Intraday Gann Grid Construction

In this blog entry I will show how to come up with degrees of price and time and plot them on an intraday chart using the stock tools in Metatrader 4.

For intraday, the first thing I do is square the chart. ie one unit of price equals one unit of time. To do that, right click on the chart or hit F8. On the lower left, click the box for "Scale Fix One to One". You may have to use the +/- keys or chart zoom to get price to fit in the screen.

Next, find a high or low that you want to use as the zero point. For this example, I'm using a EURUSD 30 minute chart and going all the way back to 6-13-07 10:30. Price for the low is approx. 1.3261. Because this is a low, I want to build the grid going up first.

The price needs to be converted to something useful. Because this is intraday, I drop the decimimal. I then apply the handy price to degrees formula to come up with the next higher 45° price level on the Square of Nine. (In reality, Gann never called it the Square of Nine. His Square of Nine was something entirely different.)

45° Price=((ConvertedPrice^0.5+DegreeFactor)^2)/10000
or
45° Price=((13261^0.5+.25)^2)/10000 = 1.3319

To figure the price level going down the formula is the same except the Degree Factor is substracted instead of added:

45° Price=((ConvertedPrice^0.5-DegreeFactor)^2)/10000

The key component here is the .25. I want 45°. 45° is 1/8 of the circle or .25. 180° would be 1, 360° = 2, etc.

So now I have the price for 45°. Next up is time. For this example I'm using each bar as one degree. So I count out 45 bars and mark it with a verticle line. Now I have the start of price and time and the termination of price and time for the MT4 Gann Grid tool. If your chart has been squared, the Gann Grid tool should now form perfectly square diaganols.

If you like doing the math, calculate the price levels up and down. I don't so I just put horizontal lines at the intersections. Note that if you don't square the chart, the intersection lines will shift in horizontal scale and it will appear that the horizontal lines aren't correct as the chart advances forward or back. They are correct, just not in relevence to the messed up chart scaling. Time will always be correct unless you don't count off your bars right when setting up the first square.

For the time lines, I use the cycle tool and add in the time lines. I also add one more instance of verticle cycles to mark off 360° degrees of time. In this example, I use red.

We now have 45° levels of price and time going out to infinity. The first chart below shows the start. The second chart shows current events. Notice how the levels are still relevent in both price and time. The most recent division of time was Friday's high from the move resulting from the Fed interest rate drop.





This type of chart is also called a Pyrapoint chart and you can read about the Pyrapoint style of usage here: http://www.ensignsoftware.com/help/pyrapoint.htm