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Gann’s Square of Nine By Jason Sidney Gann’s Square of Nine is one of the more exotic tools he incorporated in his trading, and while this is a relatively daunting tool that requires a fare amount of practice to master, it can certainly add a whole new dimension to your analysis. Gann never claimed to be the inventor of this tool; however he certainly developed it and refined it to be used in conjunction with financial markets. The Square of Nine has origins that date back to early Egyptian days
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    Gann’s Square of Nine By Jason Sidney Gann’s Square of Nine is one of the more exotic tools he incorporated in his trading,and while this is a relatively daunting tool that requires a fare amount of practice tomaster, it can certainly add a whole new dimension to your analysis. Gann never claimed to be the inventor of this tool; however he certainly developed it and refinedit to be used in conjunction with financial markets. The Square of Nine has srcinsthat date back to early Egyptian days, and when looking at it one gets the impressionyour actually viewing a pyramid looking down from its very top or apex and thenlooking down further to its actual base. It is said Gann actually discovered the Squareof Nine during his travels in India, which he saw being used as a calculator by tradersin the region selling their goods.Gann being someone with a mathematical mind recognised its value and saw its potential to be used in conjunction with financial markets. He then refined itspecifically for that purpose, and what great job he did!The Square of Nine is mainly used to confirm the significance of recent high and low points in whatever market you might be interested in. It should never be used to pick tops and bottoms; however it can provide additional evidence to help confirm thesignificance of a recent high or low point in the market when a break of trend is thenlater confirmed.The Square of Nine is similar to a wheel or a circle, it starts with the number one inthe centre of the circle and then radiates out to the first square of nine. Starting withthe number two to the left of the centre or the number one. It then spirals clockwise tothe number nine, to form its first rotation around the Square of Nine. This rotationthen continues by shifting one unit to the left of nine and will commence the nextrotation at the number ten and then around to the number twenty. This spirallingexpansion of numbers just continues out until you end up with a grid of numbers,relevant in price to the market your trading.The Square of Nine is essentially a time and price calculator, and calculates the squareroot of numbers, both odd and even numbers as well as their midpoints. It also looksfor both time and price alignments from a specific starting point or price level E.g. asignificant high or low point in a market. If you were to look at the numbers on thegrid running down to the bottom left hand corner on the Square of Nine, you will findthey are the square root of odd numbers E.g. 5x5 = 25. If you were to look at thenumbers running up to the top right hand corner on the Square of Nine you will findthey are the square root of even numbers e.g. 4x4 = 16. If you then look at thenumbers running down to the bottom right hand corner on the Square of Nine youwould find the midpoint between the squares of odd and even numbers. Using thenumbers 16 and 25 as an example of our odd and even numbers you will find thenumber 21 representing their midpoint.   The numbers that fall on the blue lines form what’s known as the “Cardinal Cross”and the numbers that fall on the red lines running into the corners of the square, formwhat’s known as the “Ordinal Cross”. Any numbers that fall on these lines are said toact as significant support and resistance levels. So the Square of nine is an interestingarrangement of numbers that have a specific order and can be used in many differentways.The interesting thing is that with the use of a simple Excel spreadsheet you can alsochange the value of the middle or centre number to represent the exact value of anactual high or low price for whatever market you’re interested in. This number can bea positive number for lows which will spiral upwards in price or a negative number for highs which will spiral downwards in price. In this example I’m going to be usingthe all time high of the Australian SPI 200 as the middle number in the centre of thesquare which is 3500, and it occurred on the 7/3/2002. What I’m going to show younow is how we can use the square of nine to help qualify the significance of two of the major lows that occurred as part of this major bear market we have all beenwitnessing. The following chart is a weekly chart and the points of interest on thischart have been labelled with the relevant prices and dates marked on the chart, pleasemake a note of these because I will be discussing them in more detail shortly.   The following chart is the Square of Nine using the all time high of the Australian SPI200 as the middle number in the centre of the square which is 3500, and it occurred onthe 7/3/2002. Because it’s a high, this will be a negative number and will be enteredas -3500 and will spiral down in value. What I have done here is colour the squarewhere the first significant low occurred which was 2889 - 10/10/2002, and what weare looking for here is to see where the price of the low sits in relation to the Squareof Nine. In this example we can see that the price of 2889 sits only one square awayfrom the Cardinal Cross which are the numbers highlighted in blue.As mentioned previously all numbers that fall on the Ordinal Cross or the CardinalCross are considered to be important support and resistance levels. So the Square of  Nine in this example is suggesting that the price of 2889 is likely to be an importantsupport level and a reasonably important low.   But the Square of Nine can go even further to help qualify the significance of a highor low point. We have already established the price of 2889 as being reasonablysignificant as a possible support level. What we can do now is check to see if the“Date” of this low is also important using the Square of Nine. So in order to do thatall we need to do is select the “Time” page on the Square of Nine spreadsheet andthen simply enter the date of the high of 3500 which occurred on the 7/3/2002 into thecentre, or middle of the Square of Nine. Now that we have done that, all we need todo is check to see if the date of the low of 2889 - 10/10/2002 sits anywhere interestingin relation to the square of nine. So, on the following Square of Nine “Time” chart wecan see the date of 10/10/2002 is sitting rite on the Cardinal Cross and is thereforerepresenting a significant time frame at our significant support level of 2889. This isknown as an alignment in both time and price, and suggests a high probability turning point.If we were to now look at the most recent low that has occurred on the Australian SPI200 you will find a reasonably significant low of 2679 – 13/3/2003. Looking at thesame Square of Nine “Time” chart we can see the date of this low occurring on the13/3/2003 can also be found on the Cardinal Cross, and is only one square out! So theSquare of Nine “Time” chart is suggesting the time frame in which this low occurredis significant, and is therefore a low to watch for a potential change in trend.
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