Murrey Math

March 16th, 2012, 08:27 AM

Eeeeeek

Fellas, fellas.. there's no magic, no hocus pocus, no random lines - the genius of Murrey Math is that it's simple simple division by 2. Or multiplication, can't remember which.

One can think of it as the 50% ratio. If you don't want to call it an MM line, call it a Fibonacci line if it makes you happy. Or Gann, or Euclid or Pythagoras. What's in a name?

The TradeStation ELD posted in the Downloads section needs some refinement. It produces quite a few unnecessary peaks and valleys. Despite this, it gives you a general idea. Here's a recent chart.

If I had gone long at every point the price fell to the magenta (pink) line,
and gone short at point the price rose to the blue line,
how many winners and losers would I have had?

And on the losers, if I had held my ground believing the price would go back to the 50% point,
how many losers would I have had without at least a break-even exit?

P.S. Currently stuck in a "bad" trade, short at 1390.625, and will add at 1406.25. Plan to exit at 1375, or at least 1390.625. Fingers crossed.

P.P.S. Even the 1390.625 bad trade gave me an exit with at least 3.9375 points which I didn't take at the time.

September 19th, 2012, 10:33 AM

Zambi

Eeeeeek

Fellas, fellas.. there's no magic, no hocus pocus, no random lines - the genius of Murrey Math is that it's simple simple division by 2. Or multiplication, can't remember which.

One can think of it as the 50% ratio. If you don't want to call it an MM line, call it a Fibonacci line if it makes you happy. Or Gann, or Euclid or Pythagoras. What's in a name?

The TradeStation ELD posted in the Downloads section needs some refinement. It produces quite a few unnecessary peaks and valleys. Despite this, it gives you a general idea. Here's a recent chart.

If I had gone long at every point the price fell to the magenta (pink) line,
and gone short at point the price rose to the blue line,
how many winners and losers would I have had?

And on the losers, if I had held my ground believing the price would go back to the 50% point,
how many losers would I have had without at least a break-even exit?

P.S. Currently stuck in a "bad" trade, short at 1390.625, and will add at 1406.25. Plan to exit at 1375, or at least 1390.625. Fingers crossed.

P.P.S. Even the 1390.625 bad trade gave me an exit with at least 3.9375 points which I didn't take at the time.

Hi Zambi,
Thanks for the good explanation of MML. I think I understand it better now.
However, regarding choosing timeframe and its framesize, I am still not too certain.
While I have been playing around, I found ,for example, lines in 1 min chart with 8 framesize and 1 min chart with 64 framesize is totally different. Now, that is absolutely understandable. But is it saying I am giving it 8 mins to try to go from 8/8 to 0/8 (say 20bps). While if i use 1min with 64 framesize, I am hoping it goes from 8/8 to 0/8 (prob 50bps). So it just depends on my appetite?
Anytime frame shifts (whether it's due to time or price) I should look for an exit if I have a position on?
Apologies if I am asking redundant questions.
thanks,
Jack

September 20th, 2012, 03:17 AM

@ BigMike, i can see why you were once very interested in MML. I have been watching it for 2 days. It's fascinating. The only thing is it's all retracement/countertrend trading. If there is a trend move in magnitude, I can easily be run over, like catching a falling knife.
1. Are there ways avoid what tradees to take and what not to take?
2. Let's say if i were to catch trades at +1/8, 0/8, -1/8, then comes the frameshift. Should I getting out at 4/8 of the new frame?
3. Are there books/pages that i can read more about MML, particularly how to execute orders?

thanks
Jack

September 20th, 2012, 06:08 PM

typer77

@ BigMike, i can see why you were once very interested in MML.

I want to make sure you understand in no certain terms that I no longer feel MML is useful. You can understand more on why I feel that way here, and why I think you believe it is so interesting:

Random Line Theory

I want to test something. It's simple. Place some random lines on your chart prior to the day opening, and see if at the end of the day you feel like those lines were important (try to imagine they weren't random, but some expensive or complicated …

In short, use whatever you want, but use it for the right reasons - and know full well it is not predicting anything.

Mike

December 31st, 2012, 03:57 AM

Big Mike

Glad to hear it --- the majority of credit goes to PrTester, he did most of the coding.

Mike

Hello all:

Mike posted MurreyMath.eld. Did anyone venture into coding it for TOS? Thanks in advance.

December 31st, 2012, 09:53 AM

sam1197

Hello all:

Mike posted MurreyMath.eld. Did anyone venture into coding it for TOS? Thanks in advance.

A few years ago I wanted to compare the Fibonacci code to the Murrey Math code to see how they would help in my trading analysis; so I made a couple versions of Murrey Math code for TOS. Try these out and see if they help. Feel free to make any changes.

One code is for the highest high and lowest low of the chart and the other is for the highest high and lowest low of the current day.

May 15th, 2013, 04:35 PM

Big Mike

Now let's take a quick look at what happens when price moves above 8/8 or below 0/8. This does not occur too often, but when it does it's important to know what to expect.

The above illustration tells us the following: If price moves above 8/8, 75% of the time the price will reverse off the +1/8 line and retest 8/8 before moving higher to +2/8. Similarly, if price falls below 0/8, 75% of the time the price will reverse off the -1/8 line and retest 0/8 before moving lower to -2/8.

Now, if price moves beyond the +1/8 or -1/8 lines, then 95% of the time it will reverse when it hits +2/8 or -2/8. Remember, the market was already in overbought (8/8) or oversold (0/8) mode, so once we push that to the extreme (+2/8 or -2/8) it is extremely unlikely (95% chance) to reverse.

Check out this illustration to see it demonstrated:

I hope this has been a helpful exercise in better understanding Murrey Math Lines!

Mike

I just started studying Murrey Math Lines, and after reading this post by Big Mike, I looked over at my chart and voila. Pretty cool.

Best,

Daniel

May 15th, 2013, 04:42 PM

buddy858

I just started studying Murrey Math Lines, and after reading this post by Big Mike, I looked over at my chart and voila. Pretty cool.

Please note, this thread is many years old, and I would highly encourage you forget MML's. It was a mistake I made during an "indicator phase".

See this thread:

Random Line Theory

I want to test something. It's simple. Place some random lines on your chart prior to the day opening, and see if at the end of the day you feel like those lines were important (try to imagine they weren't random, but some expensive or complicated …

Mike

May 15th, 2013, 06:41 PM

Big Mike

Please note, this thread is many years old, and I would highly encourage you forget MML's. It was a mistake I made during an "indicator phase".

See this thread:

Random Line Theory

I want to test something. It's simple. Place some random lines on your chart prior to the day opening, and see if at the end of the day you feel like those lines were important (try to imagine they weren't random, but some expensive or complicated …

Mike

Gotcha, thanks Mike.

January 17th, 2014, 10:33 PM

Big Mike

Please note, this thread is many years old, and I would highly encourage you forget MML's. It was a mistake I made during an "indicator phase".

See this thread:

Random Line Theory

I want to test something. It's simple. Place some random lines on your chart prior to the day opening, and see if at the end of the day you feel like those lines were important (try to imagine they weren't random, but some expensive or complicated …

Mike

Dear Mike
That certainly saves me a lot of time and experimentation.

Keep up the good work
kind regards
bobc

Murrey Math

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Murrey Math