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<\/span>The Gann Fan indi cator<\/span><\/h2>\n\n\n\n
There is a special instrument that automatically draws the lines of the Gann Fan on the chart. It has the same name. To add it to the chart of your desired instrument in MetaTrader 4<\/a> or MetaTrader 5<\/a>, go to the Main Menu\/Insert\/Gann\/Gann Fan.<\/p>\n\n\n\n
Then locate it on the chart, setting the starting point. For an uptrend, take the local low from where an ascending impulse has started; the indicator lines will head upwards. For a downtrend, take the local high in which the downtrend started; the lines will go downwards.<\/p>\n\n\n\n
You can customize the width and color of the lines. By default, 1:1 has a slope of 45 degrees but this is also changeable. To change the angle of the main line, double-click it: the boxes will appear on the line, by moving which you will change the slope and move the whole indicator.<\/p>\n\n\n\n
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Gann Fan uptrend<\/figcaption><\/figure>\n\n\n\n
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Gann Fan downtrend<\/figcaption><\/figure>\n\n\n\n
<\/span>Trading with the Gann Fan<\/span><\/h2>\n\n\n\n
According to Gann's theory, the market has a perfect balance when the price and time are synchronic. The larger part of the theory is based on the idea that the market is bullish when the price chart gets above the main 1:1 line sloping at 45 degrees. And vice versa, when the price chart is below the line, the market becomes bearish.<\/p>\n\n\n\n
In essense, the lines of the Gann Fan can be used as supplementary support and resistance lines<\/a> on the price chart. They are compatible with classic tech analysis<\/a> lines and levels. Also, the indicator produces independent trading signals<\/a>. Let us have a look at the most important ones — a bounce off and a breakaway of the main 1:1 line.<\/p>\n\n\n\n
<\/span>A bounce off line 1:1 of the Gann Fan<\/span><\/h3>\n\n\n\n
If in an uptrend the price falls to 1:1 and forms a local low but then reverses upwards, you can open a buying position. Place your Stop Loss<\/a> behind the local low and take your Profit when the price reaches 2:1. For a downtrend, the actions are the same but in the opposite direction (and you open a selling position).<\/p>\n\n\n\n
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A bounce off line 1:1 of the Gann Fan<\/figcaption><\/figure>\n\n\n\n
<\/span>A breakaway of line 1:1 of the Gann Fan<\/span><\/h3>\n\n\n\n
If an uptrend is reversing, and the price closes confidently below 1:1 (breaking it away downwards), wait for it to return to the broken line and open a selling position with an SL behind the local high. Take your Profit when the price reaches 1:2. For a reversal of a downtrend, do the same but in the opposite direction, opening a buying position.<\/p>\n\n\n\n
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A breakaway of line 1:1 of the Gann Fan<\/figcaption><\/figure>\n\n\n\n
<\/span>Closing thoughts<\/span><\/h2>\n\n\n\n
The Gann Fan is a curious instrument for tech analysis and price forecasts. It can be used alongside classic tech analysis or on its own. To get the very gist of this trading method, read the book \"How to Make Profits in Commodities<\/a>\" by William Gann.<\/p>\n\n\n\n
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