The Murrey Math Trading System - page 28
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The charts may move around, but you can zoom out using the MM-Octave-v5 file. It also looks like you traded a triple news event. My GMT based charts have these three events line up with the spike.
1:30pm USD Nonfarm Employment Change high impact 92K 130K 51K 1:30pm USD Unemployment Rate average impact 4.4% 4.6% 4.6%
1:30pm USD Average Hourly Earnings m/m average impact 0.4% 0.3% 0.2%
The information that I'm most interested in at this point is that immediately after the news event the price approached 0/8 1.2680 but didn't cross it, and then approached 8/8 1.2711 but didn't cross it. During the news event it pierced the 8/8&0/8 line 1.2711.
Now here is where we have an issue :/ In Octave this line would be shown with the larger container cell. In comparing my Octave v5 output versus your chart, the Murrey Math numbers are not the same. When using Octave v5, there is a major line at 1.2750 for EURUSD. In v4, 1.2695 is the nearest major line I see on your picture.
Looking at your chart, 1.2756 is supposed to be a 4/8 line, a line with strong resistance. A weak signal keeps crossing it. On my chart, 1.2750 is a major line, with very strong resistance. It is crossed over and back 2 times between 11-02 00:35 GMT and 11-02 08:00 GMT. In both cases it was a steep line not a weak one. 1.2687 is a minor 4/8 line and it is crossed very briefly.
I'm looking at this and thinking. If my math is correct on the MML, then 11-02 00:35 shows a retreat down just before -1 at 1.2734. The line retraces up to the 2/8 line 1.2781 and pierces it briefly. Murrey's Law said it would go all the way to the 4/8 minor line 1.2812. This sounds like a break in the law. On the other hand, we could be simply too zoomed in for the laws to hold? The market resolution may not go as as far?
On your event (according to my chart) we go from +2 1.2781 that isn't held right down to touching 4/8 1.2687 and coming back to 6/8 1.2719 (all minor lines). The trade strategy we might use would be from crossing under +1 at 1.2766, sell at 4/8 1.2687 for a 79 pip gain. If the 4/8 line isn't shot straight through, it will reverse and come back up. So far it approached 6/8 line 1.2719 but didn't cross.
If I look at prior news events, I see a few Major Lines getting crossed or holding and quickly retreating. 1.2500, 1.2626, 1.2750. It took a news event to push through 1.2750, which became a new support line barring a few sharp crosses. Another news event pushes through the support, and you see the secondary support line of 1.2687 crossed but reversing on 10-31 07:15 GMT and 11-03 13:30 GMT.
I think we need to
#1 compare old lines vs new lines for EURUSD (validate or deny my chart mod please!)
#2 Does the 0/8 4/8 8/8 lines truly act as support/resistance? If the market is ranging they should be crossed by steep lines ONLY. We need examples where this is not the case.
#3 Do trading predictions made by MML work? +1 +2 -1 -2 retracing to 4/8?
#4 When don't they work?
#5 What news events coincided with the violation of those trading strategies?
The issue I'm having here is that staring at this chart, it makes perfect sense historically. The +2 line 1.2781 was touched but (on a sufficiently zoomed out time scale H1) didn't close above the +2 line. We see a reteat back down to 4/8. It functioned perfectly - historically. If the news event had gone the other way, we would have closed above the +2 line after 3 days.
On 10-26 07:00 GMT we crossed a +2 line and closed above it. It continued to climb. Delay since crossing the major line 1.2625 was about 6 hours.
On 10-19 we crossed the same line, and then retrated below 4/8 as predicted.
On 10-16 14:00 GMT we cross under 1.2500, don't reach the -1 of 1.2484 and retrace back to the 4/8 line 1.2562. Exactly as predicted.
In playing this forward time scale, I'm not sure the predictions hold for the most recent event. In M15 the law is broken by the most recent event, in H1 it holds by a hair's breadth because the time scale changed the "closing price" high. If I had done a short sell with a +2 stop loss, the stop would have been triggered. If I had done a short sell with an H1 close on price over +2 the system would have held and generated a profit but how far could it have moved in an hour? I'm thinking about a hard stop at the +2.5 line, and an "H1 On close" exit.
I feel disconcerted about the H1 hack, but AFAIK we won't know if it is truly to MM standards until we calculate MM time intervals, and then break them into 64 slices, treating each slice as closing data.
I suppose I should load the old template and see if the 0/8 8/8 and 4/8 lines seem to act like support lines as a way to compare old vs new MML numbers. The chart you showed doesn't seem to use 4/8 as support/resist.
Xard777, staring at your charts has brought me to a new state of happiness. The currencies have a positive correlation between GBPUSD and EURUSD. If you compare my v5 EURUSD charts to your v3 GBPUSD charts, the major lines, +1 +2 and 4/8 are all in the same positions.
Our world has order!
I also love seeing your commentary on how signals can confirm, contradict or support MML based strategies
Chart is different
Hi Xard777,
First of all I would like to thank you for all your nice works and very useful setups!
Using a slightly modified version of one of your charts I am getting different chart on GBPUSD actual position and that would result in different consequences since on my H4 chart the price closed above +2/8 on 1st November at 16:00 (GMT+2). Could you find out what the reason is for that difference? (Please find the image attached.)
Edit: I think the difference could come from usage of different periods: My chart was made with periods = 32 and yours probably with P = 64. Would you please advice on this?
My original thoughts on MM was how it would reverse after entering the overbought and oversold area and head back towards the 4/8th halfway point; most times it would go past this 4/8th point and stop on the 3/8th and 5/8th lines (the first time) and continue on towards the 0/8th or 8/8th lines (depending on which direction it was coming from). When it was time for reversal it tended to reverse off the midway point between 8/8th & ±1/8th or ±1/8th & ±2/8th (known as the baby 4/8th).
Here is a current piccy's of cable showing this on the daily and close up on the H4.
Xard777Hi Xard777,
First of all I would like to thank you for all your nice works and very useful setups!
Using a slightly modified version of one of your charts I am getting different chart on GBPUSD actual position and that would result in different consequences since on my H4 chart the price closed above +2/8 on 1st November at 16:00 (GMT+2). Could you find out what the reason is for that difference? (Please find the image attached.)
Edit: I think the difference could come from usage of different periods: My chart was made with periods = 32 and yours probably with P = 64. Would you please advice on this?Hi Chrisstoff,
The chart I posted was an octave chart based on natural octave numbers which are static (do not change) regardless of the data period; your chart is a timeframe octave which shows a range of data over a certain period of time (32bars, 64bars made up of daily, hourly or 30min bars etc..).
Murrey uses these static octaves to explain his system to everyone, then reverts to the timeframe to try and pick the best frame for that particular period. You use the timeframe chart to do just that and I show you the static octaves printed on the left in white on your timeframe chart (under Octave Data) which you kindly posted. There are three columns of data; on the chart I put up, the second column was mml lines and the third column was baby 2/8th lines (missing out the odd numbers). So basically you have both type of charts on the one screen. As price moves up/down, the third column will change followed by the second column, so if you use a calculator you will see that the chart I put up was already there in front of you in the octave data when price hit 1.9133 showing +4/8ths in the third column.
(Your piccy shows price moved down an octave in the third column...
8/8 = 1.9043
0/8 = 1.8982
Diff = 0.0061
an octave up = (1.9043 + 0.0061) = 1.9104
8/8 = 1.9104
0/8 = 1.9043
baby 4/8ths = 1/2 of 0.0061 = 0.00305
+4/8 = (1.9104 + 0.00305) = 1.91345 chart high was 1.9133
or simply add 0.0061 to the +4/8th 1.9073 on your chart = 1.9134 (rounded off)
I hope this helps
Xard777
Ps the chart that you put up is using a period of 32...the reason you can tell this is that it sits nicely in the middle of the screen....the 64 period is more to the left of the screen. Also currencies are meant to use a period of 32 as default (but that is up to the individual reading the chart). If you prefer to change to 64 simply right click the mouse button on the chart screen, select Indicators list, MM Timeframe v504 and edit input section...you will see the 32...change to 16,25,32,48 or 64
Thank you, Xard777 for the answer and the detailed explanation. Well, I was thinking on the meaning of the three columns of numbers and your explantion helped me in understanding it now
.
Yes, I am hesitating about choosing the most suitable period for Forex. Murrey said period of 32 is the suitable one for Forex but I read others use 64. I repeteadly switch from 32 to 64 and vice versa and - as far as I can recall it - Murrey himself suggested this switching somewhere in his descriptions.
But it generates questions: Which period and which timeframe are the best since different periods and different timeframes give different advices? I know, I have much to learn about Murrey Math and perhaps the answer is somewhere in the text I have not read yet. Although, I would appreciate if you had time to post here how you use this system in your trade.
Thank you again!
TKnotes1.html gives a description on how to choose the period, and it points out several flaws in the method provided. There is a method (with simple math) to detect the error for choosing your period.
I still need to review Xard777's code for octave selection. I have been too distracted by other events lately.
I have gone through all posts of the 31 pages. I both enjoyed and benifited from your thoughts and suggestions. Thanks to you all.
Here we go...octave spreadsheet....will auto update if Metatrader is running.
I get Error:502 for timeframe while using Open Office. Is this the same result as you get with Excel?
question about time periods
hi
i am just checking the MM indicators in the thread and i have a question about the period lengths being used.
i think most people use 64 or 32. my question is; this periods starts from the moment you select it in the indicator window. for example if you use the MM on a daily chart on a monday. the indicator will use the values of the previous 64 days. and will only change if the price moves out of the box. what if i on thursday i open the indicator and type in 64 again in the period box will the indicator reset itself and look back from thursday for 64 days?
basically i want like to know how the MM indicators look back over there chosen period. it is not very important on the daily chart but it might be important when using 64 periods on smaller charts such as the 5 minute chart. i hope you understand!
The time period itself is not valuable data, it is used to calculate other information like the "zone defense", "chance of reversal by grid position" and other data. Also, the time period is not doesn't have a 1:1 match with time intervals in ticks. This is a somewhat complicated calculated number.