Squaring Price and Time

Introduction

Squaring price and time is one of Gann's most famous ideas. It means that when a movement in price equals a movement in time (in the chosen units), the market is "in balance" and a change in trend is likely. This lesson explains the three main ways Gann squared price with time.

Method 1: Squaring the Range with Time

Take the range between the extreme high and extreme low of a move. When the number of time units (days, weeks or months) from the top or bottom equals the range (in your chosen price units), watch for a change in trend.

Example (Illustrative): A stock falls from Rs 540 to Rs 450. The range is Rs 90. Using Rs 1 = 1 day, watch for a change in trend around 90 days from the top. Using a weekly chart, watch around 90 weeks as a bigger cycle.

Method 2: Squaring Time with the Low Price

Gann said that when the time from a major bottom equals the bottom price (in chosen units), a change in trend is likely.

Example (Illustrative): A stock makes a major low at Rs 144. Watch for important changes around 144 days, 144 weeks or 144 months from that low. For higher-priced stocks, scale the price, such as Nifty at 7,200 considered as 72 (dividing by 100), so watch 72 days, weeks or months.

Method 3: Squaring Time with the High Price

Similarly, when the time from a major top equals the top price (in chosen units), a change in trend is likely.

Example (Illustrative): A stock tops at Rs 180. Watch around 180 days (about six months) and 180 weeks from the top. Since 180 days is also half a year, this date is doubly important.

Scaling for Indian Prices

For stocks and indices with high prices, traders scale the price by dividing by 10, 100 or 1,000. For example:

• Nifty 24,300 can be considered 243 or 24.3.
• A stock at Rs 1,350 can be considered 135.

Test different scales on past data to see which ones match actual turning points.

Squaring with the 1x1 Angle

The 1x1 angle from Course 2 is itself a squaring line: price moves one unit for every one unit of time. When the price crosses the 1x1 angle, price and time are squared at that moment.

Why Squaring Matters

Gann said that when price and time are squared, the move has completed its natural balance, and the trend is likely to change. The market may reverse or begin a sideways phase.

Plan with GoPocket

For each major top and bottom in your GoPocket watchlist stocks, calculate the three squaring dates. Mark them on your calendar. When a date arrives and the stock is also at a Gann price level, watch the chart closely for a reversal and act with a stop-loss.

Frequently Asked Questions

Does squaring give the direction of the move?

No. It tells you a change is likely. The direction depends on the trend going into the date.

Is squaring exact?

Allow a small window. Gann's time points often vary by a few days.

Key Takeaways

• Square the range, the low price and the high price with time.
• Scale high prices to smaller units for time counts.
• Squared price and time often mark trend changes.

Disclaimer: Illustrative examples. Not a forecast.