Investing & Trading

Major Gann Levels Study

By Samantha Baltodano


TL;DR:

The Major Gann Levels study is a tool used by traders to predict future price movements in the stock market. It helps identify four major levels of support known as G1, G2, G3, and G4. 


G1 is at 50% retracement, G2 is the midpoint between all-time high and all-time low, G3 is at 75% retracement, and G4 is the strongest level of support. 


Traders should use Gann levels in conjunction with other technical analysis tools for better decision-making.


What Is The Major Gann Levels Study?

Have you ever heard of a Gann indicator? 


It's a tool used by traders to predict future price movements in the stock market. It's based on the theory of W.D. Gann, who believed that prices move in specific patterns and that these patterns can be predicted using mathematical formulas.


The Major Gann Levels study is a part of this theory and it helps traders to identify four major levels of support. These levels are known as G1, G2, G3, and G4. 


Let's explore them in more detail.


G1 is the first level of support and it's located at 50% retracement from the all-time High. This means that if the price of a stock has been increasing for a while and then starts to decline, it might find support at this level. It's like a reset button that could help to renew the upward movement.


If the price of the stock continues to decline and G1 doesn't hold, traders should look for the next level of support which is G2. G2 is the midpoint between the all-time High and all-time Low. This level indicates that the stock is in a downtrend and it might find support here before continuing its decline.


If the stock fails to find support at G2, traders should look for G3 which is located at 75% retracement from the all-time High. This is a strong level of support and it could indicate that the stock is ready to reverse its trend and start increasing in value.


If none of the previous levels of support hold, traders should look for the final level which is G4. G4 is calculated as a quarter of the all-time High-Low range added to the all-time Low. This level is the strongest level of support and it's unlikely that the stock will fall below this level.


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The Major Gann Levels study is a useful tool for traders who want to predict future price movements in the stock market. 


By identifying these levels of support, traders can make better decisions and avoid losses. However, it's important to remember that Gann levels are not perfect and they should be used in conjunction with other technical analysis tools.


Test The Major Gann Levels Study

Great news! 


You can back test this exact strategy on historical data for any of your favorite symbols using TradingView. 


This strategy has already been built and all you have to do is log in and take it for a spin. You can access this indicator here.


If you’re new to back testing and to TradingView, don’t worry. I created a step-by-step guide you can follow to begin testing the Major Gann Levels Study.


Summary

  • The Major Gann Levels study is a tool used by traders to predict future price movements in the stock market.
  • It helps traders identify four major levels of support: G1, G2, G3, and G4.
  • G1 is the first level of support and it's located at 50% retracement from the all-time High.
  • If the stock continues to decline and G1 doesn't hold, traders should look for the next level of support which is G2.
  • G2 is the midpoint between the all-time High and all-time Low.
  • If the stock fails to find support at G2, traders should look for G3 which is located at 75% retracement from the all-time High.
  • If none of the previous levels of support hold, traders should look for the final level which is G4.


Major Gann Levels is just one of many studies that Archaide automates. For a full list of strategies and studies available click here.


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