For any analysis of markets you should follow Top to Down Analysis. This means from higher time frame to lower time frame. For short term trader to scalper it will be prudent to start from weekly time frame to lower time frame to your trading time frame.
Gann used weekly charts for analysis and said weekly is the most important timeframe to watch.
Swing trading was prevalent in his time so the use of weekly charts. BTrend change can e identified easily on weekly high and weekly lows breach or breakouts. Trading within the estalished range is the safest way to trade. This is called trading the range.
Now there are three methods in Gann Trading Systems from where you can calculate future resistance levels. One is the low, Second is the high and Third is the range. We use the range commonly as the market price is within the significant trading range.
Let us come to SBIN weekly chart. We use the Covid Higha and Low range as a significant range for analysis. High was 373.80 and Low was 150.85. Using this as our 100% range we derive the desired resistance and support levels within this 100% range. We expand on upside and downside as per the price action observed out of the range.
SBIN has expanded on the upside above 100% range which is seen on chart as 0 to 1.
Next expansion will be 1 to 2, 2 to 3 and so on. Current Price is between 2.125 and 2.25 level on chart which means 2 to 3 range. Most important level in this range is 50% of the range which is 2.5 on the chart. Price at 2.5 level on chart is 710.30 which can act as a big resitance in future. Strength of the trend will enhance aove this level.
Now below 2.5 next important is 2.33 level of 672.85 on chart. Below it 2.25 level on chart is 654.25. The high on SBIN is at 660.40. We need to close above this level on weekly chart and stay above this level for the trend to continue upwards. Also support at 2.25 level of 626.20 needs to be maintained by SBIN. Current weekly close is 633.60 above the 2.25 level of 626.20.
613 is another level to watch on closing basis on the downside for short term traders and 672 is resistance for short term traders.
In Gann we do not use indicators for confirmation as Price is the main indicator but Time is the most important indicator. We will learn about Time Analysis in future updates.
Happy Trading !!!
Gann used weekly charts for analysis and said weekly is the most important timeframe to watch.
Swing trading was prevalent in his time so the use of weekly charts. BTrend change can e identified easily on weekly high and weekly lows breach or breakouts. Trading within the estalished range is the safest way to trade. This is called trading the range.
Now there are three methods in Gann Trading Systems from where you can calculate future resistance levels. One is the low, Second is the high and Third is the range. We use the range commonly as the market price is within the significant trading range.
Let us come to SBIN weekly chart. We use the Covid Higha and Low range as a significant range for analysis. High was 373.80 and Low was 150.85. Using this as our 100% range we derive the desired resistance and support levels within this 100% range. We expand on upside and downside as per the price action observed out of the range.
SBIN has expanded on the upside above 100% range which is seen on chart as 0 to 1.
Next expansion will be 1 to 2, 2 to 3 and so on. Current Price is between 2.125 and 2.25 level on chart which means 2 to 3 range. Most important level in this range is 50% of the range which is 2.5 on the chart. Price at 2.5 level on chart is 710.30 which can act as a big resitance in future. Strength of the trend will enhance aove this level.
Now below 2.5 next important is 2.33 level of 672.85 on chart. Below it 2.25 level on chart is 654.25. The high on SBIN is at 660.40. We need to close above this level on weekly chart and stay above this level for the trend to continue upwards. Also support at 2.25 level of 626.20 needs to be maintained by SBIN. Current weekly close is 633.60 above the 2.25 level of 626.20.
613 is another level to watch on closing basis on the downside for short term traders and 672 is resistance for short term traders.
In Gann we do not use indicators for confirmation as Price is the main indicator but Time is the most important indicator. We will learn about Time Analysis in future updates.
Happy Trading !!!
Comment:
Trend is down as we have a lower high and lower low on SBIN...on the weekly chart...we need a higher high and higher low for a CIT( change in trend)...