How I Execute Trades Using Gann’s Square of 9

7天前

Here in this example, I have used the Square of 9 method to predict a potential market reversal and executions. W.D. Gann, a legendary trader and analyst, is renowned for his pioneering techniques in financial markets.

Among his tools, the Square of 9 stands out as a remarkable system to predict market turning points with precision. In this blog, we’ll explore the fundamentals of the Square of 9, how it works, and how we can use it to improve timing and decision-making in the markets.

What is the Square of 9?



The Square of 9 is a spiral-based numerical grid where numbers are arranged in a square, starting from 1 at the center and spiraling outward. Each number on the grid has angular relationships with other numbers, which Gann believed could forecast significant market movements.

For instance:

Numbers at the same angles (e.g., 39, 67, 105, 150) share a relationship that can signify potential turning points in the market.

By marking these numbers and aligning them with trading days, we can identify key dates for potential price reversals.

Core Assumptions in Price Dynamics

Gann’s methods rely on two key assumptions:

1. Repetition in Price and Time: Price tends to follow specific patterns or laws over defined intervals of time.
   
2. Structured Alternation: The up-and-down movements of price are not random; they alternate in a structured, periodic manner.
   
   

These assumptions form the foundation for analyzing price action through tools like the Square of 9.

How to Use the Square of 9

Step 1: Identify Key Market Extremes

Begin by locating significant highs or lows on a price chart. These extremums act as the starting point for your calculations.

Step 2: Calculate Calendar Days

Count the number of calendar days between:

• Two highs,
  
• Two lows, or
  
• A high and a low.
  

Step 3: Locate the Number on the Square of 9

Find the calculated number (e.g., 39) on the Square of 9. Then, mark other numbers that lie on the same angle or corner, such as 67, 105, or 150.

Step 4: Predict Turning Points

Mark these numbers as potential future dates. On these dates, observe the market closely for signs of reversals or continuations.

Practical Example

Now let's Analyse GOLD. In this example we will take a daily candle that is making an all time high. From that high we will count the very next extreme high or low. How many trading days it takes to reach that price point and make a reversal? - 40 Trading days.


Now we will look for the number 40 in Gann square of 9 table. and the very next probable execution or reversal we will get after 70 days according to the table.



We see sharp price movement after 70th day and then at 180th day where we can place our order and execute with other confirmations.






Benefits of Using the Square of 9

1. Enhanced Timing: Pinpoint potential reversal dates, helping traders refine entry and exit strategies.
   
2. Objective Forecasting: Use a structured approach to reduce emotional decision-making.
   
3. Improved Accuracy: Combine the Square of 9 with other technical tools for more reliable predictions.
   

Conclusion

The Square of 9 is a powerful tool for traders who seek to integrate time and price analysis into their strategies. By understanding its mechanics and applying its principles, you can anticipate market turns with greater confidence.

As with any trading tool, practice and observation are essential. Study past market movements using the Square of 9 to develop your intuition and skill. With dedication, you’ll unlock the potential of this fascinating method and take your trading to the next level.