Understanding Gann Price and Time Cycle

In Continuation with Previous Article W.D. Gann Trading Techniques – I and Gann trend following techniques

365 days is an important cycle of one year. In a circle there are 360 degrees which very nearly correspond to this cycle. In other words, one day is equal to one degree of the circle that the earth makes around the sun. Hence the significance of the important divisions of the circle (into angles) on the chart. These angles are 45, 90, 120, 135, 180, 225, 240, 270, 315 and 360.
Dividing a line parallel to the 90 degree division of the circle we get a square. Divisions of this square gives important angles on the charts.
There are two kinds of cycles:

• Time cycle or natural cycles and
• Cycles derived from the significant prices.

And these cycles will have important divisions on 1/8, 1/4, 1/3, 3/8, 1/2, 5/8, 2/3, 3/4 and 7/8. Thus the 30 year time cycle will be divided into important probable turning points as follows:
1/8 - 3.75 years
1/4 - 7.5 years

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