What 'Speed' Means in Market Analysis
Market speed — the rate at which price moves per unit of time — is embedded directly in Gann’s angle system. Every Gann angle represents a specific velocity: the 8×1 angle means 8 price units per 1 time unit, the 1×8 means 1 price unit per 8 time units. When price moves within a given angle band, the market is moving at the speed that angle represents.
The 1×1 as the Velocity Equilibrium
The 1×1 angle is the definition of normal market velocity. A market advancing at exactly the pace of the 1×1 angle — one price unit per one time unit — is moving at equilibrium speed. Markets above the 1×1 from a significant low are moving faster than equilibrium. Markets below the 1×1 are decelerating, potentially reversing.
Detecting Speed Changes Before They Happen
When price is trading within the 1×2 angle band and approaching the 1×1 angle from below, the analyst can project in advance: if price penetrates the 1×1, market speed is about to increase. If price fails at the 1×1, speed will remain slow or decelerate further. The angle where price is heading reveals what speed the market will be moving at next.
Trading the Speed Change Signal
When a speed change is identified — specifically when price breaks through a key angle and enters a new velocity band — the trade management implications are immediate. An upward break through the 1×1 into the 2×1 band signals an accelerating trend. A downward break from the 1×1 to the 1×2 signals deceleration.
Most technical analysts discover a trend has decelerated after it has already happened. Gann angle analysis projects the deceleration zone in advance. The difference between acting before and after a speed change is, in most cases, the difference between a winning and a losing trade.