Gann Fans

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DEFINITION of 'Gann Fans'

A form of technical analysis based on the ideas that the market is geometric and cyclical in nature. A Gann fan consists of a series of diagonal lines called Gann angles, of which there are nine. These angles are superimposed over a price chart to show a security's support and resistance levels. The resulting image is supposed to help technical analysts predict price changes. Although once drawn by hand, today Gann fans can be drawn with software programs.

BREAKING DOWN 'Gann Fans'

Gann Fans were developed by W. D. Gann, who was also known for his accurate financial predictions, called the Gann studies, in the early 1900s. Gann's ideal angle was a 45 degree angle based on his ideal balance of time and price. However, because the construction of a Gann fan relies heavily on subjective choices made by individual traders, the chart may be limited in its usefulness and accuracy. The three premises Gann based his theory on were: i) price, time and range are the only factors, ii) cyclical markets, and iii) geometric market design.

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RELATED FAQS
  1. What is the Gann Fans formula and how is it calculated?

    Gann fans, named after creator W.D. Gann, are a form of geometric technical analysis based on the assumption that markets ... Read Full Answer >>
  2. What are the best technical indicators to complement the Gann Fans?

    The basic rules for trading with Gann fans are simple and subjectively applied, making them relatively easy to use with trend ... Read Full Answer >>
  3. How do I use Gann Fans for creating a forex trading strategy?

    Gann fans are the most well-known of William Delbert Gann's trading tools and have been used for decades to identify support ... Read Full Answer >>
  4. What assumptions are made when conducting a t-test?

    The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>
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    Since the fixed charge coverage ratio indicates the number of times a company is capable of making its fixed charge payments ... Read Full Answer >>
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    The two commonly used methods for doing a tax-free spinoff are either to distribute shares of the spinoff company to existing ... Read Full Answer >>

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