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Gann Theory: Gann Theory is based on the principle that price and time must balance. Markets are constantly in a position of change and subject to movement, sometimes with great volatility.
Gann Theory states that there is order to this movement. By using the proper tools to analyze this movement, an accurate forecast for future direction can be made.
Finding the balancing points is necessary to predict future prices and movement. Gann developed a number of methods to help determine these balance points. The first method uses patterns created by swing charts to find the balance points. The second method uses angles and the squaring of price and time to find the balance points. The third method uses time.
While the perfect market remains balanced all the time, it also proves to be uninteresting, because major moves occur when price is ahead of time or time is ahead of price. The proper use of the various Gann analysis tools will help you to determine when these major moves are most likely to occur.
