How The Gann Wheel Is A Pivot Calculator

Few people can continue to capture the imagination of stock market and futures market technical traders for more than a century in the way that W.D. Gann has, and continues to do to this day.

Gann Theory and many of its aspects are not for trading newbies or even for the quants who take comfort in the esoterica of momentum studies based on actual stock and commodity pricing, but stop short of passing through the door that leads to technical studies grounded on seemingly unrelated things like the degrees of a circle.

Almost everybody who has investigated Gann analysis and Gann theory has heard of the Gann Wheel but only a very few understand the logic underlying its construction or how it works.

This article explains two subtle concepts of the Gann Wheel that remain hidden behind what appears to be a simple table of consecutive numbers.

The image to the right is excerpted from the center of the larger image of the Gann Wheel at the top of the page. In its most simple terms the Gann Wheel, or Square of Nine Chart as it is also called, is a table of consecutive numbers that increase in magnitude in a counterclockwise direction.

Most wheels have 0 or 1 at the center, but you could start with any number so long as the succeeding numbers increased counterclockwise around the table.

So how does it work, and why did William D. Gann call this rectangular table of numbers a wheel?

You can follow along better if you have a calculator that does square roots.

You can see from the table that the number 34 is directly above the number 15 on the table and that the number 23 occupies the same space (relative to the center) on the table as the number 15.

The numbers 34 and 23 are related to the number 15 by their squares and their square roots.

The square root of 15 = 3.87. If you add 2 to the square root of 15 and square the result you get 34.49, which rounded down is 34.

If you add 1 to the square root of 15 and square the result you get 23.74 which rounded down to the nearest integer is 23.

What is hidden beneath the surface is that the numbers on the Gann Wheel, or more correctly the position of the numbers on the Gann Wheel are related to each other by their square roots.

If you add .5 to the square root of 15 and square the result you get 19. When you draw a line from 15 to the center of the table and then extend the line to the number 19 you get a right angle, or 90 degrees.

The number 34 is in the same position as the number 15 and one level higher in the table. We say that the number 34 is 360 degrees from the number 15 because you make a complete rotation of 360 degrees around the table.

The number 23 is on the same level as the number 15 but in the opposite quadrant on the table. We say that the number 23 is 180 degrees from the number 15.

From these few examples you can see how the positions of the numbers in the table can also be related to each other by using the analogy of a circle of 360 degrees.

The full answer to that question is well beyond the scope of this article and needs a book to explain how Gann did that. If that is something you are interested in you can read this ebook How to Trade the Square of Nine With a Pencil and a Calculator.

This is the quick conceptual overview. The numbers in the Gann Wheel, or Square of Nine, are just that - numbers. They can represent either price or time. Doesn't matter. WD Gann used the Square of Nine to determine when price "squared" with a prior price (usually a major high or low pivot) or when time squared with time, or when price squared with time.

For Gann the most important angles for the stock market were 90, 180 and 360 degrees. These are the same geometric angles of a square. You can see where Gann got the descriptive phrase from.

Hopefully, the information you received here will also help you understand how those so called "Gann Angles" can be determined.

You can read more about the Gann Wheel and how to use it as a Pivot Calculator here.