 .5 2 5 2 3 2 8 6 4 .9 5 0 6 2 3
2 8 6 4 .9 5 1 5 3 .5 2 5 2 3 5 3 .1 9 1 9 2 8 2 9 .3 7 8 6
2 8 2 9 .3 7 9 5 3 .1 9 1 9 5 2 .8 5 8 5 7 2 7 9 4 .0 2 8 7 9 5
2 7 9 4 .0 2 9 5 2 .8 5 8 5 7 5 2 .5 2 5 2 4 2 7 5 8 .9 0 1 2 0 7
2 7 5 8 .9 0 1 5 2 .5 2 5 2 4 5 2 .1 9 1 9 1 2 7 2 3 .9 9 5 8 3 7
2 7 2 3 .9 9 6 5 2 .1 9 1 9 1 5 1 .8 5 8 5 8 2 6 8 9 .3 1 2 6 8 5
2 6 8 9 .3 1 3 5 1 .8 5 8 5 8 5 1 .5 2 5 2 5 2 6 5 4 .8 5 1 7 5
2 6 5 4 .8 5 2 5 1 .5 2 5 2 5 5 1 .1 9 1 9 2 2 6 2 0 .6 1 3 0 3 4
2 6 2 0 .6 1 3 5 1 .1 9 1 9 2 5 0 .8 5 8 5 9 2 5 8 6 .5 9 6 5 3 5
2 5 8 6 .5 9 7 5 0 .8 5 8 5 9 5 0 .5 2 5 2 6 2 5 5 2 .8 0 2 2 5 4
2 5 5 2 .8 0 2 5 0 .5 2 5 2 6 5 0 .1 9 1 9 3 2 5 1 9 .2 3 0 1 9 1
2 5 1 9 .2 3 5 0 .1 9 1 9 3 4 9 .8 5 8 6 2 4 8 5 .8 8 0 3 4 5
2 4 8 5 .8 8 4 9 .8 5 8 6 4 9 .5 2 5 2 7 2 4 5 2 .7 5 2 7 1 7
2 4 5 2 .7 5 3 4 9 .5 2 5 2 7 4 9 .1 9 1 9 4 2 4 1 9 .8 4 7 3 0 7
2 4 1 9 .8 4 7 4 9 .1 9 1 9 4 4 8 .8 5 8 6 1 2 3 8 7 .1 6 4 1 1 5
2 3 8 7 .1 6 4 4 8 .8 5 8 6 1 4 8 .5 2 5 2 8 2 3 5 4 .7 0 3 1 4 1
2 3 5 4 .7 0 3 4 8 .5 2 5 2 8 4 8 .1 9 1 9 5 2 3 2 2 .4 6 4 3 8 4
2 3 2 2 .4 6 4 4 8 .1 9 1 9 5 4 7 .8 5 8 6 2 2 2 9 0 .4 4 7 8 4 5
2 2 9 0 .4 4 8 4 7 .8 5 8 6 2 4 7 .5 2 5 2 9 2 2 5 8 .6 5 3 5 2 4
2 2 5 8 .6 5 4 4 7 .5 2 5 2 9 4 7 .1 9 1 9 6 2 2 2 7 .0 8 1 4 2 1
2 2 2 7 .0 8 1 4 7 .1 9 1 9 6 4 6 .8 5 8 6 3 2 1 9 5 .7 3 1 5 3 5
2 1 9 5 .7 3 2 4 6 .8 5 8 6 3 4 6 .5 2 5 3 2 1 6 4 .6 0 3 8 6 8
2 1 6 4 .6 0 4 4 6 .5 2 5 3 4 6 .1 9 1 9 7 2 1 3 3 .6 9 8 4 1 8
2 1 3 3 .6 9 8 4 6 .1 9 1 9 7 4 5 .8 5 8 6 4 2 1 0 3 .0 1 5 1 8 6

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Gann’s Method 34 intraday trading techniques
In intraday it is difficult for the stock to complete
more than 5 spirals. In rarest occasion the stock
used to complete the sixth spiral.

From the above data I will buy nifty future above

3009.50 for target 3946.13 or else I will sell nifty
future at 2937 for target 2900. In both the cases
my stop loss will be 2973.

If you will observe the intraday price time chart

you will find all the calculated targets in the down
side has provided to be the very short term support.

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Gann’s Method 34 intraday trading techniques
11. Mid point trading technique:

In a day the stock prices can be recorded as the

open, close high and low. In rarest occasion all the
prices used to be same. In mid point trading
technique as per the Gann’s method if the current
price is below the mid point of the high and low of
the trend then we can say the price trend is in down
side direction and vice versa.

Mid point method in intraday is only for the highly

speculative intraday traders. In this method identify
the swing high and swing low of any prior trend.
Find the mid point of this swing action. Compare
the current price with the mid point to identify the
trend.

Once the trend is identified find the trend

termination point which is 360 degree price range
derived from the mid point and high or low. Entry
must be made at 45 degree angle price point.

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Gann’s Method 34 intraday trading techniques

Example: Nifty future swing low was 2863 and

high was 2958 at 10:50 a.m. finding the trade
initiation points.

The mid point is 2863+2958 =2910.5.

Say the current Nifty future at 11:30a.m is 2937

this signifies the trend is up.

From mid point to high 2958 the price range is Rs

48/-.
Applying 360 degree factor on the Rs 48/- we will
get Rs80/- as the termination price range.

The termination price will be 2910.5+80=2990.50

The entry can be made at the current price. But the
target can be derived using the mid point logic. For
this up move my

1st target will (2958+2910.5)/2= 2934

2nd target will be (2990.5+2958)/2=2974.25
3rd target will be (2974.25+2990.5)/2=2982.37 etc
The stop loss for this move will be 2910.5
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Gann’s Method 34 intraday trading techniques
12. Trading using the Gann angles
Gann has specified 11 different angle relations like
1/16,1/8,1/4,1/3,1/2,1/1,2/1,3/1,4/1,8/1,16/1 which
I have already explained in the 2nd chapter. These
angles are being derived from the price and time
components. If one unit change in price brings one
unit change in time then we can say it is 1/1 angle.

In this method take the price range and the time

and derive the relation such as the price change and
the time proportionate change. If the price and time
change relates to any of the angle relation then take
the degree equivalent or the retracement level for
the future price and time projection.

Example: Nifty future swing low was 2863 and

high was 2958 at 10:50 a.m. finding the trade
initiation points based on the gann angle. The price
range is 2958-2863 =Rs 95/-. The time between
these two swing points are 45 minuets. Hence it
establish 2/1 angle relation. Hence the price and
time will square with each other at 26.25

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Gann’s Method 34 intraday trading techniques
angle relation in each 45 minutes time interval.

The termination points for this action will be

2958+95= 3053 or 2863-95=2768

In between this range in each 26.25 degree it will

find the resistance and support derived from these
two swing points.

Resistance

2863 53.50701 53.65281 2878.6239

2878.6 53.65281 53.79861 2894.2903
2894.3 53.79861 53.94441 2909.9993
2910 53.94441 54.09021 2925.751
2925.8 54.09021 54.23601 2941.545
2941.5 54.23601 54.38181 2957.381
2957.4 54.38181 54.52761 2973.2601
2973.3 54.52761 54.67341 2989.1816
2989.2 54.67341 54.81921 3005.1457
3005.1 54.81921 54.96501 3021.1522
3021.2 54.96501 55.11081 3037.2013
3037.2 55.11081 55.25661 3053.2928

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Gann’s Method 34 intraday trading techniques
Support

2958 54.388 54.242 2942.2

2942.2 54.242 54.096 2926.4
2926.4 54.096 53.95 2910.6
2910.6 53.95 53.804 2894.9
2894.9 53.804 53.659 2879.2
2879.2 53.659 53.513 2863.6
2863.6 53.513 53.367 2848
2848 53.367 53.221 2832.5
2832.5 53.221 53.075 2817
2817 53.075 52.93 2801.5
2801.5 52.93 52.784 2786.1
2786.1 52.784 52.638 2770.7

If the current price is 2925 then it is above my mid

point of the swing high and low and I will make an
entry buy entry for target of 2941-2957-2973.In
this case also I will take the mid point as my stop
loss.

As per my experience the mid point stop loss proves

to be very successful
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Gann’s Method 34 intraday trading techniques
13. Price range and time squaring technique

In the October 08 crash we made a low 2207.30 in

the nifty future on 27th October 2008 and in
November 5th 2008 we made intraday opening high
of 3298.90 on nifty future.

The price range for this low to high is = 3298.90-

2207.30=1091.60

The time elapsed in this high and low range is 8

trading days and 10 calendar days.

Converting the above information into degrees I got

1092 as 323,8 trading days as 284 and 10 calendar
days are 344 degrees. This shows that the price and
time are not squaring. In my book on ‘‘Gann’s
method’’ in chapter -4 as I have described price
and time are the dynamic quantities.Hence
considering it as a static entry is not a fair analysis.
Gann has also considered price and time as an
energy packet.Hence it must not be static.

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Gann’s Method 34 intraday trading techniques
Then at this junction I may have left the squaring
phenomenon way behind which I have to hunt now.
Since I have taken the trading days, calendar days
which cannot and must not be altered because it is
less dynamic than the price. Then the option left in
my hand is to hunt for a new swing high and low
point which will be squaring with any one of the
day counts. Now my focus has gone to the 3285
which is also a swing high point on the 5th November
2008 price chart. Now taking the high as 3285 and
low as 2207 my new price range is 1078. The
degree conversion is 285 degree. Hence 8 trading
days is squaring with the price range with an error
fact of 1 degree which is very much accepted.

Now considering the past squaring has happened

in the 2207 to 3285 we need to find the price range
for the new square.
N(R)= (Square root of (1078)+ degree factor (285) )2
= (32.8329 + 1.5829 )2 =1184.449
Round it to 1185, now as per this method we will
have a price range of 1185 in the coming 8 trading
days starting from the 6th November 2008.
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Gann’s Method 34 intraday trading techniques
Hence in each time unit 148.125 (i.e 1185/8)) act
as a resistance and support calculated from high and
low.
Now supports calculated from the swing high 3285
are
a. 3285-148.125 = 3137
b. 3137-148.125=2989
c. 2989-148.125=2841
d. 2891-148.125=2693
e. 2693-148.125=2545
f. 2545-148.125=2397
g. 2397-148.125=2249
h. 2249-148.125=2101

Resistances calculated from the swing low of 2207

are : 2355, 2503.25, 2651.37, 2799.5, 2947.625,
3095.75, 3244, and 3392.

Now the conclusion will go as follows. On the first

day starting from November 6, 2008 I will have
resistance at 3392 and support at 3137. I will
consider the index is in up move if it maintains above
3264.5. Which is the mid point of (3392, 3137).
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Gann’s Method 34 intraday trading techniques
If it trades below 3264.5 then I will consider the
nifty is in down move.

But in the real case nifty future closed at 2991.65

on 5th November. This is just above my second level
of support 2989.

Hence for 6th November my calculation point will

be (3244, 2989). I will be bullish on index if it opens
and trades above 3116.5 which is the mid point of
my calculated resistance and support. If it trades
below that then I will be bearish. From the opening
data on 6th November 08 till 1 p.m I got nifty opened
at 2898 and made high of 2953.

Hence I can conclude that the current price is at my

4th level of resistance support, this is (2947.625,
2841). However these resistance and support points
will be effective for the 8 trading session starting
from the 6th November 2008.

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Gann’s Method 34 intraday trading techniques

You have already experienced the closing on the 5th

November 2008 which is very much inline with the
2nd level of support point calculated. The 6th
November high also inline with the 4th level of
resistances calculated from the low. Other data you
can validate as and when it will happen in the chart.
Since I have prepared this literature on 6th November
I do not have forthcoming data for validation.

The second most important thing this method

explains is on the 17th November 2008 (this is 8
trading days counting from 6th November) where
will be the nifty. Since I found the current price
moves 3 step ahead of time then the Monte Carlo
simulation process can help me to find the most
likely price forecast of the price. Since this subject
is out of scope of this discussion I can give the
predictive conclusion as i have a 70 % chance to
get 2397 level and 60% chance to touch 3244 level
by 17th of November 2008.

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Gann’s Method 34 intraday trading techniques

14. Retracement: Retracement technique is being

derived from the Fibonacci technique. Retracement
is of two types

a. Growth retracement: If the previous trend is

down and the current trend is down then it is called
decay retracement

b. Decay retracement : If the previous trend is up

and the current trend is down then it is called decay
retracement

Both the retracement is against the previous trend.

Previous trend is an ambiguous term which is
difficult to explain. However for intraday purpose
take the previous trend as one hour’s trend. In a
range bound market it is difficult to identify the
trend. Henceforth try to avoid retracement
technique.

The retracement levels or the support/resistance

levels is being taken from the Fibonacci method
wherein the support and resistance points are
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Gann’s Method 34 intraday trading techniques
being calculated by the help of fibonaci ratio.
Fibonacci ratios are 0.236,0.382,0.5,0.618,0.786 .

Take the nifty future 12th November 2008 price at

1:40 p.m which was 2957 . The previous one hour
trend was a up trend and the retracement has started
from high 2973 the low corresponding to this high
is 2932. Hence it is defined as a decay retracement
and we will draw the supports from the high of
2973. 0.236 2963.3
0.382 2957.3
0.5 2952.5
0.618 2947.7
0.786 2940.8

In this retracement table if the price falls below

2947 then there is little chance that the price will
bounce back from this level. This level of 0.618 is
called death zone for the long traders.

How to make a trade decision?

In this decay retracement sell nifty future below
2947 with stop loss 2963 and target 2906. 2906 is
the 1.618 or phi target level for this move.
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Gann’s Method 34intraday trading techniques
15. Parallel projection:

Parallel projection is a retracement within a

retracement. It is always better to draw the
retracement line in each new swing point in order
to identify the supports and resistances. The rest of
the procedures are same as the retracement.

16. Trading with clusters:

Fibonacci cluster is a culmination of Fibonacci

retracement from various significant highs and lows
during a given time period.
In other words I can say if you will draw two or
more retracement lines in a closely related swing
high and low prices then you will find one particular
price which will occur in every retracement. It is
practically impossible to find the cluster in the chart.
However by taking the help of median and mode
function you will be in a position to find out the
cluster. We have provided the cluster calculator in
our web site www.smartfinancein.com

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Gann’s Method 34 intraday trading techniques

In order to use the Fibonacci cluster you need to

provide three swing high and swing low price points
as input to the calculator. Cluster will determine
the most important support and resistance for current
price movement. While choosing the inputs in the
intraday price chart take last one hour’s three
different swing highs and swing lows. Last one
hour’s three consecutive swing high and swing low
you need to take for next day calculation. You can
also take any three important swing highs and lows
of the day to find the next days most sensitive
support points.

Example: On 12th November 2008 in nifty intraday

chart I have identified the
a. 2866 , 2956 b.2915,2985 c.2795,2868
are the three pairs of swing highs and lows.

Applying this on the calculator I got cluster support

at 2900 and resistance at 3002. Now for the trading
day November 13 these two prices will act as the
support and resistance.

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Gann’s Method 34 intraday trading techniques
How to initiate trade using the cluster?

1. Follow the method explained in the midpoint

trading technique to make a trade decision.
2. Using these two points as the swing high and
low in the Fibonacci retracement method make the
trade decision.
3. Using these two prices as the swing high and
low in the Gann calculator also you can take the
trade decision.
17. Bat pattern:

This pattern is being developed by Scott Carney

in 2001. It is of two types . Bullish & bearish bat
pattern.This pattern is represented below.
Bullish Bearish

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Gann’s Method 34 intraday trading techniques
As you have seen from the above picture these
patterns can be constructed by using 5 price points.
These price points associated with each other
through some Fibonacci ratio price relationship.
By taking any price point ‘X’ -‘A’ you can derive
the price point B, C, D.

Once you have identified the five price points

compare it with the current price. The current price
will suggest you in which phase the price is in.
Either it is in the growth retracement phase or in
the decay retracement phase. From there you need
to derive the trade decision.

Example: Now say I have chosen nifty future

high as 2985 at 12:29 p.m and low as 2907 at
12.46 p.m. Based on these two data points I have
derived the following price points for bullish and
bearish bat pattern.

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Gann’s Method 34 intraday trading techniques
Bat Pattern

Bullish Bearish
A 2985 A 2907
X 2907 X 2985
C 2955.2 2936.796
B 2936.8 2955.204
D 2976.1 2915.892
While making the trade decision the point D is
important for me. If the current market price is
above 2976 (i.e. the point D price of the bullish bat
pattern) I will Buy nifty for initial target of 2985
and stop loss as 2955. I will sell nifty below 2915
for initial target of 2907 and stop loss 2936 .

It is commonly observed that if the bat formation

is broken then the target used to get expanded
unlimitedly.

You can observe from the intraday chart that once

the bearish bat pattern is broken at around 1:45 p.m
the target gets expanded till 2795.You can also find
the data points from one swing point by using the
Fibonacci retracement levels.
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Gann’s Method 34 intraday trading techniques
18. Crab pattern: This is also being developed by
the same person by Scott Carney in 2000. The
pattern looks like below.

Bullish Bearish

Example: Say I have taken the nifty future low as

2907.Then the bullish and bearish crab pattern
prices will be as given in the table below.
crab pattern

Bullish Bearish
X 2907
price 50
A 2926 2876
B 2937.9 2887.9
C 2887.9 2895.2
D 2826.1 2987.9
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Gann’s Method 34 intraday trading techniques
If you are deriving the prices of these patterns from
one price point then you need to specify one price
range arbitrarily in order to get the other price point

In crab pattern the A and B price is very important.

If the current market price rules above the B point
of the bullish crab pattern then buy with stop loss
at X point. The target will be unlimited. Same way
sell future at B point of the bearish crab pattern
with stop loss at X point and target unlimited.

19. Ideal butterfly pattern:

This pattern is also derived from the Fibonacci

ratios.

Bullish Bearish

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Gann’s Method 34 intraday trading techniques
Some key concepts one must know about this
pattern:

A. Both X and A price must be a real swing high or

low which would have occurred in the recent past.

B. The X price and A price must have the 0.786

relation ship between them.

C. The B and C swing point is derived in such a

way that the AB price difference must be equal to
the BC price difference.

D. D price point will be lowest among the 1.618

and 1.272 retracement level drawn from X or B.
Due to the complexity of this strategy I left it
without any example.

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Gann’s Method 34 intraday trading techniques
20. Trade using gaps:

If the opening price of a script on certain day is

higher than the previous day’s high then we used
to say that the upside gap is formed and vice versa.
The next question is how to interpret this gap? Once
the gap is formed in the opening trade, tendency
of the trader is to see whether the gap is bridging
or widening. The gap is bridged means the pre
existing event (which formed the gap) is going to
end. The gap is widening means the pre-existing
trend (which formed the gap) is going to continue.

Same tendency also hold good in the intraday 5

minutes price chart. If gap exists in the 5 minutes
price chart then it signals the trend is set and as a
trader you need to swim in the direction of the trend.
In this method if the price forms wide gap at least
three consecutive times then you must enter the
trade with tight stop loss below the 1st gap formation
price. Your target will be unlimited and not
computable by any mathematical procedure.

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Gann’s Method 34 intraday trading techniques
Example:

Say the 10 a.m to 10:05 a.m Nifty high is 2890

and the 10.05 a.m-10:10 a.m Nifty candles suggests
open of 2894 and high 2907, same way 10:10 a.m-
10:15 a.m nifty open and high suggest 2918-2930.
This suggests that the trend is set in the upside
direction and gap is forming in the upside direction
.

At this junction as long trader keeping the 1st level

of gap formation point i.e 2890 as stop loss you
can buy nifty for higher target. In this method
projecting the target is not possible by any means.
Hence stick to the trailing stop loss mechanism.
Same holds good for the down side gap formation.
You can read more about the gap on my book on
technical analysis volume-2.

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Gann’s Method 34 intraday trading techniques
21. Trade using the ‘Island reversal model’: “If
the rising gap of any prior trend coincides with the
falling gap of any current trend then we used to
say that the island reversal pattern is formed”

This formation can also happen in the intraday price

chart. Take the case of Gail price data on 12th
November 2008.

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Gann’s Method 34intraday trading techniques

In the above 5 minutes price chart the gap which is

formed in the 10:25 a.m to 10:30 a.m has reappeared
at the time of 1:55 p.m to 2.pm. in the same price
band of 208 to 210 . This clearly indicates the
formation of island reversal pattern in Gail. Before
this formation the stock made high of 215 . Hence
the height of the island is 215-208= Rs 7/- .

Thence deriving the 0.618 level from the island high

I got 215-7X0.618=210.60 will be the price for my
short entry. With stop loss as 215 and target will be
1.618 level from the island high = 215-1.618*7 =
203.70
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Gann’s Method 34 intraday trading techniques
This is very simple to apply on the intraday chart
and rewards big return in volatile market. Only 2
Fibonacci ratios 0.618 and 1.618 is being used in
case of intraday traded decision. However other
ratios is being used in case of weekly or monthly
data analysis.
22. Trade using the Pitch fork: In Andrew Pitch
Forks method three parallel horizontal trend lines
are drawn from three different price points in such
a way that the first trend line pass through the
median point joining the second and third price
points. Other two trend lines must be parallel to
the 1st trend line. This is also called the median
line trading method.

How to identify whether the current price trend

is trending or trailing? If the opening is higher
than the previous closing , the current high is higher
than the previous high, the current low is higher
than the previous low or vice versa then we can
say it is a trending market or trailing market. This
is the simplest tool available in all the technical
analysis s/w.
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Gann’s Method 34 intraday trading techniques

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Gann’s Method 34 intraday trading techniques
How to initiate the trade?

The median line is very important for making the

trade decision. If the current market price is above
the median line and lower the high fork then we
can say that the trend is up and one must buy at
this time considering the upper fork price as target
and median price line as stop loss. Same way one
must sell if the price is below the median line and
above the lower fork. In this method if the price
rises above the upper fork or falls below the lower
fork then the trend will be expanded with great
volatility. In these cases hold the trade with trailing
stop loss.

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Gann’s Method 34 intraday trading techniques

23. Trade using the MACD:

An indicator developed by Gerald Appel, that is

calculated by subtracting the 26-period
exponential moving average of a given security
from its 12-period exponential moving average.
By comparing moving averages, MACD displays
trend following characteristics, and by plotting the
difference of the moving averages as an oscillator,
MACD displays momentum characteristics. A 9-
day exponential moving average, called the
“signal” (or “trigger”) line is plotted on top of
the MACD to show buy/sell opportunities.

1. The basic MACD trading rule is to sell when

the MACD falls below its signal line. Similarly,
a buy signal occurs when the MACD rises
above its signal line. It is also popular to buy/
sell when the MACD goes above/below zero.

2. When the shorter moving average pulls away

dramatically from the longer moving average
(i.e., the MACD rises), it is likely that the
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Gann’s Method 34 intraday trading techniques
security price is overextending and will soon
return to more realistic levels.MACD over bought
and oversold conditions vary from security to
security.

3. An indication that an end to the current trend

may be near and it will occur when the MACD
diverges from the security price.

4. A bearish divergence occurs when the MACD

is making new lows while prices fail to reach
new lows.

5. A bullish divergence occurs when the MACD

is making new highs while prices fail to reach
new highs.

6. A positive divergence occurs when MACD

begins to advance and the security is still in a
downtrend and makes a lower reaction low.

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Gann’s Method 34 intraday trading techniques

7. A bullish moving average crossover occurs when

MACD moves above its trigger line. Bullish
moving average crossovers are probably the most
common signals and as such are the least reliable.

8. Bullish centreline crossover occurs when

MACD moves above the zero line and enters
into positive territory. This is a clear indication
that momentum has changed from negative to
positive.
Example: Below picture exhibits the MACD
histogram of Satyam computer and Tatasteel.

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Gann’s Method 34 intraday trading techniques

24 Trade Using Bollinger band

John Bollinger, this technique seeks to combine

moving averages with volatility (i.e. standard
deviation), using standard deviation as a price band
technique.
Standard deviation is defined by the symbol . The
statistical formula is given below.

 (X - X)

N

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Gann’s Method 34 intraday trading techniques
Bollinger has defined three bands upper, middle
and lower band. The middle band which acts as a
support line and helps us for taking the trade
decision. The upper and lower band define the
resistance and the support line.

The Middle band is defined as a 20 period moving

average.

Middle Band(i.e. X ) =
X
N
Upper Band = X + 2 
Lower Band= X - 2

1. Abrupt change in prices tend to happen after the

band has contracted due to decrease of volatility.

2. If prices break through the upper band, a

continuation of the current trend is to be expected.

3. If the pikes and hollows outside the band are

followed by pikes and hollows inside the band, a
reverse of trend may occur.

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Gann’s Method 34 intraday trading techniques
4. The price movement that has started from one of
the band’s lines usually reaches the opposite one.
The last observation is useful for forecasting price
guide posts.

25. Trade Using moving average channels:

The ‘Moving Average Envelopes indicator’

calculates two moving averages using the two price
inputs; High price and Low price. Both averages
are calculated using price data from the same
number of bars, per the input Length.
The second method for calculating the MAE is by
taking the closing price into consideration and the
second value is % variation of the first computed
value. If the script is more volatile, the percentage
should be taken larger.
A sell signal is generated when the security reaches
the upper band whereas a buy signal is generated
at the lower band. The optimum percentage shift
depends on the volatility of the security.

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Gann’s Method 34 intraday trading techniques

When the envelop is constructed using High and

low it is called as HiLo moving average band.

How to use Envelop to identify the buy/ sell

indicator?

Sell when the prices close below the middle band

and buy when the prices close above the middle
band. Additional buy or sell signals are taken when
the prices, after the first trade signal, either rally or
react near the upper or lower bands without breaking
them. It will be seen that there are multiple signals
of this nature.The signal of the other side would act
as the stop loss.

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Gann’s Method 34 intraday trading techniques
26. Discrete-Time model using Monte carlo
simulation: This is the most difficult stock price
forecasting model derived from the Monte carlo
simulation procedure. It follows the following
assumptions :

a. Stock price follow the geometric Brownian

motion
b. Change in stock price = Expected return X
stock price X time interval + volatility Xstcok
price X standard normal distribution of mean zero
and standard deviation 1X square root of time
interval
s = m*t*S + S*E* t
s= change in stock price
m= expected return
t= time interval in which the return is expected
S= stock price
E= standard normal distribution of mean zero and
standard deviation 1

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Gann’s Method 34 intraday trading techniques
Example: Say nifty is trading at 2950 and I
expect return of 2% in intraday trade. Hence
my time is 1/365 years 0.00274 years. Assume
the volatility is 65%. Now simulate the nifty
price based on the geometric Brownian motion
and forecast the price at which I must enter.
The Microsoft Excel function which I will be using
f o r t h i s c a l c u l a t i o n i s RAND(). This will generate

a random number between 0 and 1, and

NORMSINV(RAND()) to find the standard normal
distribution of mean zero and standard deviation
1. Based on the above information I will get the
following data . These data or the nifty price will
vary each time you will press delete key button on
any cell of your excel spread sheet.

Because we have chosen the RAND() function

which will generate a number in between 0-1
dynamically.

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Gann’s Method 34 intraday trading techniques
Nifty E Change
2950 -0.81809 -81.9518
2868.05 0.631748 61.80519
2929.85 0.44194 44.21587
2974.07 -0.02919 -2.79035
2971.28 -0.31436 -31.6177
2939.66 -1.87106 -186.982
2752.68 -0.23601 -21.9534
2730.73 0.086741 8.208836
2738.94 -1.08581 -101.036
2637.9 -0.86763 -77.7271
2560.17 0.511827 44.72448
2604.9 0.976711 86.70833
2691.6 -1.47159 -134.621
2556.98 -0.72756 -63.1573
2493.83 0.98433 83.65764
2577.48 0.070791 6.349368
2583.83 0.990349 87.20613

The above process signals that the stock price is so

dynamic that it can change in any direction to any
extent.
How to make the trade decision? Say the next
swing point is 2973 which is 23 points up from the
chosen point. I will simulate my excel sheet until
and unless I have not got the price change associate
with my chosen point to 23. Now I got 21.This
signals that the second point of iteration is 2971.8
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Gann’s Method 34 intraday trading techniques
which says I will buy at 2971.80 with stop loss at
2950, my target will be the next number higher to
2971.8 which is 3023.-3035.8 and so on.
Nifty E Change
2950 0.215584 21.80015
2971.8 1.144469 115.8839
3087.684 0.404387 42.65253
3130.337 1.752704 186.8474
3317.184 -1.4301 -161.227
3155.957 2.089342 224.5246
3380.482 -1.22788 -141.044
3239.438 -1.96323 -216.209
3023.23 1.112513 114.6023
3137.832 -0.19579 -20.7312
3117.101 -0.0718 -7.44371
3109.657 0.391728 41.6167
3151.274 -1.07859 -115.474
3035.8 1.478011 152.8314
3188.631 0.423456 46.11581
3234.747 0.0958 10.72095
3245.468 -0.04413 -4.69535
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Gann’s Method 34 intraday trading techniques
This iterative process is one of the most successful
methods in intraday.
27. Trade using the Engulfing candle pattern
“Two real candle body having opposed colour
where in the second candle totally engulfing the
first candle”. Engulfing pattern is of two types.

Engulfing Pattern

1st candle Engulf the 2nd

1. Bullish engulfing pattern:- “the first candle

is a black body with low volume and the second
candle is a white body with high volume totally
engulfing the first candle”

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Gann’s Method 34 intraday trading techniques

Bullish Engulfing Pattern

1st candle Engulf the 2nd

This is a most common candle pattern found in the

price time chart. The engulfing pattern is a good
trend indicator for swing traders. One most
important factor you need to remember is that the
entire candle patterns are short term in nature.So
the price projection also is short term in nature. My
point is if the candle pattern fails to give the break
out then the better practice is to exit.

Example: I have identified the formation of bullish

engulfing pattern formation in the price time chart
of Tatasteel in June 18th, 2007and June 19th, 2007.
Explain the breakout, target and the trend.

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Gann’s Method 34 intraday trading techniques

Analysis: Bullish engulfing pattern form in a down

trend. The price trend of Tatasteel was down in the
previous time period. Below the OHLC data is
given for reference.

Date open high low close volume

15-Jun-07 615.2 620 595.95 600.45 1557738
18-Jun-07 600.45 608.95 586.5 589.15 1517046
19-Jun-07 588 617 585 612.05 1979019
20-Jun-07 615 616.8 605 609.4 1227795

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Gann’s Method 34 intraday trading techniques
From the above OHLC data if you observe on 19th
June 2007 the high is higher than the 18th June 2007
high and 19th June 2007 low is lower than the 18th
June 2007 low and the 19th June 2007 closing is
higher than the opening which forms a white candle
and confirms the formation bullish engulfing
pattern.

Pattern breakout: On 19th June 2007 the high to

low price range is 617-585=32 price units. The
78.6% (i.e. the fibonacci retracement ratio) of the
price range is 25. The pattern breaks out will
happen at a price of 617 +25= 642. As long as the
price maintain below this price one can assume
that that the throwaway can happen at any stage.

Target: Engulfing pattern target is unlimited until

and unless the price does not form any bearish
reversal candle pattern in the chart. In more than
50% cases the throw away happens before giving
a break out in this pattern.

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Gann’s Method 34 intraday trading techniques
Volume: Volume used to be moderate in the
engulfing day. Sudden rise in volume you can
observe in the pattern break out day.

Pattern failure: If the price moves below 585-25

= 560 then we say that the bullish engulfing pattern
is a failure.

What will be entry and exit point?

The entry is suggested at a price above the

engulfing day’s high having stop loss below the
pattern failure price point. The target is unlimited
until and unless any bearish formation does not
takes place. It is also advisable to make an entry in
the counter after the pattern break out happens.

In the above example the pattern failure does not

happen but ‘throw away’ happens multiple times
before giving a breakout on 14th July 2007.

Note: In this chapter context the bullish trend

reversal pattern means the trend is going to change

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Gann’s Method 34 intraday trading techniques
from bullish to bearish.

2. Bearish engulfing pattern:- “The first candle is

a white body with low volume and the second
candle is a black body with high volume totally
engulfing the first body”

Bearish Engulfing Pattern

1st candle Engulf the 2nd

This is also a common pattern in price time chart

and strongest bearish reversal pattern. The success
rate of this pattern formation is more than 80 %(
i.e. in more than 80% cases the pattern used to
give break out). Once the pattern is identified the
next job is to find out the break out point,
throwaway price, entry and exit point, pattern
failure price point and target.
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Gann’s Method 34 intraday trading techniques
In all candle stick reversal patterns the price target
is unlimited until and unless any contradictory
reversal pattern is not formed in the price time chart
in the breakout direction.

Example: I have identified the formation of bearish

engulfing pattern in SBI on 06th June 2007. Find
out the break out point, target, pattern failure point,
entry and exit point? Below the price time chart
and the OHLC data is given for reference.

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Gann’s Method 34 intraday trading techniques

Date Open High Low Close Total Trd Qty

01-Jun-07 1364 1385 1356 1378.9 1908666
04-Jun-07 1400 1418.4 1390 1406.4 2182423
05-Jun-07 1400 1445 1393 1437 1808672
06-Jun-07 1445 1454 1381 1390 1857287
07-Jun-07 1382 1401.9 1353.3 1360.7 2148431
08-Jun-07 1331.3 1387 1321.3 1356.6 2037482
Analysis: Bearish engulfing pattern forms in a bull
trend and indicates reversal of the bull trend. From
the OHLC data it is being observed that the 6th
June 2007 high is higher than the 5th June 2007
high, the 6th June 2007 low is lower than the 5th
June 2007 low. The closing of the 6th June 2007 is
lower than the opening. Hence it confirms the
formation of bearish engulfing pattern.

Pattern break out: On 6th June 2007 the high to

low price range is 1454-1381=73. The 78.6% (i.e.
the fibonacci retracement ratio) of the price range
is 57.37. The pattern break out will happen at a
price of 1381 – 57.37= 1323.63. As long as the
price maintains above this level one can assume
that the throw away can happen at any stage.

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Gann’s Method 34 intraday trading techniques
Target: Engulfing pattern target is unlimited until
and unless the price does not form any bullish
reversal candle pattern in the chart. In more than
50% cases the throwaway happens before giving a
break out in this pattern.
Volume: Volume used to be moderate in the
engulfing day. Sudden rise in volume you can
observe in the pattern break out day.

Pattern failure: If the price moves above

1454+57.37 = 1511.37 then we say the bearish
engulfing pattern is a failure.

What will be entry and exit point?

It is advisable to enter a short trade on the day

following the engulfing day with a price above the
break out point having stop loss at the pattern failure
price point. The target will be unlimited until and
unless it has not formed any contradictory reversal
pattern. It is also advisable to make an entry after
you encounter a break for better result.

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Gann’s Method 34 intraday trading techniques
In our case the pattern has failed to give a break out
and became a failure in the future days.

28. Impulse : Impulse is a 5 wave impulsive wave

pattern in the Elliot wave theory. It has wide range
of the properties. In the intraday context I have
derived few properties for making the trade
decision.

a. Wave 1 length must be the 0.382 retracement

level of prior swings
b. Wave 2 must not be higher than 0.618
retracement level of wave1
c. Wave 3 should be of 1.272 retracement level
of wave 1
d. Wave 4 must not be higher than 0.618
retracement of wave 3
e. Wave 5 must have the same length as wave 1.

Based on these assumptions I will derive the

swing turning points and I will initiate the trade
in the 3rd wave construction process.

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Gann’s Method 34 intraday trading techniques
Example: Say the swing high and low of nifty
future on 12th November 2008 at 10:50 a.m. is
2963 and 2858.

Based on the above assumptions and ‘data points’

I have derived the following construction and
termination points for these patterns. Each
construction and termination point will act as the
resistance and support for the move.
high low price range
2963 2858 105
construction
termination
wave 1 2858 2898.11
wave 2 2898.11 2873.322
wave 3 2873.32 2904.8523
wave 4 2904.85 2885.3666
wave 5 2885.37 2925.4766
I will initiate the buy trade above 2873 for target
2904 and same way I will also buy above 2885
for target 2925 .
If I want to sell; I will sell below 2898 for target
2873 . My point is that the buy decision must be
made in the construction price of wave 1,wave3
and wave 5 same as the sell decision points are
wave 2 and wave 4.
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Gann’s Method 34 intraday trading techniques
However this pattern happens in a upward
trend.Hence I caution not to initiate the sell order
in this pattern. My point is you must derive the
construction and termination points of the waves
only if the trend is up or else not.
29. Zigzag: Zig-zag is a 5-3-5 pattern happen in
the phase of the corrective waves. Means after a
fall,there is one set of 1-2-3-4-5 wave formation
then 1-2-3 wave formation and the last leg is 1-2-
3-4-5 formation. This is wave formation which
holds the same rule as given in the impulse. In this
you need to identify the 13 different construction
and termination points.

Example: Say the swing high and low of Nifty

future on 12th November 2008 at 10:50 a.m. is
2963 and 2858.

Based on the above assumptions and ‘data points’

I have derived the following construction and
termination points for these patterns. Each
construction and termination point will act as the
resistance and support for the move.
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Gann’s Method 34 intraday trading techniques

h ig h lo w p r ic e r a n g e
2963 2858 105
c o n s t r u c t i o nt e r m i n a t i o n
w a v e 1 2858 2 8 9 8 .1 1
w a v e 2 2 8 9 8 .1 1 2 8 7 3 .3 2 2
w a v e 3 2 8 7 3 .3 2 2 2 9 0 4 .8 5 2 3
w a v e 4 2 9 0 4 .8 5 2 3 2 8 8 5 .3 6 6 6
w a v e 5 2 8 8 5 .3 6 6 6 2 9 2 5 .4 7 6 6
w a v e 1 2 9 2 5 .4 7 6 6 2 9 4 0 .7 9 8 6
w a v e 2 2 9 4 0 .7 9 8 6 2 9 3 1 .3 2 9 6
w a v e 3 2 9 3 1 .3 2 9 6 2 9 4 3 .3 7 4
w a v e 1 2 9 4 3 .3 7 4 2 2 9 4 7 .9 7 5 2
w a v e 2 2 9 4 7 .9 7 5 2 2 9 4 5 .1 3 1 8
w a v e 3 2 9 4 5 .1 3 1 8 2 9 4 8 .7 4 8 6
w a v e 4 2 9 4 8 .7 4 8 6 2 9 4 6 .5 1 3 4
w a v e 5 2 9 4 6 .5 1 3 4 2 9 5 1 .1 1 4 4

Since it is a corrective pattern I will initiate the sell

at 2nd part 3rd wave termination. This equals to 2943
point with stop loss at last part 5th wave termination
point this equal to 2951.The target for this move
will be 1st part 1 wave construction point this is
equal to 2858. Since it is a corrective pattern, do
not initiate any buy trade in any of the swing turning
points.

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Gann’s Method 34 intraday trading techniques
30. Ending Diagonal : Ending Diagonal is known
as ED pattern in wave theory. In the impulse pattern
the five wave sequence has three rising waves and
the two falling wave. The trend line joining the
wave 1-3-5 termination points and the wave 2-4
termination point produce a channel for the impulse
pattern. This pattern is called ending diagonal

Ending Diagonal 5
Upper Channel Line
3

4
1

Lower Channel Line

2

31. Leading diagonal : If the channel has 5-3-5-3-

5 or 3-3-3-3-3 waves then it is called as a leading
diagonal LD. Below picture exhibits the formation
of ending diagonal and leading diagonal pattern.

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Gann’s Method 34 intraday trading techniques

Leading Diagonal
5-3-5-3-5 pattern 5
3

1
4

2
Wave 1 has 5 subwaves
Wave 2 has 3 subwaves
Wave 3 has 5 subwaves
Wave 4 has 3 subwaves
Wave 4 has 5 subwaves

32. Flat :

Flat is a corrective pattern in the wave theory.

Slightly differ from the zigzag pattern. It is a
corrective pattern of A-B-C having sub wave of 3-
3-5. Below picture exhibits the Flat pattern.

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Gann’s Method 34 intraday trading techniques

Flat
3-3-5 pattern

A
C
Wave A has 3 subwaves
Wave B has 3 subwaves
Wave C has 5 subwaves

33. Expanding triangle-Wave principle triangle

contains five waves a-b-c-d-e, wherein each wave
will be having three sub waves 3-3-3-3-3. The
triangles are divided into two categories a.
contracting, b. expanding. Further more each
category is divided into three type’s a. symmetric
b. ascending c. descending. Below picture exhibit
the triangles.

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Gann’s Method 34 intraday trading techniques

Expanding Triangle
3-3-3-3-3 pattern

2 4

1
It has 3 bottom points and 2 top points
base part is exapnded due to decline in 3
last 3 waves. This signals trend reversal
in bearish side
5

34. Contracting triangle

Contracting Triangle
3-3-3-3-3 pattern

4 5

1 It has 3 bottom points and 2 top points

base part is exapnded due to decline in
first 3 waves. This signals trend reversal
in bullish direction if the price manage
to cross point 5 high.

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Gann’s Method 34 intraday trading techniques
Above 5 patterns are difficult to express
numerically.However just use the termination
points as given in the figure to derive the trade
decision and identify the patterns by drawing the
trend lines.

I conclude my writing with few simple words. If

you understood the art of converting the number
to degrees and again the degree to numbers; then
you understood the tricks of legend trader W.D.
Gann. I hope this piece of information will help
you for making an accurate trade decision. My
research on Gann’s is not ending here. Still I am in
a process to explore many other interesting parts
of Gann’s work.It may find a place in my future
editions if God’s blessing and your best wishes will
be with me. I hope as a reader of this book you will
start your journey to learn more and more on this
Great person’s work.

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