1. A velocity sensor comprising: an optical position encoder having output signals whose frequency and phase relation depend on the rate and direction of movement of an object to which the encoder is adapted to be attached; a source of a high frequency carrier; means for modulating said carrier with said encoder output signals; and means for producing two side band frequencies that are the sum and difference of said carrier and encoder output frequencies, and for deriving therefrom a positive or negative velocity signal that is continous through zero rate and whose polarity designates the direction of movement.