Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

fastbrokers

Utilizing Fibonacci Retracements with Gann Fans

Recommended Posts

A common question traders have is, what are some good tools for finding support and resistance levels? Nowadays, even the most basic retail charting platforms come loaded with tools used to find these key areas. Unfortunately, many traders are not sure how to use these tools correctly and more importantly; how to implement and combine these powerful tools. Using these tools on their own will help you identify areas of support and resistance. Using these tools together drastically increases the probability of a confirmed breakout and a big move. We will look at 2 of these tools in this article, Gann Fans, and Fibonacci retracements. We will also look at volume as a confirming factor.

 

Gann Fans

 

William Delbert Gann was born outside of Lufkin, Texas in 1878. Gann was a financial genius, he started trading at the age of 24 and accumulated a fortune worth over $50 million. Gann developed many trading philosophies using a variety of methodologies. His works have been published for nearly 100 years and are still very much relevant. Gann’s most well known contribution to the trading world is the Gann Fan. The Gann fan is made of a series of angles drawn from a pivot high or a pivot low. The most important of these angles is the 1x1 angle. The 1x1 angle is a 45 degree angle in an uptrend and 315 degrees in a down trend. Below is an example of a Gann Fans.

 

SP32-20100528-085249.gif.86f2e6f0e3faf88dc05079fcf3c5dc45.gif

 

As you can see, the price trends up to the 1x1 angle very closely and when it breaks the trend line we have a nice move. The other angles of the fan are important however the key angle is the 45 degree 1x1 angle. Using a Gann fan is a good way to find support, however using only a Gann fan can lead to false breakouts and head fakes. Gann fans should be used in conjunction with other drawing tools to find the areas with the highest probability of predictable price movement.

 

Fibonacci Retracements

 

Leonardo Fibonacci was an Italian mathematician who is most famous for his work with number sequences. The Fibonacci sequence is 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55… The sequence adds the two previous numbers together to get the next number and so on and so on. By dividing the last two numbers of the sequence, i.e. 34/55=61.8 we get the 61.8% ratio. Often referred to as the “golden” ratio, many prominent scientists and mathematicians have spent decades examining the ratio and how it applies to nearly everything from the swirls on a Conch shell to the distance between stars. As the numbers in the Fibonacci sequence increase, dividing the last two numbers in the sequence gets closer and closer to 61.8%. The other ratios are found by dividing alternative numbers of the ratio, i.e 21/55=38.2. This is a very popular tool for finding key support and resistance. Drawn from a swing high to a swing low, the Fibonacci ratios give 2 key areas of support and resistance; the 61.8% retracement and the 32.8% however most Fibonacci tools will have the 50% ratio as well even though it is not derived from the Fibonacci sequence. Below is an example of Fibonacci and Gann used together to spot key areas of support and resistance. These areas are used to confirm breakouts and also should be used to place stop loss and take profit levels.

 

SP32-20100528-085301.gif.ccebc499626061308d562b086d0a8768.gif

 

Volume

 

Another important tool for identifying meaningful breakouts is volume. Volume is important because many times a move on weak volume will appear to be a breakout, and not follow through. Using any of these tools alone will give you some idea of where moves will happen. Using these tools together will give a much higher probability of confirmed breakouts and meaningful gains. On this chart there is a head fake move up on light volume, followed by the breakout down on rising volume. As you can see, using any one tool on its own may have lead to taking the trade too early and getting stopped out. But when we put all three of these tools together we have a much higher probability of finding good breakouts and more importantly avoiding head fakes.

 

SP32-20100528-085310.gif.a26b0481c49cb61058ddee5b6f323e17.gif

 

In the above example, there are many things going on. The first move is the 50% retracement that also coincides with the 1x1 Gann line for an area of strong resistance. As the price begins to retest the first retracement it breaks the 1x1 Gann line on declining volume. The result is a failure to break through the 38.2% retracement. As the price falls on rising volume it breaks through the original support but the 1x1 Gann line serves as new support and the price does not break it.

 

Summary

 

Traders should be aware of these key levels for several reasons. The theory of technical analysis is based on the idea that many people looking at the same information will come to similar conclusions, basically the only reason it works is because enough people believe it does. Using these technical levels can give you a better chance of spotting the meaningful breakouts that lead to nice gains. These tools are not limited to any one financial market and can be applied to futures, forex, equities etc… There are many more tools for finding support and resistance however these are two of the more popular ones and therefore should be understood and considered. Volume is also very important to confirm the Gann and Fibonacci levels because light volume moves tend to reverse quickly stopping traders out before the big move. Using these tools together will help you identify the areas for big moves and help to set yourself up for success.

 

 

Jesse Richards

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • PLTR Palantir Technologies stock watch, consolidation at the 81.29 triple support area at https://stockconsultant.com/?PLTR
    • WMT Walmart stock watch, big pullback to 84.84 support area with high trade quality at https://stockconsultant.com/?WMT
    • AXSM Axsome Therapeutics stock watch. pullback to 120.5 gap support area with bullish indicators at https://stockconsultant.com/?AXSM
    • Date: 14th March 2025.   Gold Surges Past Record High as Market Volatility Persists.     Gold Surges Past Record High as Market Volatility Persists Gold surged towards $2,994 per ounce, surpassing its previous high set on Thursday. With a 2.6% rise this week, gold is on track for its most significant gain since November. Meanwhile, gold futures in New York comfortably exceeded the $3,000 mark, reflecting strong investor sentiment toward the precious metal. The robust performance of gold this quarter extends its strong annual rally in 2024. Market uncertainty, exacerbated by the US administration’s aggressive trade policies, has dampened risk appetite for equities, pushing the S&P 500 into correction territory this week. Central bank purchases increased ETF inflows, and bullish forecasts from major banks have further fueled gold’s ascent. Trade Tensions and Market Impact Former President Donald Trump escalated trade tensions by proposing a 200% tariff on European alcoholic beverages, including wine and champagne. Additionally, he reaffirmed his stance on retaining tariffs on steel and aluminium and signalled that reciprocal tariffs on global trade partners could take effect as early as April 2. As we approach the second quarter, reciprocal tariffs could drive another wave of market turbulence, solidifying gold’s appeal as a safe-haven asset. Gold and Equity Market Reactions The upward momentum in gold has also lifted mining stocks, with Australia’s Evolution Mining Ltd. reaching an all-time high. Global holdings in gold-backed ETFs increased to 2,687 tons, marking the highest level since November 2023. Analysts at major banks remain bullish on gold’s trajectory. Macquarie Group recently forecasted a potential spike to $3,500 per ounce in Q2, while BNP Paribas revised its outlook to show gold prices consistently above $3,000. Gold traded at $2,983.50 per ounce in the Asia session, reflecting a 14% year-to-date gain. Meanwhile, silver edged lower after nearing $34 per ounce, while platinum and palladium recorded gains.     US Stock Market Recovery Amid Uncertainty After a sharp sell-off, US stock futures rebounded. Futures tied to the Dow Jones Industrial Average rose 0.4%, while S&P 500 and Nasdaq Composite futures gained 0.6% and 0.8%, respectively. Despite the slight recovery, Wall Street remains on edge following the S&P 500’s descent into correction territory. Trump’s firm stance on tariffs has added to market concerns. During a meeting with NATO’s secretary general, he dismissed any possibility of easing trade restrictions, acknowledging that further market disruptions may lie ahead. Government Shutdown and Economic Indicators Adding to the economic uncertainty, a potential US government shutdown loomed over Wall Street. However, a breakthrough emerged late Thursday as Senate Minority Leader Chuck Schumer signalled a willingness to advance a Republican-led stopgap spending bill. Today the University of Michigan’s consumer sentiment survey is expected to shed light on how consumers are coping with inflation and trade disruptions. Last month’s report indicated weakening economic confidence, which could have further implications for spending trends. Asian Markets Rally Amid China’s Economic Stimulus Asian stock markets saw a strong performance this morning, brushing off Wall Street’s losses. Chinese stocks surged after state-run banks and financial institutions were instructed to support consumer spending. Hong Kong’s Hang Seng Index jumped 2.5% to 24,038.85, while the Shanghai Composite Index gained 1.9% to 3,420.65. In Tokyo, the Nikkei 225 added 0.9%, while Australia’s ASX 200 climbed 0.6%. China’s National Financial Regulatory Administration issued directives aimed at boosting consumer finance, including encouraging credit card usage and providing support for struggling borrowers. Economists, however, argue that broader reforms—such as wage growth and enhanced social welfare—are necessary for sustained economic recovery. Wall Street’s Struggles Amid AI Stock Declines Despite positive economic data, including lower-than-expected wholesale inflation and strong job market indicators, stock market turbulence continued. AI-related stocks, which have been at the forefront of market gains, faced renewed pressure. Palantir Technologies fell 4.8%, Super Micro Computer dropped 8%, and Nvidia fluctuated before closing 0.1% lower. Tesla also struggled, declining 3% and extending its 2025 losses to over 40%. In contrast, Intel shares soared 14.6% after announcing Lip-Bu Tan as its new CEO. Oil Prices and Currency Movements In commodities, US crude oil prices rose by $0.46 to $67.01 per barrel, while Brent crude increased by $0.44 to $70.32 per barrel. The US dollar strengthened to 148.63 Yen, while the Euro dipped slightly to $1.0845. Conclusion Market volatility remains high as investors navigate shifting trade policies, inflation concerns, and economic uncertainties. While gold continues to shine as a safe-haven asset, equity markets face persistent headwinds. As geopolitical and economic developments unfold, traders and investors must remain vigilant in the days ahead.   Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Andria Pichidi HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • ItuGlobal: Our Latest NETELLER VIPs 2025 ITU GLOBAL VIP Members’ Rewards Every calendar year, we choose 2 customers to become our VIPs. They’ve permanently special status with us and they can fund/withdraw Neteller through us, at parallel market rates, whether they open brokerage accounts through us or not.   These are people who funded with the highest amount of Neteller, and who also withdrew the highest amount of Neteller through us.  They would be announced in January each year and added to our list of VIPs. ItuGlobal: Our Latest NETELLER VIPs 2025 Adetoye Oyebanji Babalola: Adetoye O. has started selling large quantities of Neteller to us since the very beginning of our company’s existence. He also sold Perfect Money to us many times, when PM was still available in Nigeria. Besides, he has given us a lot of helpful business advice, which has proven to be invaluable to us. He deserves to become our VIP. Isiaka Adekunle Mohammed: He is a constant buyer. Buying e-currencies and also funding his Instaforex account through us. We thank Isiaka A. for his trust in us and wish him the best in everything he does. Abiodun Lawanson: This is an avid buyer and seller of Neteller. He buys and makes profits and sells back to us. Sometimes when we are not online, he will send an offline message and we will process his order once we come back online. He has thus become our VIP. Source: Ituglobalfx.com.ng  
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.