The Murrey Math Trading System - page 31
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I became rather motivated today after that last writeup. Here is my evaluation of the MM rule I've been talking about.
RULE: If price goes over MML, buy at recross MML. TP 4/8, SL +2 -2
No indicators needed besides MM Octave v5. No confirmation signal was checked, just a simple buy rule on retracing the 0/8 or 8/8 line.
Each date is a violation of the rule. Each "i" is a win. Two dates on one line I skipped those dates.
EURUSD
2003.12.03 start iiiiiiii
2003.12.29 27h iiii
2004.1.15 4h
2004.1.16 74h iiiii
2004.1.27 6h iiiiiiiiiiii
2004.2.18 4h ii
2004.2.20 6h i
2004.2.25 15h ii
2004.2.27 5h iiiii
2004.3.16 12h iiii
2004.3.31 7h i
2004.4.02 8h iii
--4.13 - 5.04--
2004.5.05 8h i
--5.07 - 5.24-- i
2004.5.25 41h ii
2004.6.08 16h iiiiiii
2004.7.07 25h i
2004.7.20 5h iiiiiiiii
2004.8.24 13h ii
2004.9.10 8h near
2004.9.13 48h iiiiiiiii
2004.10.15 71h i
2004.10.20 44h iii
2004.10.28 26h
2004.11.01 6h iiiiiiiii
--11.13 -1.9-- i
2005.1.21 6h
--1.21- 2.3-- iiii
--2.15-3.23-- i
2005.4.1 23h done
26 loss <31pip
98 wins 62pip+
Total Pips Win 6076
Total Pips Loss 806
Max Consecutive losses: 2 (occurred 3 times)
Max Consecutive wins: 12
If other people could contribute by doing the same sort of counting method for other currencies I would greatly appreciate it. The timeframe I used was H1 with a scale of 8 on MMOctaveV5. I would like to turn this into an EA, especially with some Money Management.
I've been working on a trade exit modification program, to be run with EA or manual trades. It would furth drastically increase the profitability of this EA.
I learned a lesson yesterday I thought I would share regarding Murrey Math.
The TP and SL levels set to the 4/8 and +2.5 line are working very well, but I made a mistake when I was applying them. I did a sell on NZDJPY at 2006.11.13 10:07 GMT. Price was 78.06, SL 78.32, TP 77.39. At 2006.11.14 21:15 the price hit 77.39 exactly. I had used a 5 pip buffer above the 4/8 line because (accurately so) the support line was not touched. The trade didn't exit because I didn't account for the 6 pip spread between bid and ask. The graph showed the bid price, but my trade would have exited on the ask price. Normally this isn't an issue because people make momentum based or fuzzy based trades. With precise profits precalculated, make sure you account for spread!!
Had the trade exited at 77.45 (ask price), the profit would have been 61 pips. *sigh* at least it was only a demo trade, live and learn... hopefully other people don't make my mistake on real accounts.
I could have exited the GBPUSD trade I mentioned earlier at 1.8837 for a profit of 203 pips but I'm holding in there still to see how the trade goes. Trading for real, I don't think I would have passed up the $2000 win.
This is just one trading signal too. I recently bought the book with the other 63 trading signals MM has. I need to finish the trade exit code (a trade helper with advanced TP+TS and 9 other strategies) and then back to MM. I hope the book arrives before MM time
Edit: I only did one simultaneous trade. We could do one trade per signal, but that would mean counting the times the MML is crossed before exit. That would be a lot of counting, but easy to change in code later on in the EA with a MaxTrades option.
Hi, Daraknor
Really appreciate your contribution on the MM system.
One question, how could you apply the Octave V5 on the H1 for back test as V5 is stationary. I don't think its necessary to back test the MM system because if the MML is not working, Murry will not publish his book and launch the courses.
I wonder if your future MM EA will be shared with others or just use ppl like That Famous EA Writer. Sorry for my words.
I wish all the best to you and your work.
asam
Because the price is stationary, I omitted some dates outside the range. This is a fast and dirty eyeball check that I'm doing. If we get a few more confirmations like this then we know the trading rule is decent. Part of the reason I posted this was so we can #1 verify MM #2 draw attention to it #3 practice using it before an EA comes out #4 more eyeballs looking may notice things I didn't.
The way to really test this of course is to make an EA and backtest it. A MM EA may only have 4 parameters:
Money Management = true
MaxCurrLots=5
Lotsize = 1.0
MinPip=20
MaxPip=300
No tuning, parameters, etc. The MinPip/MaxPip would ultimately decide how low of an MML to fractally generate, and how high to generate. A MML line may be true, but we might not want to wait 3 years for it finish.
(640 pip USDJPY SELL trade, etc)
The MML don't require MMI at all. However, MMI are useful for knowing which MML are relevant. If you read the TKNotes1.html section about selecting the active grid, he talks about this for a great deal of time. He shows that the purpose of the grid calculation is to find out where the price activity occurs, from there you can mathematically and programmatically determine if the MML is either a "support MML" or a "resist MML". This is important because (as they sometimes mention on trading advice news) a former support line becomes your next resist line.
When doing the summary above, I only looked at the price action relative to MML and did not calculate MMI at all. If the price surpassed 0/8 or 8/8 and didn't exceed +/-2 before hitting 0/8 or 8/8 again then I treated it as a buy.I recorded the number of hours between the buy and any violations that occur later. This is probably not very important data, but I'm trying to understand the MMI from both directions (study and practice).
If the price went past +/-2 before crossing the 0/8 or 8/8 line, I didn't consider a buy. After such a movement, I mentally stayed out for a little while until the price substantially went into the 0/8 to 8/8 range again. I subjectively measured "substantially" and *that* is what MMI should tell us. I think we should likely eyeball collect the time period before it "seemed" to stay within the 0/8 to 8/8 lines, and also "reinitialize" the trading algo after the price hits 7/7, 6/8 or 5/8 and then count #1 hours to hit the line from +/-2 and #2 the violations that would occur after reinitializing. That wouldn't be MMI, but the hourly data will give us clues on selecting an MMI period based on 4, 8, 16, 32, or 64 hours, M15 periods or days.
At the very begining of this thread, there was an article by Murrey that gave a hack on how to make a 64 day period stretch to a 65 day calendar. In it he also talked about splitting the day into 4 or 8 hour periods. A stock trading week is 40 hours, forex is 144. by ignoring some sunday trading (which would likely be best for trading anyway) we could come up with a 128 hour week through a similar time hack. All of this is speculation at this point, I'm waiting on Murrey's book before I jump into MMI with a vengeance.
To do the type of eyeball verification I listed above, I think we should completely ignore MMI for now. To advance our understanding of MM, time period is necessary but I feel that I have insufficient information to make the periods line up well. I have already seen one hack to get MM working with Forex, I wouldn't be surprised if there were more.
Hi guys,
For those of you who are seraching for the the ultimate trading system, you've found it. Delete all other indicators from your MT and only use MM. Forget Octaves and all other detailed MM trading advice. If you want consistent trading profits, then only trade the extremes in MM (+1/8 and
-1/8) I trade a live account and NEVER close a loosing position. This is beacause I don't over spend. I always have enough margin to ride out a bad run. I never use a stop, don't need to. Have stopped the death by stop trading method that hast cost me a lot of money over the 2 years I've been trading. No other indicator I've seen works like MM. Even the recalculating is not a problem, because the very essence of the market is you WANT it to recalculate, otherwise you're using stale data (octaves) I've not had a loosing trade since Oct 1st, I'm up 400 pips in real money, no trading stress, no signals, no alerts, can switch my computer off and return to the market at my leisure. My monthly target is only 100 pips, I repeat this over and over. I have had more trades than I need in Oct/Nov because it was just too easy to ignore, but generally when I've made my 100 pips I leave the market, this keeps me alive (from overtrading) The market will adventually move away from the MM extremes, I've been caught going short (for example) on a 1/8 set my 100 pip profit target and walked away, when I restart my computer to collect my profit, I see the lines have recalculated themselves and I'm down 200 pips, do I panic and close my position, no way, I look for another trade and leave the loosing one alone, it will always return. Why? because the market is already at an extreme, it doesn't just keep on going and going, it eventually snaps back like a strectched rubberband. I've never been caught out, hope I never am, but no other trading plan has worked for me like this. If I see the market approaching a 1/8 or -1/8 I simply set a limit order and walk away. I don't worry about announcements, war, oil, or complex strategy, I just keep on collecting pips. For those of you who will have a laugh at me, keep on making money your way, I'm very happy for you, for those who have lost money on forex trying to find a system that works, then try this. I simply can't work out why the forex markets move the way they do, I've studied them for hours on end, now I don't care, don't need to. I hope these comments have enthused a few of you to make money. This thread is vey good, but I find it can overtrade, just keep it simple, the hardest thing you will find in my method is to be patient and to use money management wisely. 1 trade per month (100 pips) is enough to make bucket loads of money in time. Even I had trouble ignoring the other 2 trades I didn't need. But an extra 2 trades in 1 month is nothing like trading evey 2 nights (like I used to)
I welcome any positive comments or clarity on how I use the MM system to trade successfully.
Thanks
CC
method
I want to ask a couple questions.....
the time frame on your charts.....
I guess only one question..
thanks
Please check over my chart
I am using the template and indicators provided earlier in the thread...
can someone just eyeball my chart and see if it looks appropriate......
I appreciate that...
thanks
http://charts.dacharts.com/2006-11-18/DaveM%20-%201.png
If you use Xard's templates, please use currencies that have a value higher than 1.5625. I show 0.7687 as a 4/8 and 0.7625 as a 0/8 line when the fix is applied.
I use MMOctaves v5 for currencies under 1.5625 in price. I'm still waiting for the Murrey Math book...