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Understanding the Concept of Gann Grid in Forex Trading

Gann Grid is one of the technical tools used by traders on the MetaTrader 4 (MT4) platform. This tool appears as a grid on the chart display when you first open MT4, with lines forming square boxes at the intersections of vertical and horizontal lines. However, unlike the basic MT4 grid, Gann Grid lines intersect diagonally.



Function of Gann Grid 

Gann Grid is used to display trends formed by a 45-degree angle, following Gann Lines' Law. According to the Gann concept, a line sloping at a 45-degree angle indicates a long-term trend, either upward or downward. If the price is above the upward sloping line, it indicates an uptrend or bullish market. Conversely, if the price is below the line, the market is in a downtrend or bearish condition.

The points where Gann Grid lines intersect often signal changes in the main trend. When the price approaches the line during an uptrend, time and price reach a precise balance. Subsequent intersections of Gann Grid lines mark the end of this balance and the potential for a trend change.

Activating Gann Grid in MT4 

To use Gann Grid in MT4, you can follow these steps:

  1. Activate Gann Grid:
    • Open the Insert menu on MT4.
    • Select Gann Grid from the list of options.
    • Place the cursor on the chart screen.
  2. Adjusting Gann Grid:
    • Double-click on the end of the Gann Grid line.
    • Three control points will appear:
      1. Point 1: Places the initial position of Gann Grid.
      2. Point 2: Moves the position of Gann Grid.
      3. Point 3: Changes the angle and slope of Gann Grid. The end angle should point to an empty position on the chart. The angle can be adjusted according to your preference, as over time you will understand the most suitable angle for your analysis.

Adding Horizontal Lines 

The next step is to add horizontal lines to each diamond-shaped square formed by the Gann Grid. The function of these horizontal lines is to serve as a map and boundaries for market break, sideways movement, or reversal.

Filtering False Signals 

To avoid false signals, you can use Channels or Trendlines. These channels will help determine the right time to open positions. For example, you can use the dashed white trendline by:

  • Drawing the trendline from the peak to the end of the trend.

Using this method, you can filter out false signals and make better trading decisions.

Gann Grid is a useful tool in technical analysis to predict market movements. By understanding and using Gann Grid correctly, you can identify long-term trends and filter out false signals, helping you make wiser trading decisions. Hopefully, this article can enhance your insight into balancing market movements and improving your trading strategy.

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