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Angles: Geometric angles are another important part of the Gann trading method. The markets are geometric in design and function, so it follows that they will follow geometric laws when charted. Gann insisted on the use of the proper scale for each market when charting, to maintain a harmonic relationship. He therefore chose a piece scale that was in agreement with a geometric design or formula.
He mainly relied on a 45-degree angle to divide a chart into important price and time zones. This angle is usually referred to as the “1×1” angle, because it represents one unit of price with one unit of time. He also used other proportional geometric angles to divide price and time. These angles are also known as 1×2 and 2×1 angles because they represent one unit of price with two units of time and two units of price with one unit of time, respectively.
All of the angles are important because they indicate support and resistance. They also have predictive value for future direction and price activity – all of which is necessary to know in order to forecast where the market can be in the future and when it is likely to be there.
Anniversary Dates: Among the timing tools Gann used is a concept he referred to as “anniversary dates.” This term refers to the historical dates the market made major tops and bottoms. The information collected in effect reflects the seasonality of the market because often an anniversary date repeats in the future. A cluster of anniversary dates indicates the strong tendency of a market to post a major top and bottom each year at the same time.
