How to Use Price, Time, Volume and Velocity to Trade Like W.D. Gann
W.D. Gann was one of the most influential traders and market analysts of the 20th century. He developed a unique and complex system of technical analysis based on geometry, astrology, numerology and cycles. He also claimed to have discovered the \"Master Time Factor\", a secret formula that could predict the future movements of any market.
One of the aspects of Gann's system that has intrigued many traders is his use of four factors: Price, Time, Volume and Velocity. These factors are mentioned in some of his writings and courses, such as How to Make Profits in Commodities (1933) and The Master Time Factor Course (1953). Gann stated that every investor and trader should know the relationship between these factors, as they could reveal the trend, strength and direction of any market.
But what exactly are these factors and how can they be applied to trading This is the question that Awodele explores in his book Observations on W.D. Gann Vol. 2: Price - Time - Volume - Velocity (2016). In this book, Awodele shares his research and insights on these four factors, based on Gann's own words and some additional material he discovered that has a connection to Gann. He also provides some examples and charts to illustrate how these factors can be used to analyze and trade various markets.
In this article, we will summarize some of the main points from Awodele's book and show you how you can use Price, Time, Volume and Velocity to trade like W.D. Gann.
What are Price, Time, Volume and Velocity
According to Awodele, these four factors are defined as follows:
Price: The numerical value of a market at any given point in time.
Time: The duration or interval between two points in time.
Volume: The quantity or amount of transactions or contracts traded in a market during a given period of time.
Velocity: The rate or speed of change of price or volume over time.
Gann believed that these four factors were interrelated and influenced each other. He also believed that they followed certain patterns and cycles that could be measured and predicted. By understanding these patterns and cycles, a trader could anticipate the future behavior of any market and trade accordingly.
How to Use Price, Time, Volume and Velocity to Trade
Awodele suggests that there are three main ways to use these four factors to trade:
Analyze the trend: By using Price and Time, a trader can determine the direction and duration of the trend of any market. Gann used various tools and methods to analyze the trend, such as angles, squares, circles, triangles, hexagons, octagons, cycles, etc. He also used natural laws and principles, such as the Law of Vibration, the Law of Cause and Effect, the Law of Polarity, etc.
Analyze the strength: By using Volume and Velocity, a trader can determine the strength or weakness of the trend of any market. Gann used various indicators and methods to analyze the strength, such as volume bars, volume oscillators, volume ratios, volume patterns, etc. He also used natural laws and principles, such as the Law of Action and Reaction, the Law of Supply and Demand, the Law of Balance, etc.
Analyze the direction: By using Price, Time, Volume and Velocity together, a trader can determine the direction or change of direction of the trend of any market. Gann used various tools and methods to analyze the direction, such as swing charts, trend lines, channels, breakouts, reversals, etc. He also used natural laws and principles, such as the Law of Harmony, the Law of Proportion, the Law of Rhythm, etc.
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