Abstract: In the advanced application of Gann Spiral Square, what effect can be produced by the combination of square, magic number and square number, and how can it help trading?
The Practical Significance of the Gann Square in Trading
The author is in One article to understand the Gann Spiral Square, the production method and practical application As mentioned in the article, the Gann Square is a spiral shape, adding a base number in a counterclockwise direction until infinity. The numbers in the center of the Gann Spiral Square, the crosshairs and the diagonal lines may be the price levels where the market has an important turning point.
Its practical significance lies in that important support and resistance levels will appear on the price level on the vertical axis of the square, the price level on the horizontal axis of the square, and the price level on the diagonal line of the square.
As shown above, we can place periodic highs or lows at “1” position, and then set the unit of each price rise or fall, and gradually add it to find the important support and resistance of the trend price in the future. For details, please refer to the content of the previous article.
Gann Spiral Square and Square
If you understand the role of the Gann Spiral Square in the trading process, how to find the position of trend turning more effectively becomes an advanced application of the Gann Spiral Square. As shown in the figure above, it is not difficult to find that 1.9,25,49,81,121,169are on the same diagonal of the spiral quadrilateral. Interestingly, the above numbers are all Fibonacci numbers — the magic number squared.
Author’s Note:Fibonacci sequence general term formula: Fibonacci sequence refers to such a sequence:1,1,2,3,5,8,13,twenty one from the3Each term is equal to the sum of the previous two terms.
Therefore, we can draw two conclusions:
1. If a large-scale uptrend starts at a certain price, then the uptrend may end at the square of this price;
2. If a large-scale downtrend starts at a certain price, then the end of the downtrend may be the square root of that price;
EUR/Dollar2008Rising and falling trend of the year:
Pictured above is the euro/USD to2008The trend of the year, if we take the2008year high1.0638is the stage high, and its square root is1.2664which is very close to the actual low level; while the low level1.2329The square of1.5200also with the euro/The dollar’s subsequent rally highs were not far behind. The above example is a good proof of our two conclusions above, proving the power of the square and square resultant force.
In addition, we can also use the square and magic numbers to make reasonable expectations for important support, resistance and potential reversal points in the future trend.Specifically, we can choose a meaningful low or high for a variety, plus each squared number multiplied by a conversion factor0.1which calculates the major support and resistance of the market.
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