Gann Fans
Overview
Gann fans are a technical-analysis tool created by W.D. Gann that use angled lines (Gann angles) to project potential support and resistance based on the relationship between price and time. They are drawn from a significant reversal point (a swing high or low) and extend into the future to help gauge trend direction and strength. The 45-degree angle (the 1:1 line) is considered the most important because it represents equal units of price change per unit of time.
How Gann Fans are constructed
- Choose a clear reversal point (swing high or swing low) as the fan’s origin.
- Use your charting platform’s angle or Gann-fan tool to draw the 1:1 (45°) line from that origin. Align it so it represents one price unit per one time unit on the chart.
- Add additional lines that represent other price:time ratios. Common ratios included in a Gann fan are:
- 1:8, 1:4, 1:3, 1:2 (flatter than 1:1)
- 1:1 (45°)
- 2:1, 3:1, 4:1, 8:1 (steeper than 1:1)
- Many charting packages will draw these standard angles automatically; if not, use the angle tool and the grid analogy: a line rising one square per one time box is 45° (1:1); two time boxes per one price box is flatter (2:1), and so on.
How to read and use Gann Fans
- The 1:1 (45°) line serves as the primary trend indicator:
- Price above the 1:1 line suggests bullish strength.
- Price below the 1:1 line suggests bearish strength.
- Other fan lines act as additional support and resistance levels. If price breaks through one angle, it often trends toward the next angle.
- Use the fan to:
- Anticipate potential reversal or pause levels.
- Assess trend strength by observing how price interacts with the lines.
- Estimate where price might be at future dates, since Gann angles tie price change to time.
Gann Fans vs. Trendlines
- Gann angles are drawn at fixed geometric slopes (uniform rate of price change per time) and are meant to project where a given slope will be in the future.
- Trendlines are drawn by connecting successive swing highs or lows and are adjusted to match recent price action; they are not constrained to specific geometric angles.
- Because Gann angles are uniform, they can be used to forecast price positions on particular dates. Trendlines can be more flexible but less reliable for long-term forecasting.
Limitations and best practices
- Chart scaling matters: if price and time axes aren’t scaled to reflect equal units, the 45° line won’t represent a true 1:1 relationship. Many platforms don’t automatically scale for this.
- Lines spread out over time, so fan levels can become widely spaced and less actionable.
- Price does not always respect fan lines; they sometimes fail to mark significant support/resistance.
- Use Gann fans alongside other technical tools (moving averages, price-action patterns, momentum indicators) and sound risk management.
- Verify the 45° alignment with your platform’s angle tool when precision matters.
Key takeaways
- Gann fans are a set of angled lines based on price:time ratios used to identify potential support and resistance and to assess trend strength.
- The 1:1 (45°) line is central: staying above it is bullish, staying below is bearish.
- Additional lines (e.g., 2:1, 3:1, 4:1 and their inverses) provide successive targets if price breaks an angle.
- They require careful attention to chart scaling and should be combined with other analysis methods for trading decisions.