Murrey Math Trading System

Murrey Math is a technical analysis tool that is used to identify potential support and resistance levels in financial markets. It is based on the work of T.H. Murrey, who developed a set of mathematical rules for trading in the 1990s. Murrey Math uses a system of nine lines (MML) that are drawn horizontally across a price chart. These lines represent important price levels that traders can use to make trading decisions. The lines are based on a series of mathematical calculations that take into account the high, low, and close of a given period.

Natural Gas Futures Framed by MML Highlights Extreme Overbough and Oversold Levels

The nine lines of Murrey Math are based on a series of ratios that are derived from the number 1/8.

The lines are as follows:

  • 1/8 (or 0.125)
  • 1/4 (or 0.25)
  • 3/8 (or 0.375)
  • 1/2 (or 0.5)
  • 5/8 (or 0.625)
  • 3/4 (or 0.75)
  • 7/8 (or 0.875)
  • 1 (or 1.0)

Murrey Math Founder T. Henning Murrey

T. Henning Murrey from Nashville Tennessee was born in 1942. In 1993 Murrey worked on theories of random thinking, importantly by NOT studying the market. From this he wrote his trading book and then in 1995 Murrey rediscovered what Gann hinted at in his book, the six clues. Murrey translated the algorithms of a Fractal inside a Cube set to the Base Ten to exact Fibonacci Ratios set to the scale of Music.

Traders can use Murrey Math to identify potential areas of support and resistance. When the price of an asset is approaching one of the Murrey Math lines, traders will often watch for a potential reversal or breakout. If the price breaks through a Murrey Math line, it may indicate a trend reversal or a continuation of the current trend.

Tesla was a classic example of euphoria with the peak at the Weekly +2/8 MML

KnovaWave and Murrey Math

The main assumption in Murrey Math is that all markets behave in the same manner akin to a herd. This agrees with our concept of reflexibility, that the market in a constant state of flux or perpetual chaos. As such the market is seeking to find equilibrium, which is the point of extreme chaos, (i.e., Tops and bottoms or inflexion points). These are also the points of extreme market behavior, and why we place so much value on sentiment indicators. We came upon the Murrey Math techniques in our development of our KnovaWave Dynamic Gann methodology.

What we found was that The Murrey Math trading system is primarily based upon the observations made by W.D. Gann in the first half of the 20th century. While Gann was purported to be a brilliant trader in any market his techniques have been regarded as complex and difficult to implement.

MML here with Ichimoku and Fibonacci confluence on the S&P500

The great contribution of Murrey Math (T. H. Murrey) was the creation of a system of geometry that can be used to describe market price movements in time. This geometry facilitates the use of Gann’s trading techniques. Significantly it added the turning point methodology that alluded us in refining Fibonacci levels. The Murrey Math Trading system works totally in harmony with our Gann Fans and Angles.

One of the prime purposes of KnovaMind is to improve the quality of life. When we come to trading it is important to limit the negative Emotions and resultant stressors. This is why we have created a trading system within KnovaWave to espouse those KnovaMind life qualities. The mass majority of people, let alone traders do everything by habit as such the majority’s logic is set to emotions.

Our Logic in the KnovaWave method is set mathematically, even a reading of other’s emotions (sentiment) is done mathematically! This allows for harmony within to take advantage of nature’s harmony in the market and significantly the intuitive factor to dominant NOT your emotions. This is why there are very few “super traders” but they all have one thing in common, they are in harmony with themselves.

The reason we have incorporated Murrey’s thoughts in our system is because Murrey Math allows you to memorize where your market will reverse (in the future).

For the Mathematicians out there the Murrey trading system is a Pure Random Binary Math Fractal of Perpetual Motion. This is not new the Chinese learned to trade inside a cube set to the Base Ten in 3,125 b.c. (Lu Chu?s Magic Square of 9). Murrey uses a square of 16, most logical Chaos is set inside the Square of 16.

Two Kinds of Chaos

  1. Pure Mathematical Logic that dictates setting Chaos to a ?perpetual? cycle.
  2. Random Thinking where you are engulfed as a “creature of habit” seeking equilibrium, where is that equilibrium?

For most people it is when they are comfortable with everyone around them. Perhaps the best example is when people are happy in others misery. Perversly one is comfortable to lose if others are losing. One cam break that nexus-it doesn?t have to be like that to be comfortable!

In this form of chaos, you set your own rules and view them as true, if you have a winning trade for example, then if it stops working then it is false, and you remain in that emotional rollercoaster that most traders experience. Look at how many traders accept large trading losses and even brag about it years later? Also look at how many people use tips and insider information and lose! But worse they are happy about it!

Discover that this mathematical logic is what makes the market tick in a rhythm of perpetual chaos and you will overcome the drawbacks of ego and habit and be well on your way to a successful career of trading and investing!

It’s worth noting that Murrey Math is just one tool among many that traders can use to analyze financial markets. As with any technical analysis tool, it should be used in conjunction with other indicators and analysis methods to make informed trading decisions.

Trade Smart

From The TradersCommunity Research Desk