Gann Fan

A Gann fan is a bundle of rays from a significant high or low. Each ray is a fixed amount of price per bar. The 1x1 is one unit of price per unit of time. The 2x1 is steeper, two units of price per unit of time. The 1x2 is flatter. Gann's claim was that the 1x1, the 45-degree line when the chart is scaled so that one price unit matches one time unit, is the line of balance. Price above a rising 1x1 is strong. A break of it is a change. The other rays, typically 1x8, 1x4, 1x3, 1x2, 2x1, 3x1, 4x1, and 8x1, are secondary. The fan is not a Fibonacci fan. The slopes come from Gann's ratios of price and time, not from phi.

The scaling is the whole problem, and it is not optional. A 1x1 line is 45 degrees on the screen only if you have squared the chart: a chosen price increment occupies the same distance as one bar. Change the zoom and a naive 45-degree drawing points at a different price. Gann fans in software ask you to set a price-per-bar ratio. If you leave that ratio at a default you have not thought about, the fan is arbitrary. Set it from the market, for example the average daily range, and then leave it alone. A fan that you re-scale until it hits is not a test of anything.

If you use a Gann fan, use the 1x1 as a trend filter on a squared chart and ignore most of the other rays until the 1x1 is actually part of your process. A pullback that holds the 1x1 is in this method a buy in an uptrend. A break of the 1x1 is a reason to stop treating the trend as balanced. Confirm with the swing structure. A diagonal that has never been touched is not support yet. Gann's broader system also used time counts and the Square of Nine. The fan alone is not that system.

Drawing a 45-degree line with the screen's protractor and calling it Gann's 1x1. Unless the axes are squared, it is just a 45-degree graphic. Also treating nine rays as nine independent signals. They share an anchor. And optimising the price unit until the past fits, which any fan of lines can be made to do.

Gann's methods are poorly specified in the surviving public sources, and a great deal of later writing fills the gaps with the author's own rules. A fan does not include volume or a unique stop. It is a slope grid. It will not be stable across a change in volatility, because a 1x1 defined in quiet conditions is a different angle, in practical terms, once the daily range doubles. Recalibrating after the fact is fitting. Living with the old scale is stubborn. Know which one you are doing.