A Gann Fan is an analytical drawing tool used to indicate time and price movements from important highs and lows and identify price breakouts. The angled lines fan from the selected point. They indicate a time to price relationship that may be relatively fast or relatively slow, depending on the size of the Gann angle.
A Gann Fan is an analytical tool based upon the application of Gann Angles, a highly successful derivative technique designed by legendary stockbroker W.D. (William Delbert) Gann.
W.D. Gann believed that certain geometric patterns and angles held unique characteristics that could be used to correctly predict actions in both price and time, so indicating future instances of time and price movements from important highs and lows and so identify likely price breakouts.
Gann’s techniques specify that equal time and price intervals are used in the charts as he believed that the ideal time and price exists when those prices rise or fall at an angle that falls at 45 degrees in relation to the time axis, known as a 1×1 angle (one price unit rise for each time unit.)
Gann believed that a trendline of 1×1 or above represented a bull market and that instances below this trendline represented a bearish market.