Price = Time squared or P = t ^ 2
For additional information and treatment of this mathematical relationship, please read my 'Time and Price' article. This relationship gives us the needed mathematics for automatically calculating the slope for the 1x1 Gann angle.
To calculate the slope of the 1x1 line, two prices are needed, and a time interval. The first price P1 will be the price on the chart where the 1x1 line (or Gann Fan) is anchored. Usually this is the top or bottom price of a significant trend. The time interval is calculated from P1 by normalizing P1 to fall in the range of 100 to 999. If P1 is below 100, multiply it by 10 as many times as needed until it is in the range of 100 to 999. If P1 is at or above 1000, repeatedly divide it by 10 until it is in the range of 100 to 999. Then the time interval t is found by taking the square root of P1.
Gann's Square of Nine is used to determine the 2nd price P2. P2 is related to P1 by some degree of rotation around the Square of Nine. The commonly used degrees of rotation are 360, 180, 90, and 45 degrees. P2 can be calculated using this formula:
P2 = ( t + degrees of rotation / 180 ) ^ 2
Remember, the time interval t was determined by taking the square root of the normalized price P1. Example: If the trend top or bottom price is $144.00, then the time interval is 12 bars. To find the price that is 180 degrees around the Square of Nine, P2 would be ( 12 + 180/180 ) ^ 2, which equals 13 squared or $169.00.
The slope of the 1x1 line is calculated using this formula:
slope = ( P2 - P1 ) / t
Continuing the example, slope = ($169.00 - $144.00) / 12 bars, which equals $2.08 per bar. If the 1x1 line determined in this manner is too steep to be useful on the chart, then it is appropriate to use a smaller degree of rotation around the Square of Nine, such as 90, 45, 22.5, or 11.25 degrees, etc. If the 1x1 line is too flat to be useful on the chart, then it is appropriate to use a higher degree of rotation such as 360 or 720 degrees.
For additional information and treatment of this mathematical relationship, please read my 'Time and Price' article. This relationship gives us the needed mathematics for automatically calculating the slope for the 1x1 Gann angle.
To calculate the slope of the 1x1 line, two prices are needed, and a time interval. The first price P1 will be the price on the chart where the 1x1 line (or Gann Fan) is anchored. Usually this is the top or bottom price of a significant trend. The time interval is calculated from P1 by normalizing P1 to fall in the range of 100 to 999. If P1 is below 100, multiply it by 10 as many times as needed until it is in the range of 100 to 999. If P1 is at or above 1000, repeatedly divide it by 10 until it is in the range of 100 to 999. Then the time interval t is found by taking the square root of P1.
Gann's Square of Nine is used to determine the 2nd price P2. P2 is related to P1 by some degree of rotation around the Square of Nine. The commonly used degrees of rotation are 360, 180, 90, and 45 degrees. P2 can be calculated using this formula:
P2 = ( t + degrees of rotation / 180 ) ^ 2
Remember, the time interval t was determined by taking the square root of the normalized price P1. Example: If the trend top or bottom price is $144.00, then the time interval is 12 bars. To find the price that is 180 degrees around the Square of Nine, P2 would be ( 12 + 180/180 ) ^ 2, which equals 13 squared or $169.00.
The slope of the 1x1 line is calculated using this formula:
slope = ( P2 - P1 ) / t
Continuing the example, slope = ($169.00 - $144.00) / 12 bars, which equals $2.08 per bar. If the 1x1 line determined in this manner is too steep to be useful on the chart, then it is appropriate to use a smaller degree of rotation around the Square of Nine, such as 90, 45, 22.5, or 11.25 degrees, etc. If the 1x1 line is too flat to be useful on the chart, then it is appropriate to use a higher degree of rotation such as 360 or 720 degrees.
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