Chapter 4 | 3 min read

Drawing Gann Angles

Introduction

Gann was very particular about how charts are made. He used square-ruled paper so that each small box represented one unit of price and one unit of time. In this lesson, you will learn how to draw Gann angles correctly on Indian stocks and indices.

Step 1: Choose the Starting Point

Draw angles only from important tops and bottoms, such as:

  • A major yearly or multi-year low or high.
  • A clear double or triple bottom or top.
  • A swing low or high after a big move.

Angles from small, unimportant points give weak signals.

Step 2: Choose the Time Unit

  • Daily chart: 1 unit = 1 trading day.
  • Weekly chart: 1 unit = 1 week.
  • Monthly chart: 1 unit = 1 month.

Step 3: Choose the Price Unit (Scale)

This is the key step. Some practical scales used by traders:

Instrument (illustrative)Daily scaleWeekly scale
Stock around Rs 100Rs 0.25 to Rs 0.50Rs 1 to Rs 2
Stock around Rs 1,000Rs 2 to Rs 5Rs 10 to Rs 20
Nifty around 24,00020 to 50 points100 to 200 points
Bank Nifty around 52,00050 to 100 points250 to 500 points

Test the scale on past data. The best scale is the one where the 1x1 angle has respected major swings in the past.

Step 4: Calculate Angle Values

From a bottom: Angle value = Low + (Scale x Angle ratio x Number of time units)

From a top: Angle value = High - (Scale x Angle ratio x Number of time units)

Angle ratio: 8x1 = 8, 4x1 = 4, 2x1 = 2, 1x1 = 1, 1x2 = 0.5, 1x4 = 0.25, 1x8 = 0.125.

Example: Nifty Weekly (Illustrative)

Nifty makes a major weekly low at 21,000. Scale: 100 points per week. After 12 weeks:

  • 2x1 = 21,000 + (100 x 2 x 12) = 23,400
  • 1x1 = 21,000 + (100 x 1 x 12) = 22,200
  • 1x2 = 21,000 + (100 x 0.5 x 12) = 21,600

If Nifty is at 23,800, it is above even the 2x1 angle, showing a very strong trend. A fall back to 23,400 (2x1) would be the first support; below that, 22,200 (1x1).

Step 5: Draw a Gann Fan

Draw all angles from the same starting point. The price moves between the angles. When it breaks one angle, it usually moves to the next.

Common Mistakes

  • Changing the scale after drawing, which makes angles meaningless.
  • Drawing angles from minor swings.
  • Ignoring the time unit (mixing trading and calendar days).

Practice with GoPocket

Open the weekly chart of Nifty on the GoPocket app. Pick the lowest weekly low of the last two years. Make a spreadsheet with week numbers and angle values. Compare the angle values with actual weekly closes to see which angles acted as support.

Frequently Asked Questions

Can I use the Gann fan tool in charting software?

Yes, many platforms have one, but always check the price-per-bar setting so the angles are drawn at your chosen scale.

Should angles start from the close or the extreme low?

Gann used extreme highs and lows.

Key Takeaways

  • Draw angles from major tops and bottoms only.
  • Fix the scale and keep it constant.
  • Calculate angle values with numbers for accuracy.

Disclaimer: Illustrative calculations for education.