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21 
SQUARE OF THE RANGE "Everything that trades makes a top or bottom on some exact mathematical point in proportion to some previous movement." According to Gann, the square of range is the most powerful of the frice squares. This particular method of finding time periods to ook for change in price action is truly exceptional. Again, you can find the important time and price levels of the square of a range by taking the 45 degree angle up from the last low, and when it reaches the level of the last significant high, that is the square, or alternatively, from the last high down to the previous significant low. That is a equare of the range of movement from the high to the low or from the low to the hign. You will find on a normal weekly or monthly chart that ranges square out often, and will give you some excellent trading opportunities. The square of the range is very important on the weekly charts from the significant swings in the price of a stock. If you look at weekly and monthly charts, the significant range in any particular stock will be clear. This will help your work on the daily charts. Bottoms above 50 percent of the range indicate that the stock is holding a strong position. Gann said, if you get a good bottom just above the 50 percent of range mark, that the stock or index is in a strong position for a rally. Divisions of significant ranges in price and time, in high priced items, can be very exact. Many times these high priced items will not hit a top or bottom unless it is on a division of a range. But, when you see that, look for additional trading evidence before placing a trade from a price division. Any time a stook or commodity or index bottoms at fifty percent of the range of the last movement, you have a doubly good reason to look at the other divisions of that range as being important. Never neglect to draw angles from 50 percent of the range to determine support or resistance. They can help qualify weak or strong positions. In addition, an angle drawn up from the low price at the time of the high is what Gann referred to as a true trend line. This can obviously be drawn down from the high price at the date of the low. Illustration 3.5 and 3.6 shows true trendlines indicated with "TT". Until you become well aquainted with this analysis, I would suggest that you keep a calendar day chart on some items, as wall as a trading day chart. If price moves out of that square of the range, the next high or low will likely be in proportion to a previous range. Usually it will be in 1/2 or 1/3 proportions. The method Gann used to keep track of the previous price ranges is shown in Illustration 3.7.
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