Draw a horizontal line that makes sense to you and trade away from it in the direction of the candle color.
There are many ways to do this. I prefer to draw the line on a higher TF and trade that line on a lower TF.
Forget about shooting stars, twisting swirlers, dumping dumplings or whatever they are called Since many people know them, their alleged significance becomes less anyway; they will fail many times.
This might provide some more insight as well: The illusion of control:
The illusion-of-control effect in MG results from the fact that a strategy that has performed well in the past becomes crowded out in the future due the minority mechanism: performing well in the recent past, there is a larger probability for a strategy to be chosen by an increasing number of agents, which inevitably leads to its demise. http://www.er.ethz.ch/presentations/Illusion_of_control_Zurich_CCSS-conf19Aug08.pdf
Just follow the rat and enjoy the banana as a reward
Nothing is more powerful than an idea whose time has come - Victor Hugo.
More powerful than the will to win, is the courage to begin - anonymous.
Just downloaded this indiactor...are there any setttings I need to be aware of? I wonder what timeframe it is using to calculate the lines (i.e. whether it works in an Australian timezone)? Most pivot point indicators either allow you to enter OHC manually or enter in the timeframe used fro calculation. I see no such option with the MML indicator (but maybe this is unnecessary?)
Here is my breakdown of Murrey Math confirmed by a professoinal trader who is a certified teacher of MM by Murrey himself.
Price is traveling through all the sub-octaves of a binary algorithm of the square of the number base simultaneously. 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).
Murrey Math 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 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. This is the Square-in-Time. 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 weak 1/8th or 7/8th lines to move through these lines, long and short respectively, for safe trades. These lines are weak and price will run through them at least to the next 1/8th line. Prices within the “pipe” which is 3/8 to 5/8 are channeling and are avoided. Price breaking through the pipe is trending and moving. Bouncing off the pipe is support or resistance. Price above 8/8 or below 0/8 is extreme and may reverse. A break beyond +2/8 or -2/8 will result in a frame shift and moving probably with the trend. 2/8 and 6/8 are pivot lines. 0/8, 4/8 and 8/8 are support or resistance lines.
Retracements in a bigger 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.
The MM interval sizes that are possible are 100 divided by 2 to the Nth power. N is an integer between 5-19 for currencies. An N of 1 to 4 would be more applicable to stocks. Of these total 19 sub-octaves only 15 relate to currencies and really only 8 apply to short term trading. Currencies are in two groups of 8 sub-octaves because of their price values. Ones worth 70 to 250 (GBPJPY) would be in a different group than those selling for less than 2.00 like the GBPUSD.
I have highlighted in Murrey’s book many places where the words he uses suggest that all sub-octaves control the price movement by the MM Lines rules in different amounts of time. So my approach is to try various amounts of time and let the MM indicator find each sub-octave for a read of where price is within that sub-octave for a decision as to a trade direction and entry. When you specify P (periods) in the MM indicator you will find only one sub-octave.
A 64 day sub-octave interval will be large enough to trade for a good amount of pips. Typically 60 or 78 pips. These come from the subdivision of 100 by 2 repeatedly. Then smaller amounts of time 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 trend read out to one year of time (256 trading days).
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