Chapter 8 | 2 min read

One-Third and Two-Thirds

Introduction

After dividing a range by 8, Gann said the next important step is to divide the range by 3 to get the one-third and two-thirds points. He called these levels very strong, especially when they fall near other resistance levels.

How to Calculate

  • Range = High - Low
  • 1/3 level = Low + (Range / 3), or 33.33% of the move
  • 2/3 level = Low + (Range x 2 / 3), or 66.67% of the move

Why Thirds Matter

Many strong trends retrace only one-third before continuing. Weaker trends retrace two-thirds. If a stock retraces more than two-thirds, the move is likely fully reversing.

Complete Gann Level Set

Combining eighths and thirds gives the full Gann retracement set:

12.5%, 25%, 33.33%, 37.5%, 50%, 62.5%, 66.67%, 75%, 87.5% and 100%.

Example: Stock Rally and Pullback (Illustrative)

Maruti Suzuki rises from Rs 10,500 to Rs 12,900. Range = Rs 2,400.

  • 1/3 retracement from the top: 12,900 - 800 = Rs 12,100
  • 1/2 retracement: 12,900 - 1,200 = Rs 11,700
  • 2/3 retracement: 12,900 - 1,600 = Rs 11,300

Reading the pullback:

  • If Maruti holds near Rs 12,100 (1/3), the trend is very strong.
  • If it holds near Rs 11,700 (1/2), the trend is normal.
  • If it falls to Rs 11,300 (2/3), the trend is weak.
  • If it closes below Rs 11,300, the uptrend may be over.

Division of the Highest Price

Gann also divided the highest selling price of a stock (from zero) into eighths and thirds. For example, if a stock's all-time high is Rs 2,400:

  • 1/2 = Rs 1,200
  • 1/3 = Rs 800 and 2/3 = Rs 1,600
  • 3/8 = Rs 900 and 5/8 = Rs 1,500

These levels often act as major support after big crashes.

Percentages from the Lowest Price

Similarly, Gann measured percentage rises from a major low: 25%, 50%, 100% (double), 200% (triple) and so on. A stock that doubles from its low often meets resistance at that level.

Example: A stock bottoms at Rs 250. Watch Rs 312.50 (+25%), Rs 375 (+50%) and Rs 500 (+100%) as resistance levels.

Apply on GoPocket

For every stock you trade on the GoPocket app, create a small table of 1/3, 1/2 and 2/3 retracements of the latest swing. When price reaches one of them, look for a reversal candle and plan a trade with a stop-loss just beyond the level.

Frequently Asked Questions

Which is stronger: 1/3 or 3/8?

They are close together (33.33% and 37.5%). Treat the area between them as one support zone.

Do these levels work on intraday charts?

Yes. Many traders apply them to the previous day's range on Nifty and Bank Nifty.

Key Takeaways

  • Divide the range by 3 for strong 1/3 and 2/3 levels.
  • Shallow pullbacks show strong trends.
  • Also divide the highest price and measure percentages from the lowest price.

Disclaimer: Illustrative prices. Not a recommendation.