We need a discussion on Murrey Math and implementing it into your trading.

I know many of you had not heard of Murrey Math Lines (MML) prior to reading my blog or this forum. I must also admit I only recently discovered it, so we will all learn together!

First, …

.

The following user says Thank You to sam028 for this post:

Site Administrator Swing Trader Data Scientist & DevOps

Manta, Ecuador

Experience: Advanced

Platform: My own custom solution

Trading: Emini Futures

Posts: 49,785 since Jun 2009

Thanks: 32,314 given,
97,575
received

As PrTester put it:

I noticed I didn't have this problem with the EOT version of the indicator, but I think they probably used a very advanced timing method in theirs to make all calculations based on a specific time interval regardless of the chart it was placed on. I am hoping Richard will further enhance the EOT version by adding the right margin and text labels, like the new version of the public indicator, because I don't know how to even begin to program the advanced timing into an indicator.

sam028, you might also try turning on Hourly pivots option inside MML to see if that helps. I found it did help for me.

@sam you must find an correlation beetween your charts and then do not make a change ...

for example you use an 4 range bar chart as main chart,
then you look at a 8 range bar chart for signal,
in 16 bars you look for trend ... so you will have in many case the same points on the mml ...

Murrey Math Line X MetaTrader indicator — a pivot line indicator that will definitely help every trader that know how to trade with support, resistance and pivot lines. It displays 8 different lines (with possible additional lines) on the main chart, helping you to find the best points to sell, buy and exit the positions. Input parameters:

P (default = 64) — period in bars or in other periods (set by MMPeriod), on which the lines will be calculated. The lower is the number the more current but less accurate calculations will be.

MMPeriod (default = 1440) — a basic period in minutes (60 — for hourly pivots, 1440 — for daily pivots, 10080 — for weekly and 43200 — for monthly); if greater than zero, indicator will use P amount of MMPeriod minutes to calculate its lines. If zero, indicator will use P amount of the current chart bars to calculate its lines.

StepBack (default = 0) — a shift back for calculating the lines (in the current bars or in number of MMPeriod (if set) minutes).

Other parameters — affect only visual parameters of the lines.

It's easy to use Murrey Math Line X. 0/8P and 8/8P lines are the ultimate resistance and support lines — they are very hard to break. 1/8P and 7/8P lines are weak support and resistance lines, but if the price stopped near them, it will reverse and change direction. 2/8P and 6/8P lines are strong reverse points. 3/8P and 5/8P are the bottom and the top of the average trading range respectively; it is very likely that the price will either pierce this range fast or will remain inside it for a long time. 4/8P is a major support and resistance line; sell and buy when the price crosses it for a certain profit. The blue arrow marks the final calculated bar.

The following user says Thank You to wh for this post:

Price is traveling simultaneously through all the sub-octaves of a binary algorithm of the square of the number base. Wow what a statement! Let’s break it down. We use a 10 number base system. The square of the number base is 10 squared or 100. The binary algorithm of 100 is 100 divided by 2 divided by 2 repeatedly down to very small numbers. Each subdivision of 100 by 2 represents a sub-octave’s interval size. The sub-octave interval is the distance between the Murrey Math Lines. There are about 19 total sub-octaves down to about 2 pips (0.000191).

The Murrey Math indicator on one price screen looks at the price range over a specified amount of time and finds the one appropriate sub-octave. The indicator starts at current time and looks backwards to find the sub-octave that covers the range in price movement and that will still contain the current price. It may go further than you specify to do this, but it will use the number of periods specified. Eight (8) sub-octave interval levels constitutes a complete MM frame between 0/8 to 8/8. This is W. D. Gann’s “Square-in-Time” that confuses people. We need to have multiple screens of different amounts of time to find all the pertinent sub-octaves simultaneously. Of the 19 total sub-octaves there are about 8 that are meaningful for currencies. I use a 14 screen approach to find the 8 sub-octaves. I vary time from 256 days down to 1/32 of a day, by always halving time. This is consistent with the binary algorithm.

Each sub-octave represents where price is relative to an extreme, average or retracement condition. The same rules apply in each sub-octave about strengths or weaknesses of the Murrey Math Lines. I am looking for price at the 1/8th or 7/8th lines to move through these lines, long and short respectively, for safe retracement trades. These lines are weak and price will run through them at least to the next 1/8th line. Price runs usually don’t exceed a 2/8 or 3/8 run. Such trades are the most predictable.

Price within the “pipe” which is the 3/8 line to 5/8 line is channeling and is to be avoided. Price breaking through the pipe is trending and moving. Price bounces off the pipe as support or resistance. Price above 8/8 or below 0/8 is extreme and may reverse. A break beyond the extreme +2/8 or -2/8 lines will result in a frame shift of the sub-octave and be moving probably with the trend. The +1/8 and the -1/8 lines are other extreme boundary lines calling for a break into the next sub-octave or a reversal. Lines of 2/8 and 6/8 are pivot lines. The 0/8, 4/8 and 8/8 lines are support or resistance lines.

Retracements in a larger sub-octave are apparent as opposite directional moves in a smaller sub-octave. So when all sub-octaves are saying the same thing you have a movement in that direction with strong momentum. If a smaller sub-octave stops the price movement at its extreme levels, price may start reversing against the trend. It seems that best entries are at the 1/8 or 7/8 lines in smaller sub-octaves rather than when price breaks the extreme +2/8 or -2/8 lines. Let price break the extreme levels and the frame redraw itself. Then wait for price to return to the 1/8 or 7/8 lines for an entry. You may find adjacent time charts with the same sub-octave interval and shifted line numbers. This is possible depending on how the currency pair moved in those two respective time periods. This happens more on the smaller sub-octaves rather than the larger ones.

The MM interval sizes that are possible are 100 divided by 2 to the Nth power. N is an integer (whole number) between 5 to19 for currencies. Smaller values of N between 1 to 9 would be more applicable to stocks. Currencies vibrate at higher N values. Of these total 19 sub-octaves only 15 relate to currencies and really only 8 apply to each currency pair and shorter term trading. Currencies are in two groups of 8 sub-octaves because of their price values. Currencies worth 70 to 250 (GBPJPY) would be in a different group (N=5-12) than those selling for less than 2.00 like the GBPUSD (N=12-19).

I have highlighted in Murrey’s book many places where the words he uses suggest that all sub-octaves in different amounts of time control the price movement by the rules of the MM Lines. When you specify P (periods) in the MM indicator you will find only one sub-octave. So my approach is to specify various amounts of time and let the MM indicator find each sub-octave for a read of where price is within each sub-octave for a decision as to a trade direction and entry price. We don’t know how much time a currency pair has spent within each sub-octave nor do we care. If we span time from one year down to intraday we will find each sub-octave. The amounts of time specified in the MM indicator only serves in finding the various sub-octaves.

There are 64 trading days in one season of the calendar or three months. Weather within a season can affect the price of tea in China and everything else. A 64 day sub-octave interval will be large enough to trade for a good amount of pips. This is typically 61 or 78 pips. Larger frames might be 122 to 156 pips. These pip amounts come from the subdivision of 100 by 2 repeatedly down to N’s of 14, 7, 13 and 6 respectively. Did you notice 122 is two times 61 and 156 is two times 78? You should divide 100 by two 19 times to see all these values. Then smaller amounts of time such as 32-16-8-4-2-1-(1/2)-(1/4)-(1/8)-(1/16)-(1/32) days will find the other 7 possible sub-octaves for a complete read of what price is doing as to trend and imbedded trends. Analysis of 128 and 256 days is just to get a longer look at trends out to a full year of time (256 trading days).

Depending on the speed of the market you may find more or less sub-octaves, but this is usually what I find. I have seen a sub-octave interval as small as 0.5 pip (N=21) and as large as 625 pips (N=4). These are not very practical. Most people’s trouble with Murrey Math is that they are not studying multiple charts and multiple sub-octaves.
Joe Hickle

The following 5 users say Thank You to joehickle for this post:

Hi Joe
I have just started to monitor intraday market using MML. I must say you could see from one TF, that looks while the other doesn't look as good of a fit.
Then I found your post regarding how it should be interpreted. Does that mean one should also have many time frames to see which suboctave works? If that TF works on one day, a different TF may work better on a different day? By reading your post, i am assuming you are using it based on Time charts not bar nor tick charts?
It also sounded like selling retracements at 7/8 and buying at 1/8 is the most common ways to trade. From reading other posts, users often sell at 8/8 , +1/8, +2/8 or buying at 0/8, -1/8, -2/8. But Frame could take place which means most likely trades should be avoided? I am confused with the proper ways to enter and exit a trade.
Will you please provide more info?
thank you,
Jack

We need a discussion on Murrey Math and implementing it into your trading.

I know many of you had not heard of Murrey Math Lines (MML) prior to reading my blog or this forum. I must also admit I only recently discovered it, so we will all learn together!