On Gann Angles and the Square of Nine

This was posted in a public forum some time ago by a trader

Dear Group,

This is a technique that you can use even if you think the astro - stuff is hard to digest. The method is developed from Sq of nine, but it is not necessarily to know any thing about that master chart to take andvantage of it. Do you know that according to Mr. Renato Alghini, WD Gann used to bring his own pocket sized Sq of Nine chart to the tradingfloor. The conclusion must be that Gann considered this master chart to be one of his most valuable tools.

You just take the price of a important low or a high and treat it as both a 3 and a 4 digit number (only as long as it take you to determine what works the best for each stock, index or commodity).

Then square it, and multiply the sum by 2 and then you got your timeframe measured in days.

Go back and add 2 to the square (if it is a square of a low, and the opposite if it is a high) this equals a 360* move on the Sq 9 chart.

Now you have both a price and time. Draw a trendline from the low trough the time and price spot and you just created a geometric 1 by 1 line.

Next step will be to take the price and dived it with 2 to get a 1 by 2 line. Then you should multiply your price by 2 to get a 2 by 1 line.

IMO this will be quite a rough map so I usually take my 1 by 1 price and process it with the following numbers, 0.333, 0.666, 1.333, 1.666 and so on. But you should try out for yourself what will work best, the 1/4 increments work out quite well some time.

Remember Gann's own words:

"Prove all things to yourself and hold on to that which is good."

This technique is just a map to start navigate after, I believe the lines represent places in time and space where they will find balance. I do not think this method will work out all the time, but I do think it could be a guide to use in a market or a stock that you do not follow closely and trade but you still want to keep an eye on.

We take something recent, like the SPX cash from the top 5/22 (1315,93).

Example:

The SPX work out best as a 4 digit number so we will use 1316. The square of 1316 x 2 is 72,55 (½ Sq. 12) and this would equal 8/3 as our time frame.

If you move 360* (with your Sq. 9 chart) from1316 you land on 1175, so a line drawn from 1316 (5/22) to 1175 8/3 would be the 1 by 1 or 45 degree line. 1316 - 1175 = 141 so 141 is the number you will use for further calculation. 141 x 2 = 282, 1316 - 282 = 1034 Then you draw your next line from 1316 (5/22) to 1034 (8/3) and so on.

But.... Life is not that simple all the time, most of the software's in the market does not leave open space's on weekend's so you will get an error all the time, that is why I never use this method when trying to pinpoint a turn.

But you can use the principal of the theory for that purpose too, and determine high's and low's.

For example if you done it right and used both the high of 5/22 and the low of 3/22 and the knowledge I outlined here you should be able to create a cluster with an arithmetical mean just 0,63 pts below the actual low. And the high of 6/6 ( I know that the actual high occurred 6/5 but with this single method the price balanced the time in a better way 6/6. And the high of 6/21 with a lack of 0,23 pst, and so on. If you are ready to do the work.

In my personal opinion I believe that we should work with the Square of Nine Chart in every way possible, I think it is one to important gate to neglect. Utaro have also shown us a very interesting approach to the use of Sq. 9 in bond futures, thank you Utaro.

If you would like to learn more about Sq. of Nine technique's I think Daniel T. Ferrera's course is to be recommended. If I am right informed, he describes the basic of this theory as well. If that course have the same high quality as his big Gann course (I have read it) I believe it is worth its price. IMO Ferrera is a man who know what he is talking about.