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 anup 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 adown 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

Example 3: in the Example 2 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			86.25	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	Resistance			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.

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