Time and Price Together

Introduction

Gann's strongest signals come when time and price agree. A price level alone can be crossed. A time date alone can pass without a change. But when an important price level is reached on an important time date with the right formation and volume, the chance of a trend change is much higher.

The Four Factors Together

Gann said the four main factors are:

• Formation: double or triple tops and bottoms, sections of a campaign.
• Time: cycles, seasonal dates, anniversaries, day and week counts, squaring.
• Resistance levels: 1/8 and 1/3 levels, angles, Square of Nine, natural levels.
• Volume: heavy at tops after long rises, light at bottoms after long falls.

Example 1: A Top Signal (Illustrative)

Nifty has risen for 13 weeks from 22,000 to 25,000.

• Time: 13 weeks = 1/4 year (culmination period).
• Price: 25,000 is a strong round-number level. On the Square of Nine, the square root of 22,000 is about 148.3. Adding 10 (five full 360-degree rotations, or 1,800 degrees) gives 158.3, and 158.3 squared is about 25,066. So the round number and a Square of Nine level fall almost together.
• Formation: Nifty makes a double top at 25,000 over two weeks.
• Volume: very heavy on the up days near the top.

All four factors agree. A Gann trader would book profits and avoid fresh buying until a new bottom forms.

Example 2: A Bottom Signal (Illustrative)

Infosys falls from Rs 1,900 to Rs 1,450 over about 90 days.

• Time: 90 days = 1/4 year.
• Price: Rs 1,450 is near the 5/8 retracement of its earlier rise and close to a Square of Nine level.
• Formation: a double bottom with a higher second low.
• Volume: selling dries up; range narrows.

Gann would look to buy on a close above the recent swing high, with a stop-loss below the double bottom.

When Factors Disagree

If time says "top" but price has not reached any resistance level and the trend is strong, the time date may produce only a small pause. Gann advised waiting for price confirmation before acting.

Scoring Method

A simple way to use this lesson is to give one point for each factor that agrees:

• 1 point: watch only.
• 2 points: prepare a plan.
• 3 to 4 points: act with a stop-loss.

Apply on GoPocket

Before every trade on the GoPocket app, write down the time, price, formation and volume factors. Trade only when at least three agree. Place a Limit order for entry and a stop-loss order immediately after execution.

Frequently Asked Questions

Which factor is most important?

Gann considered time most important, but he used all four together.

What if I get only two factors?

Wait. Patience was one of Gann's key requirements for success.

Key Takeaways

• Time plus price plus formation plus volume gives the strongest signal.
• Use a simple scoring system to judge setups.
• Always protect trades with stop-losses.

Disclaimer: Illustrative example. Investments in the securities market are subject to market risks.