The Night Glass — Stockhelm Galley

1. Theory — The Timeframe Hierarchy

Gann's primary tool was the weekly chart. But he was explicit: daily charts have a role. The key is knowing when to use them and — more importantly — when not to.

When markets are very active and fluctuating over a wide range, especially in the last stages of a Bull Market or the last fast decline in a Bear Market, you should keep up a Daily high and low Chart... applying the same rules as used for the Weekly Chart.
— W.D. Gann, Chapter 2

Daily

Signals first.
Leading indicator.
Use in volatile periods.

Weekly

Confirms trend.
Primary for position trades.
Trade on this signal.

Monthly

Major trend context.
Identifies bull/bear structure.
Do not trade on this alone.

The daily chart gives you the first change in the minor trend. The weekly chart confirms whether that change becomes a main trend reversal. You trade on weekly. You use daily for timing — and only when volatility demands it.

When to Switch to Daily

Last stages of a bull market (wide range, fast moves)
Last fast decline in a bear market
Markets fluctuating over an unusually wide range
Normal markets: weekly only

Warning: Daily changes faster = more false signals. Weekly confirmation filters noise. For the complete weekly rules, see The Running Lights.

2. Daily Chart Application

The rules do not change. Only the timeframe changes.

Signal Flag: Daily Green/Red

Green: higher daily low + higher daily high
Red: lower daily low
Buy: Red → Green on daily
Sell: Green → Red on daily

How to Use the Hierarchy

Weekly chart shows Green (bull trend established)
Daily chart goes Red (minor pullback within bull trend)
Wait for daily to flip back to Green
Buy on daily Green WITH weekly Green = best entry
If daily Green but weekly still Red = minor rally, do not buy yet

This is confluence across timeframes. A daily Green confirmed by weekly Green is high-probability. A daily Green against weekly Red is a trap.

3. Modern Market Adaptations

Forex Markets

Weekly charts remain primary. Use Friday close as the week close. Pip-based stops: 30–50 pips instead of 1–3 points. Different pairs have different vibrations — test Green/Red on each before committing capital.

Example: EUR/USD Week 1: Low 1.0800, High 1.0900. Week 2: Low 1.0820, High 1.0920 = GREEN. Buy at 1.0920. Stop: 1.0820 − 30 pips = 1.0790.

Cryptocurrency

24/7/365 trading — no traditional week. Consider 3-day or 4-day weeks for faster crypto cycles. Higher volatility demands wider stops or smaller positions. Flash crashes can gap through stops — use smaller size.

Example: BTC 7-day bars: Week 1 Low 60,000, High 65,000. Week 2 Low 61,000, High 66,000 = GREEN. Buy at 66,000. Stop: 61,000 − 500 = 60,500.

Commodity Futures

Gann's original focus — least adaptation needed. Weekly high/low on continuous contracts. Seasonal factors may align with Green/Red signals. Expiration weeks: higher volatility, consider adding daily.

Gann's 1934 record: 170 grain trades, 161 profits (94.7%). 147 cotton trades, 135 profits (91.8%).

Stock Indices (Modern)

Primary: SPX, NDX, DJIA, RUT. ETF Proxies: SPY, QQQ, DIA, IWM. Futures: ES, NQ, YM (leverage, 24/5). Green/Red on SPY weekly is the modern equivalent of Gann's Dow 30 weekly chart.

4. Software Implementation

TradingView Pine Script

  // Green/Red Trend Line Indicator  // @version=5  indicator(“Gann Green/Red Trend”, overlay=true)    // Weekly aggregation  weeklyHigh = request.security(syminfo.tickerid, “W”, high)  weeklyLow = request.security(syminfo.tickerid, “W”, low)    // Green condition: higher bottom AND higher top  isGreen = weeklyLow > weeklyLow[1] and weeklyHigh > weeklyHigh[1]    // Red condition: lower bottom  isRed = weeklyLow < weeklyLow[1]    // Plot  plot(isGreen ? weeklyHigh : na, color=color.green, title=“Green Line”, linewidth=2)  plot(isRed ? weeklyLow : na, color=color.red, title=“Red Line”, linewidth=2)    // Alerts  alertcondition(isGreen and not isGreen[1], “Red to Green”, “BUY SIGNAL”)  alertcondition(isRed and not isRed[1], “Green to Red”, “SELL SIGNAL”)      

Excel Manual Method

Column	Content	Formula
A	Week ending date	Manual entry
B	Weekly High	Manual entry
C	Weekly Low	Manual entry
D	Green?	=IF(AND(C2>C1,B2>B1),“YES”,”NO”)
E	Red?	=IF(C2
F	Line Value	=IF(D2=“YES”,B2,IF(E2=“YES”,C2,””))
G	Color	=IF(D2=“YES”,”GREEN”,IF(E2=“YES”,”RED”,””))

Chart Column F with colors from Column G. The visual line is your discipline.

5. Common Mistakes — Modern Era

Mistake: Using Daily for Position Trading

Wrong: Trading Green/Red on daily for long-term positions without weekly confirmation.

Right: Weekly for position trades. Daily only for volatile periods or short-term swings. Always confirm daily with weekly.

Mistake: Tight Stops on Wide-Ranging Weeks

Wrong: 3-point stop when weekly range is 15 points.

Right: Stop must accommodate normal volatility. Use 5 points for high-priced or volatile stocks. Or reduce position size so dollar risk stays under 10%.

Mistake: Ignoring Market Structure

Wrong: Applying weekly Green/Red to crypto without adjusting for 24/7 gaps.

Right: Crypto needs wider stops or faster timeframes. News events cause instant reversals. Adapt the method to the market's structure — do not force the market into your template.

Read next: For the core weekly rules that drive all modern adaptations, see The Running Lights. For position sizing across asset classes, see The Trim Tab.