Gann High Low

The Gann High Low indicator provides a trend-following mechanism that alternates between moving averages of highs and lows to identify potential market reversals and support/resistance zones.

Usage

The Gann High Low indicator is primarily used to identify the prevailing market trend and potential entry or exit points. The indicator plots a single line that switches its calculation source based on price action:

• Uptrend Identification: When the price closes above the moving average of previous highs, the indicator plots the moving average of the lows. This acts as a trailing support level.
• Downtrend Identification: When the price closes below the moving average of previous lows, the indicator plots the moving average of the highs. This acts as a trailing resistance level.
• Trend Reversals: A change in the line's position (flipping from below price to above price, or vice versa) signals a potential shift in market momentum.

Traders often use the length of the periods to fine-tune the sensitivity. Adjusting the High Period and Low Period can optimize the script for different market conditions; for instance, a shorter Low Period may be more responsive for long entries in bullish markets.

Details

The Gann High Low Activator was originally described by Robert Krausz in the 1998 issue of "Stocks & Commodities Magazine." The logic is based on the relationship between the current closing price and the average volatility of previous peaks and troughs.

The script executes by calculating two distinct Simple Moving Averages (SMA): one based on the "High" price of the specified period and one based on the "Low" price. The algorithm tracks the state of the price relative to these curves. If the closing price breaks the current active average, the indicator "activates" the opposing average. This creates a "channel" logic where the trend is only considered changed once the price successfully closes outside the boundary of the average currently being tracked.

Settings

• HIGH Period: Defines the lookback length used to calculate the Simple Moving Average of high prices.
• LOW Period: Defines the lookback length used to calculate the Simple Moving Average of low prices.

FAQ

What does a color change in the Gann High Low represent? A color change indicates a trend reversal. When the indicator turns green and moves below the price, it signals an uptrend. When it turns red and moves above the price, it signals a downtrend.

Can this indicator be used for setting stop losses? Yes, many traders use the Gann High Low line as a trailing stop loss level, as it represents a dynamic area of support or resistance based on historical price extremes.

How can I access the Gann High Low indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.