Gann Angle Trading Rules

Introduction

Now that you understand how Gann angles work, this lesson gives you practical trading rules based on angles, along with stop-loss placement and examples from the Indian market.

Rule 1: Buy on the 1x1 Angle in an Uptrend

When a stock reacts back to the 1x1 angle from a major bottom and holds, it is a buying opportunity. Place the stop-loss just below the angle.

Rule 2: When an Angle Breaks, Expect the Next Angle

If the price closes below an angle, it usually moves to the next angle below. If it breaks the 2x1, expect the 1x1. If it breaks the 1x1, expect the 1x2.

Rule 3: Regaining an Angle is Bullish

If a stock breaks below an angle and then quickly closes back above it, the break was false and the trend is strong.

Rule 4: Steeper Angles Mean Faster Moves

Gann observed that stocks move faster at higher levels. A stock holding the 2x1 or 4x1 angle is in a very fast trend, but such trends cannot last long. Watch for the price to slow down and fall back to the 1x1.

Rule 5: Combine Angles with Time

A break of the 1x1 angle near an important time period (such as 90 days from the low, or one year from a major top) is a stronger signal. You will learn time periods in the Gann Time Cycles course.

Rule 6: Always Use a Stop-Loss

Place stops just beyond the angle, not exactly on it, to avoid being hit by normal noise.

Example: Complete Angle Trade (Illustrative)

TCS makes a major low at Rs 3,500. Scale: Rs 5 per trading day.

• Day 40: 1x1 = 3,500 + 200 = Rs 3,700. TCS has risen to Rs 3,850 and reacts back.
• Day 44: 1x1 = Rs 3,720. TCS falls to Rs 3,728 and forms a strong green candle.
• Entry: Rs 3,740. Stop-loss: Rs 3,695 (below the 1x1).
• Target: previous high of Rs 3,850 and then higher.
• Day 60: 1x1 = Rs 3,800. TCS at Rs 3,960. Move stop-loss to Rs 3,790.

Example: Angle Break Exit (Illustrative)

You hold a stock bought on the 1x1 angle. On day 70, the 1x1 is at Rs 850 and the stock closes at Rs 842. The 1x2 angle is at Rs 810. Following Rule 2, exit or tighten the stop-loss, because a move to Rs 810 is likely.

When Angles Do Not Work Well

• In sideways markets, prices cross angles back and forth.
• When the scale is wrong, angles do not match turning points.
• After major news, gaps can jump across several angles at once.

Execute on GoPocket

When the stock reaches your calculated 1x1 angle, place a Delivery Limit buy order near the angle on the GoPocket app and a stop-loss order just below it. Update the stop each week as the angle rises.

Frequently Asked Questions

How far below the angle should the stop be?

About 0.5% to 1% below the angle value for most stocks.

Can I trade Nifty options with angles?

You can use angle levels on the Nifty chart to plan trades, but options carry high risk and time decay.

Key Takeaways

• Buy near the 1x1 in uptrends with a stop below.
• A broken angle leads to the next angle.
• Combine angles with time for stronger signals.

Disclaimer: Illustrative prices only. Not investment advice.