Email Twitter Page Fb Page Youtube Videos

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 degreeā€™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 moveDegreeDegree FactorDown DegreeDegree Factor
16X186.250.479173.750.02083
8X182.50.458337.50.04166
4X1750.41667150.08333
3X171.250.3958318.750.10416
2X163.750.3541626.250.14583
1X1450.25450.25
1X226.250.1458363.750.35416
1X318.750.1041671.250.39583
1X4150.08333750.41666
1X87.50.0416682.50.45833
1X163.750.0208386.250.47916

Formula for calculating the support and resistance price ranges:

aSupport price Range=(Price range - Degree factor)^2
bSupport 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

16X186.250.47995.371X1686.250.47977.5794
8X182.50.45894.971X882.50.45877.9469
4X1750.41694.161X4750.41678.6843
3X171.250.39593.791X371.250.39579.0544
2X163.750.35492.951X263.750.35479.7970
1X1450.2590.951X1450.2581.6689
1X226.250.14588.982X126.250.14583.5625
1X318.750.10488.193X118.750.10484.3260
1X4150.08387.804X1150.08384.7090
1X87.50.04187.0258X17.50.04185.4778
1X163.750.02086.6316X13.750.02085.8634


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

 
Example 3:   In Example2 we have calculated 1X2 trend line support and resistance price range in example 1 I have mentioned the opening price of nifty was 8775. Now we will calculate the 1X2 trend line resistance and support. 1X2 trend line support = 8775-79.7972*0.35416=8746.7390 1X2 trend line resistance   = 8775+88.9799* 0.14583= 8787.9759 Below table has the resistance and support calculation of all GAV trend lines.
    Price     
Enter Price range  86.258775.0086.25    
 DegreeDegree FactorResistance  Degree Factor  support
16X186.250.4895.388820.701X1686.250.4877.588737.83
8X182.50.4694.978818.531X882.50.4677.958739.27
4X1750.4294.168814.231X4750.4278.688742.21
3X171.250.4093.768812.111X371.250.4079.058743.71
2X163.750.3592.958807.921X263.750.3579.808746.74
1X1450.2590.968797.941X1450.2581.678754.58
1X226.250.1588.988787.982X126.250.1583.568762.81
1X318.750.1088.208784.193X118.750.1084.338766.22
1X4150.0887.808782.324X1150.0884.718767.94
1X87.50.0487.038778.638X17.50.0485.488771.44
1X163.750.0286.648776.8016X13.750.0285.868773.21


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

  86.258820.7086.25    
 Degree

Degree

Factor

Resis

tance

  

Degree Factor

   
16X186.250.4895.388866.401X1686.250.4877.588783.53
8X182.50.4694.978864.231X882.50.4677.958784.97
4X1750.4294.168859.931X4750.4278.688787.91
3X171.250.4093.768857.811X371.250.4079.058789.41
2X163.750.3592.958853.621X263.750.3579.808792.44
1X1450.2590.968843.441X1450.2581.678800.28
1X226.250.1588.988833.682X126.250.1583.568808.51
1X318.750.1088.208829.893X118.750.1084.338811.92
1X4150.0887.808828.024X1150.0884.718813.64
1X87.50.0487.038824.338X17.50.0485.488817.14
1X163.750.0286.648822.5016X13.750.0285.868818.91

Second cycle downtrend

    Price     
Price Range  86.258737.8386.25    
 DegreeDegree FactorResistance  Degree Factor   
16X186.250.4895.388783.531X1686.250.4877.588700.66
8X182.50.4694.978781.361X882.50.4677.958702.10
4X1750.4294.168777.061X4750.4278.688705.04
3X171.250.4093.768774.941X371.250.4079.058706.54
2X163.750.3592.958770.751X263.750.3579.808709.57
1X1450.2590.968760.571X1450.2581.678717.41
1X226.250.1588.988750.812X126.250.1583.568725.64
1X318.750.1088.208747.023X118.750.1084.338729.05
1X4150.0887.808745.154X1150.0884.718730.77
1X87.50.0487.038741.468X17.50.0485.488734.27
1X163.750.0286.648739.6316X13.750.0285.868736.04

GaV Img 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.

Intraday GAV Technique