The Murrey Mathematical Lines Strategy is the most attractive Forex trading strategy because it is suitable for all timeframes and it can be used to trade different markets like stocks, commodities and currencies Forex.
Murrey Math is a complex set of support and resistance levels that work more or less like pivot points but they also provide some insight into whether the current trend will continue or it will reverse. The Murrey mathematical concept was developed by T. Henning Murrey in 1995 and is described in great detail in his book The Murrey Mathematical Trading System for All Trading Markets.
First of all, we must stress that one of the main principles of Murrey’s mathematics is that markets behave similarly. So the main assumption is that smart money behaves the same in all markets and hence why different markets have similar characteristics.
Determine the murrey . math lines
Murrey mathematics was based on observations made by WD Gann during the first half of the 20th century. Murrey mathematics was inspired by Gann theory and he created a geometric system that could be used to describe objects. market price fluctuations over time. That geometry facilitates the use of Gann trading techniques. Murrey Mathematical Geometry is so elegant that its simplicity makes the Murrey Mathematical Lines Strategy a perfect automated fractal trading system. The core element of Murrey trading is that the price movement of any market will recede in multiples of 1/8, 2/8 through 8/8. Because price moves in 1/8. Murrey math divides prices into 1/8th periods.
Murrey’s Math Series
Murrey’s Math lines include 8 Google pivot points with each line having a different meaning for price action. Basically, the strategy that Murrey mathematical lines does is divide the price into 8 important levels with 8/8, 4/8 and 0/8 being the most important levels.
Now,
before we move forward we must define the indicators you need to trade the Murrey Mathematical Lines Strategy and how to use the Murrey lines.
The only indicator you need is:
The Murrey Lines indicator can be found on most popular Forex trading platforms (MT4 and TradingView) in the indicator library.
Murrey lines have nine key components or variables plus 6 additional pivots that can reveal overbought or oversold conditions and each of them will tell you a different story of price action as follows: :
[+3/8] P – Reversal is imminent
[+2/8] P – The condition is beyond extreme, can be reversed at any time
· [+1/8] P – Conditions exceeded
· [8/8] P – Maximum resistance, overbought condition
· [7/8] P – Weakness, stop and reverse positions
· [6/8] P – Strong axis reversal
· [5/8] P – The top of the trading range
· [4/8] P – Key support/resistance pivot point
· [3/8] P – Bottom of the trading range
· [2/8] P – Strong, Rotate, Reverse
· [1/8] P – Weak, where to stop and reverse
· [0/8] P – Hardest line falling below, oversold condition
· [-1/8] P – Oversold condition
· [-2/8] P – Oversold condition, can be reversed at any time
· [-3/8] P – Bullish reversal is imminent Now that we have a solid idea of what each Murrey line represents it’s time to outline the Murrey trading rules. Without further ado, here is a step-by-step guide to trading Murrey : Line Strategy trading by Murrey Math (Buy Trading Rules)
Step #1: Check 15min timeframe and make sure we are trading below 4/8 Murrey Lines (Blue Mid Line)
The first buy condition of the Murrey trading strategy that needs to be verified is that the price needs to trade below the 4/8 Murrey Lines level. While this strategy can be applied to all timeframes for the purposes of this Murrey trading strategy, we will be using the 15-minute chart. Murrey lines are dynamic pivot points that change with the price action flowing which is one of the reasons why price action will usually be contained between 0/8 and 8/8 Murrey lines with the 4/8 axis being the level. most important. Also, read this strategy on day trading price action . Price trading below 4/8 Murrey Lines is not enough to bring us to the next condition of the Murrey Mathematical Trading Strategy:
Step #2: Once the price is trading below 4/8 Murrey line, it also needs to trade below 2/8 Murrey line.
The main reason why we also need price to drop below 2/8 Murrey Lines is because we need price structure to create space between Murrey lines. This will ensure that once we break higher again, it will increase the probability of successfully breaking through 4/8 of the Murrey line.
A picture says a thousand words, so here’s what you should see:
Now all we have to set up is where to enter our long trade, which brings us to the next step of the Murrey Mathematical Trading Strategy:
Step #3: Enter a Long Trade Once we reverse and cross above 4/8 Murrey Lines.
The Murrey 4/8 line is a line in the sand for buyers and sellers and has the ability to accurately signal a change in market sentiment once it breaks. In this regard, we want to enter with a buy market order as soon as we cross 4/8 of the Murrey line.
Alternatively, if you want to be more cautious, you can always wait for the breakout candle’s closing price to make sure it’s a genuine breakout. Now it’s time to find out where is the perfect place to hide our stop loss, which brings us to the next step:
Step #4: Place your protective stop loss below the 0/8 . Murrey line
The Murrey 0/8 lines are the hardest pivot for the price to drop below that’s why it’s the perfect place to hide our protective stop loss. There’s also no need to add any additional buffers as we don’t want to lose more than necessary. Now let’s move forward and establish where to take our profits:
Step #5: Get Partial Profit (Preferably 50% off your full order) at 6/8 Murrey Lines and also move SL to BE
The Murrey 6/8 line is the first strong pivot from where the price could reverse so we want to take our profits right there. At the same time, the next action that you need to take is to protect your remaining position by moving your SL at BE. Now let’s move forward and see where we should liquidate the rest of our trade.
Step #6: Take Last Profit at 8/8 Murrey Lines
Finally, we have to close our trade once we reach the 8/8 Murrey line, the last resistance level, signaling overbought conditions in the market. It is important to mention that if the market breaks the 4/8 pivotal point multiple times on both sides, it is best to wait until you can explicitly apply the Murrey trade setup by applying Step 1 to Step 3. Note** The above is an example of a buy trade using the Murrey Math Trading Flow Strategy. Use the same – but opposite – rules for a sell trade. In the image below you can see a real SALE trade example using the Murrey Math Trading Flow Strategy. Here are some trading conditions you want to avoid in the forex market. Conclusion
The Murrey Mathematical Lines Strategy is the ultimate support and resistance system because unlike simple support and resistance levels, Murrey lines are mathematically driven and have a greater influence on how price reacts to each of these levels.
The same Murrey trading principles set out in this article can be applied to any instrument because, according to Murrey, all markets work in a similar way to a herd, and can be use on any timeframe so it can suit your trading style.
Thank you for reading Murrey Trading Strategy.