Friday, November 16, 2012

Converting time or price to gann Degree

Gann Angles: Basic Explanation
W.D. Gann (1878-1955) developed the use of what he called "Geometric Angles", now  commonly referred to as Gann Angles, used to determine trend direction and strength, support and resistance, as well as probabilities of price reversal.

Gann was fascinated by the relation of time (T) and price (P). Gann drew his angles from all significant price pivot point highs and lows. He used just one pivot point to draw an angle that rose (or fell) at predetermined and fixed rates of speed, as follows:
T x P = n degrees
1 x 8 = 82.5 degrees
1 x 4 = 75 degrees
1 x 3 = 71.25 degrees
1 x 2 = 63.75 degrees
1 x 1 = 45 degrees
2 x 1 = 26.25 degrees
3 x 1 = 18.75 degrees
4 x 1 = 15 degrees
8 x 1 = 7.5 degrees

where
T is the number of units of time, graphically plotted on the horizontal x-axis.
P is the number of units of price, graphically plotted on the vertical y-axis.
x is read as "by".
n
 degrees specifies the slope of the Gann angle, measured in degrees.

Translating time by price into degrees assumes a square grid, where one unit of time on the x-axis takes up the same amount of horizontal space as the one unit of price on the y-axis takes up vertical space. For example, 1/16 of an inch might be set to one week of time on the horizontal x-axis, and 1/16 of an inch might be set to one dollar of price on the vertical y-axis. On such a proportionally scaled chart, the 1 x 1 geometric angle, which for every one unit of time rises one point in price, is a 45 degree angle. 



How to Calculate Hexagon Chart Angles


Ever wonder how to calculate an angle on WD Gann's hexagon chart? Here is the formula

1 equates to 360 degrees.
Therefore .5 equates to 180 degrees and .25 to 90.
(But just like the sq9 calcs., not exactly)

let "a" be your number or price or whatever

then

a = 3n(n-1)

your first step of course is to solve for n which is
not as easy as taking the square root but almost.
Remember the quadratic equation?

 n = (3 + (9 + 12*a)½)/6

lets say your number is 36 and you want to add 90
degrees

1. first find n

 n = (3 + (9 + 12*36)½)/6 = 4

(In case its not clear… we are taking the square
 root of the term (9 + 12*36) in the above equation)

2. since 1 => 360 degrees , .25 => 90 degrees adding
that to the n = 4 gives 4.25 therefore your target
becomes:

 a' = 3*4.25(4.25 -1) = 41.4 <- not quite 42 like
 it should be but close enough don't you agree?

 Remember…

 the Square of 9
 (Futia) formula is:
 degrees = (180*P½ -225)*360 (degrees)


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