Manual Gann Square

Here are the step by step directions for creating a Gann Square manually in Metatrader 4. It's actually doable in any charting software that has trend lines and preferably a static cycle tool or bar counter.

Background
The Gann Square or Master Chart is a geometric chart dividing a square into 4th's and 3rd's horizontally, vertically, and diagonally. The standard square is typically a perfect square. IE a Square of 90 is 90 bars x 90 points. However, not all trading instruments and time frames work out to be perfect 1 to 1 price to time relationships. Moreover, applying other Gann techniques such as squaring a range of price and/or time can yield good results as well. So adjustments are perfectly allowed.

Usage
My usage of the Gann Square is to divide time and price on also create a 3rd axis in space. The vertical lines divide time, the horizontal divide price, and the angles divide space. The play is to watch price reaction at intersections of price and time, price and angles, time and angles, or all 3. Horizontals and angles will more often than not create support resistence. The 1x1 lines are the balance lines. Price tends to gravitate towards the 1x1 lines.

Construction
Constructing the Gann Square is actually really simple. No more difficult than connecting the dots. Only our dots are evenly spaced around the square.

Step 1: Determine the starting point and square size. The starting point is usually from a signicant swing high or low. For double tops/bottoms, try both and see how things look. Try to avoid picking spots out of consolidation. It's also advisable to choose a spot that has enough price action to the right to get an idea how valid the square size is as it's being built. If the first few lines added have no correlation to price action whatsoever, choose a different square size.

There are many ways to determine the square size. Gann numbers such as 360, 90, 144, 52, etc., all work well. These can be days, bars, degrees, or whatever measuring device suits your fancy. All will work because of the harmonic nature of charts. But ideally, one is chosen that fits the data profile. For example, it may not be practicle to choose a 360 hour x 360 pip square for data that swings 600-700 points in a move for the time frame. In that case, 360 hours is probably fine, but the heighth could be adjusted for the more recent price range. Or adjusted to the nearest whole circle number which would be 360 x 2 or 720. Or by degrees from the square starting point which might be 90° on the square of nine as the most appropriate price range. Again, there are no hard rules. 39 x 42 is perfectly acceptable. (Any square will work imho because anything divided evenly will yield proportion within itself. As long as the square starts from the right point, that self proportion should still correlate because price moves are nothing but various degrees of proportion.)

For this example I chose a range of price for the height. For the width I chose 360 bars. I use the MT4 cycle tool to measure out 360 bars from my swing high. In MT4 it's important to use the cycle tool because MT4's chart scaling is different on the empty space right of the price area. This creates a lot of charting issues when dealing with visually "squared" charts. If a verticle line is used, it will move out of proportion. What started out at 360 bars out will end up creaping up and up around 315 bars out as time advances. The cycle tool will stay consistent.



Step 2: Divide the square. The next step is to divide the square into 4ths. I start by taking the cycle tool and shortening up the cycle. So 360 now becomes 90 with the fourth line being the last line. From there, I draw in 45° trend lines from corner to corner. Where the 45° lines intersect the verticle lines are where the horizontal lines will go.



I also divide the square into 3rds. Add another cycle tool and adjust it to divide the square vertically. 360/3 = 120. I typically change the line style to dots or dashes. Where the 1/3 verticle lines intersect the 45° diaganol lines are where the 1/3 horizontals go. I also set these lines to dots or dashes.



Step 3: Add more angles. Additional angles are drawn in connecting the corners to the mid point of the square boundaries. In other words, from the top left corner, a line is drawn to the 4th verticle at the 2nd horizontal. Another line is drawn from the top corner to the 4th horizontal and 2nd verticle. Repeat for four corners.



Lines connecting the mid points to the other mid points are added. I usually dot or dash these. The square is now complete.





Validation
It's important to validate the square. As mentioned in step 1 it's important to have sufficient price action to the right of the square start. Ideally, it was easy to validate things as the square was built. Validation is simply observing how price reacts at horizontals as support/resistence, at verticles as price reversal/acceleration points, and at the angles as support resistence.

The chart below has highlights on where price was relating to the square. The hits aren't dead on exact in terms of support/resistance, but the first vertical line was a hit and the 2nd vertical is shaping up as a good hit. Also note that smaller squares can be created and divisions of those squares will typically yield hits. The upper left corner shows an additional division line where two angles intersect. Any intersections should always be observed as possible reaction points.




Conclusion
The Gann Square is a great tool for measuring price and time and can encompass many Gann techniques. I find the tool invaluable not only as a timing device but a device that saves time hunting down price reaction areas. I mean which is easier... glancing at a Gann Square or working up a Square of Nine? Circles and additional squares can also be added to create even more levels of harmonic proportion. I'll update as this square plays out. Based on the hits so far, this square should result in some finding some good trades.

Edit: I'd also like to add that drawing the squares by hand is a good mental exercise. It focuses the mind on a single purpose of syncing to the vibration of the chart. It also trains the eye to see proportion on a naked chart. After enough practice, you'll be able to eye ball a chart and guesstimate where all of the lines are based purely on price re-action points. The eye and mind seek harmony and proportion just as the ear seeks harmony and melody.