Gann Fans

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Gann Angles

    Created by W.D. Gann, a method of predicting price movements ...
  2. Pivot Point

    A technical analysis indicator used to determine the overall ...
  3. Trendline

    A line that is drawn over pivot highs or under pivot lows to ...
  4. Resistance (Resistance Level)

    A chart point or range that caps an increase in the level of ...
  5. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  6. Support (Support Level)

    The price level which, historically, a stock has had difficulty ...
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. Why does the efficient market hypothesis state that technical analysis is bunk?

    The efficient market hypothesis (EMH) suggests that markets are informationally efficient. This means that historical prices ... Read Full Answer >>
  5. How is convertible bond valuation different than traditional bond valuation?

    Convertible bonds have features of equity securities since they can be conditionally converted into shares. This makes them ... Read Full Answer >>
  6. How does portfolio management software work?

    There are numerous varieties of portfolio management software. The essential function of portfolio management software is ... Read Full Answer >>
Related Articles
  1. Active Trading Fundamentals

    The Psychology Of Support And Resistance Zones

    Emotion drives the market more than you might realize. Find out how psychology affects support and resistance zones.
  2. Technical Indicators

    Interpreting Support And Resistance Zones

    Use of support and resistance zones can be a key to successful trades. Learn how they work and how to use them.
  3. Active Trading Fundamentals

    The Utility Of Trendlines

    Trendlines give an investor a good idea of the direction an investment might move in. Discover how to make them work for your portfolio.
  4. Mutual Funds & ETFs

    How To Use Gann Indicators

    This trendline-like technical analysis tool has been around for decades - but it still works.
  5. Technical Indicators

    The Gann Studies

    Learn why this pioneer of technical analysis believed it's possible to predict the future.
  6. Active Trading Fundamentals

    Support And Resistance Reversals

    Discover how these influential levels can switch roles.
  7. Chart Advisor

    Expect Breakouts in These Stocks Soon

    Watch these stocks this week for a breakout. There are long and short candidates, based on different chart patterns.
  8. Chart Advisor

    Watch These Stocks for a Breakout

    These stocks are are tight and will eventually breakout out. Here ways to trade them.
  9. Fundamental Analysis

    What is Quantitative Analysis?

    Quantitative analysis refers to the use of mathematical computations to analyze markets and investments.
  10. Chart Advisor

    Invest in Japan with this ETF

    The Japanese stock market has been front and center in the minds of many international traders over the past few weeks — and for good reason.

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center