wanted to share something that i've been studying lately

. It's about the Gann retracement. For those who hasnt heard of it, it's similar to Fib retracement. However, in this case, Gann retracement is divided into 8 sections between the extream high/low. i.e. 1/8th, 2/8th, 3/8th...8/8th retracement level.
I've attached at 4H chart on UJ. I've taken the extream high during 6/22 and the low (not extream) at 6/27. So, anything beyond 6/27 is an unseen price. The move from 6/22 high to 6/27 low is considered as 1/8th of the move, i.e. 100% of 1/8th. So, 2/8th will be 200%, 3/8th is 300% and so on.
the point is, like in any other retracement method, the level will act as support and resistant. However, In those traditional methods will need to wait for extream high and extream low to contruct. Uncharted prices are often difficult to analyse.
One interesting thing to take note in here is, the future prices corespond, or reacts to the level pretty well. In addition, it also works well when the price is ranging sideways.
Also, i've attached another example on EU, with 1/8th (100%) at 7/24/2008 high and 8/16/2007 low. Future (beyond 8/16/2007) prices also reacts well to the 3/8th, 4/8th and 5/8th level.
The high at 1.6018 during 4/22/2008 is actually 3/8th within the larger 5/8th. The current price movement is nicely bound within 4/8th and 5/8th level.
hmm...sounds very confusing...
Attached thumbnail(s)