Trend line indicators are one of the simplest gann methods.
Green Trend line: From a low , if next bar makes a higher high, the trend line move up and becomes green, We call that low as Swing bottom,
Red Trend line; From a top, if the next bar makes a lower low, the trend line moves down and becomes red, we call that high as Swing top.
In Gann 2 bar Trend indicator, which is the most popular and reliable trend indicator, we count 2 bars to decide the trend is changed or not.
From a low of #1 bar If next two bars make higher high then the trend line from the current bar low moves the high of the #3 bar. similary for a high , if next two bars make lower low , then the high becomes a top,
In a uptrend , the stock makes higher bottom, and a down trend the stock makes lower tops.
In the char the green lines are the swing bottoms for monthly high and low prics, and red lines are the swing tops.
e.g. 2677.55 was a swing bottom because the two consecutive monthly candles have higher high, Similary you can find the other lines why we drawn it as bottom.
Nifty made a top on April 2011 on monthly chart , observe may and june monthly prices made lower low. After that we made a lower top, then two higher tops and we made lower top which can be called as double top,
If you are trend follower, this trend line will guide you the current trend of the market, Monthly chart moves slowly, hence you may loose around 1000 points to find the trend, weekly chart is more prefere, which will give trend change quickly and more reilable than daily trend.
If you are swing trader, you can use all the three time frames to make best use of the trend.
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