Intraday GAV Technique
Intraday Trade Technique Innovated By Smart Finance
1. Gav technique for intraday trade:
To use this technique you require 3 inputs. GAV stands for Gann angle and volatility trade technique.
a. Daily volatility (DV) of the instrument (the instrument is either equity or future or commodity not the option)
b. Opening price of the instrument
c. Previous closing price of the instrument.
Trader need to calculate the price range
Price range calculation formula
Price Range = Daily volatility * previous closing price.
If the daily volatility is in the percentage form then do not forgot to divide the result by 100.
Example 1: Nifty on 18th March 2015 open at 8775, its daily volatility is 0.96 and previous close is 8740.
Price range = (8775 *0.96)/100=84.25
Understand the 11 Gann trend lines
Now the 11 sets of trend lines from a lower price point towards the higher price point are as follows
1X1, 1X2, 2X1, 1X3, 3X1, 1X4, 4X1, 1X8, 8X1, 1X16 and 16X1.
The geometrical angle made by these trend lines with the X axis in an up move
(i.e. if the trident line will be drawn from a major low or intraday low)
corresponding to 2X1= 63.75 degrees, 1X2= 26.25 degrees, 1X1= 45 degrees, 1X3= 18.75 degrees, 3X1= 71.25
degrees, 4X1= 75 degrees, 1X4= 15 degrees, 8X1= 82.5 degrees, 1X8= 7.5 degrees, 1X16= 3.75 degrees, 16X1= 86.25 degrees.
The geometrical angle made by these trend lines with the X axis in a down move
(i.e. if the trident line will be drawn from a major high or intraday high)
corresponding to 1X2= 63.75 degrees, 2X1= 26.25 degrees, 1X1= 45 degrees, 3X1= 18.75 degrees, 1X3= 71.25 degrees, 1X4= 75 degrees, 4X1= 15 degrees, 1X8= 82.5 degrees, 8X1= 7.5 degrees, 16X1= 3.75 degrees, 1X16= 86.25 degrees.
How to calculate degree factor?
As per the W.D.Gann principle 180 degree’s factor is 1. Hence the degree factor associated with all trend lines in the up move and down move can be calculated by dividing the degree with 180.
Up move | Degree | Degree Factor | Down Degree | Degree Factor |
16X1 | 86.25 | 0.47917 | 3.75 | 0.02083 |
8X1 | 82.5 | 0.45833 | 7.5 | 0.04166 |
4X1 | 75 | 0.41667 | 15 | 0.08333 |
3X1 | 71.25 | 0.39583 | 18.75 | 0.10416 |
2X1 | 63.75 | 0.35416 | 26.25 | 0.14583 |
1X1 | 45 | 0.25 | 45 | 0.25 |
1X2 | 26.25 | 0.14583 | 63.75 | 0.35416 |
1X3 | 18.75 | 0.10416 | 71.25 | 0.39583 |
1X4 | 15 | 0.08333 | 75 | 0.41666 |
1X8 | 7.5 | 0.04166 | 82.5 | 0.45833 |
1X16 | 3.75 | 0.02083 | 86.25 | 0.47916 |
Formula for calculating the support and resistance price ranges:
a | Support price Range= | (Price range - Degree factor)^2 |
b | Support price Range = | (Price range + Degree factor)^2 |
Example 2: in the Example 1 we have calculated the price range as 86.25 now we will calculate the resistance price range and support price range.
If I wish to calculate the 16X1 trend line support and resistance price range then I need to do in the following way.
a. 1X2 trend line drawn from the low (i.e. resistance trend line) makes 26.25 degrees with X axis and drawn from high (i.e. support trend line) makes 63.75 degrees. The degree factor for 26.25 degree = 26.25/180=0.14583and degree factor for 63.75 degree = 63.75/180=0.35416.
b. Resistance price range of 1X2 trend line = Sqrt(86.25)+0.14583)^2= 88.9799
c. Support price Range of 1X2 trend line = (Sqrt(86.25)-0.35416)^2= 79.7972
Below table calculates the support and resistance price range of all 11 trend lines.
Price range | 86.25 | 86.25 | |||||
Degree | Degree Factor | Resistance price range | Degree Factor | support price range | |||
16X1 | 86.25 | 0.479 | 95.37 | 1X16 | 86.25 | 0.479 | 77.5794 |
8X1 | 82.5 | 0.458 | 94.97 | 1X8 | 82.5 | 0.458 | 77.9469 |
4X1 | 75 | 0.416 | 94.16 | 1X4 | 75 | 0.416 | 78.6843 |
3X1 | 71.25 | 0.395 | 93.79 | 1X3 | 71.25 | 0.395 | 79.0544 |
2X1 | 63.75 | 0.354 | 92.95 | 1X2 | 63.75 | 0.354 | 79.7970 |
1X1 | 45 | 0.25 | 90.95 | 1X1 | 45 | 0.25 | 81.6689 |
1X2 | 26.25 | 0.145 | 88.98 | 2X1 | 26.25 | 0.145 | 83.5625 |
1X3 | 18.75 | 0.104 | 88.19 | 3X1 | 18.75 | 0.104 | 84.3260 |
1X4 | 15 | 0.083 | 87.80 | 4X1 | 15 | 0.083 | 84.7090 |
1X8 | 7.5 | 0.041 | 87.025 | 8X1 | 7.5 | 0.041 | 85.4778 |
1X16 | 3.75 | 0.020 | 86.63 | 16X1 | 3.75 | 0.020 | 85.8634 |
GAV Formula for calculating the support and resistance:
Support = | Opening price - Support price range (i.e. associated with the actual trend line)* degree factor |
Resistance= |
Opening price + Support price range (i.e. associated with the actual trend line)* degree factor |
Price | |||||||||
Enter Price range | 86.25 | 8775.00 | 86.25 | ||||||
Degree | Degree Factor | Resistance | Degree Factor | support | |||||
16X1 | 86.25 | 0.48 | 95.38 | 8820.70 | 1X16 | 86.25 | 0.48 | 77.58 | 8737.83 |
8X1 | 82.5 | 0.46 | 94.97 | 8818.53 | 1X8 | 82.5 | 0.46 | 77.95 | 8739.27 |
4X1 | 75 | 0.42 | 94.16 | 8814.23 | 1X4 | 75 | 0.42 | 78.68 | 8742.21 |
3X1 | 71.25 | 0.40 | 93.76 | 8812.11 | 1X3 | 71.25 | 0.40 | 79.05 | 8743.71 |
2X1 | 63.75 | 0.35 | 92.95 | 8807.92 | 1X2 | 63.75 | 0.35 | 79.80 | 8746.74 |
1X1 | 45 | 0.25 | 90.96 | 8797.94 | 1X1 | 45 | 0.25 | 81.67 | 8754.58 |
1X2 | 26.25 | 0.15 | 88.98 | 8787.98 | 2X1 | 26.25 | 0.15 | 83.56 | 8762.81 |
1X3 | 18.75 | 0.10 | 88.20 | 8784.19 | 3X1 | 18.75 | 0.10 | 84.33 | 8766.22 |
1X4 | 15 | 0.08 | 87.80 | 8782.32 | 4X1 | 15 | 0.08 | 84.71 | 8767.94 |
1X8 | 7.5 | 0.04 | 87.03 | 8778.63 | 8X1 | 7.5 | 0.04 | 85.48 | 8771.44 |
1X16 | 3.75 | 0.02 | 86.64 | 8776.80 | 16X1 | 3.75 | 0.02 | 85.86 | 8773.21 |
Buy sell decision? If the current price is above 1X4 trend line i.e. 8767.94 in the above table then trade will sell for target of 1X1 trend line i.e. 8797.75 and final target 1X16 trend line i.e. 8820.70. If the current price is below 4X1 trend line i.e. 8782.32 in the above table then trade will buy for target of 1X1 trend line i.e. 8754.58 and final target 1X16 trend line i.e. 8737.83 What the trader will do if all targets are achieved? In This case the trader have to derive the price reference for 2nd cycle by changing the opening price with the final target price of the 1X16 or 16X1 trend line . Below table explains the 2nd cycle price points for uptrend and downtrend.
Second cycle uptrend
Price | |||||||||
Price Range | 86.25 | 8820.70 | 86.25 | ||||||
Degree | Degree Factor | Resis tance | Degree Factor | ||||||
16X1 | 86.25 | 0.48 | 95.38 | 8866.40 | 1X16 | 86.25 | 0.48 | 77.58 | 8783.53 |
8X1 | 82.5 | 0.46 | 94.97 | 8864.23 | 1X8 | 82.5 | 0.46 | 77.95 | 8784.97 |
4X1 | 75 | 0.42 | 94.16 | 8859.93 | 1X4 | 75 | 0.42 | 78.68 | 8787.91 |
3X1 | 71.25 | 0.40 | 93.76 | 8857.81 | 1X3 | 71.25 | 0.40 | 79.05 | 8789.41 |
2X1 | 63.75 | 0.35 | 92.95 | 8853.62 | 1X2 | 63.75 | 0.35 | 79.80 | 8792.44 |
1X1 | 45 | 0.25 | 90.96 | 8843.44 | 1X1 | 45 | 0.25 | 81.67 | 8800.28 |
1X2 | 26.25 | 0.15 | 88.98 | 8833.68 | 2X1 | 26.25 | 0.15 | 83.56 | 8808.51 |
1X3 | 18.75 | 0.10 | 88.20 | 8829.89 | 3X1 | 18.75 | 0.10 | 84.33 | 8811.92 |
1X4 | 15 | 0.08 | 87.80 | 8828.02 | 4X1 | 15 | 0.08 | 84.71 | 8813.64 |
1X8 | 7.5 | 0.04 | 87.03 | 8824.33 | 8X1 | 7.5 | 0.04 | 85.48 | 8817.14 |
1X16 | 3.75 | 0.02 | 86.64 | 8822.50 | 16X1 | 3.75 | 0.02 | 85.86 | 8818.91 |
Second cycle downtrend
Price | |||||||||
Price Range | 86.25 | 8737.83 | 86.25 | ||||||
Degree | Degree Factor | Resistance | Degree Factor | ||||||
16X1 | 86.25 | 0.48 | 95.38 | 8783.53 | 1X16 | 86.25 | 0.48 | 77.58 | 8700.66 |
8X1 | 82.5 | 0.46 | 94.97 | 8781.36 | 1X8 | 82.5 | 0.46 | 77.95 | 8702.10 |
4X1 | 75 | 0.42 | 94.16 | 8777.06 | 1X4 | 75 | 0.42 | 78.68 | 8705.04 |
3X1 | 71.25 | 0.40 | 93.76 | 8774.94 | 1X3 | 71.25 | 0.40 | 79.05 | 8706.54 |
2X1 | 63.75 | 0.35 | 92.95 | 8770.75 | 1X2 | 63.75 | 0.35 | 79.80 | 8709.57 |
1X1 | 45 | 0.25 | 90.96 | 8760.57 | 1X1 | 45 | 0.25 | 81.67 | 8717.41 |
1X2 | 26.25 | 0.15 | 88.98 | 8750.81 | 2X1 | 26.25 | 0.15 | 83.56 | 8725.64 |
1X3 | 18.75 | 0.10 | 88.20 | 8747.02 | 3X1 | 18.75 | 0.10 | 84.33 | 8729.05 |
1X4 | 15 | 0.08 | 87.80 | 8745.15 | 4X1 | 15 | 0.08 | 84.71 | 8730.77 |
1X8 | 7.5 | 0.04 | 87.03 | 8741.46 | 8X1 | 7.5 | 0.04 | 85.48 | 8734.27 |
1X16 | 3.75 | 0.02 | 86.64 | 8739.63 | 16X1 | 3.75 | 0.02 | 85.86 | 8736.04 |
The above example is being taken from the 18th March 2015 nifty future data. This is also the proof of the success of this trade.