Trading using Murray Maths and Price Action

Karthik, do you look at the 5min chart for entry on the breaks?

2 important charts which struck my eyes when i was going thru them...attached are the daily charts of UJ and AU.....UJ has broken thru a major daily and psychological resistance at 100 and ended above it....so it is good for a move higher...

AU chart shows that there has been a double top at 0.7202.....if u go back a bit, u can see that there are 2 other tops in the vicinity....so it is good for a great short at this point...if it breaks thru this resistance, it could go up to 0.78 atleast....

I just found this thread tonight. I am learning to trade a very similar method on the ES from a very similar thread over on ET.com. I have developed a standard SL and Target system that is profitable. Most people would be very happy with that being the case, but I am not. Both you and the other writer of the ET thread have almost identical answers when it comes to discretion of the s/r levels and how to play them. I realize that even with my profitable s/r fixed sl and fixed target levels that the market will change and that edge will be gone. I am very eager to see how you address the evaluation of PA after entry. The thing I find is that I dont know how to weigh certain pieces of info to keep me in or out of the trade. Is the trend most important, the candles at the line, the speed of the move, the angle, prior PA at the original line etc. These steps that run through both of your minds clearly are weighed the same in a second nature manner that is probably hard to describe. He too says it just takes experience, which is a very difficult answer for people like me because we wonder if we are even focusing on the right things and not headed in the wrong direction. I think I have the mental game somewhat down as losses dont bother me and I will take them as long as they have reason behind them. I do need to be a bit more patient with the profits.

A couple things that I would think some of us less experienced might want to know on top of whatever you intended on describing to PA

- reversing a trade because it breaks tends to be confusing right now because we are still trying to figure out if we had good reason to do so

- how do you know the bulls have overwhelmed the bears or visa versa ?

- do you have any key major signs that keep you in or out of a trade in regards to PA once entered. (Are there major things to keep us in or out of trades that we can focus on rather than the minor things that hopefully can help in the future. ) ex - when xxx happens, i get out almost always. When yyy happens, i wait. when zzz happens, i look to stay in longer

- how much real market screentime do you believe it takes to become profitable in this discretionary method?

Gj possible to down in monday

see my indi

risky,
what r these indicators?? care to explain ur system??

i am free now...so if anyone has any questions, feel free to ask....PM, skype, yahoo is also fine

There are loads and loads of indicators out there and so all the new traders are overwhelmed with the amount of information at their disposal and also at the number of indicators. They do not know which ones work and which ones do not and which ones to use and which ones not to use.

Let me tell you something. All the usual, well known indicators work well. In fact, that is why they are well known. But at the same time, dont expect the indicators to tell you what the market is going to do. Indicators are like tools like hammer, scissors etc. It is upto you to learn to use it and find out how best to use it. Like any tool, indicators can be used to make a lot of money and also lose a lot of money. It all depends on the person who uses it. Moreover, as i keep saying, indicators are always reactive and not predictive. They always tell you what has happened and not what is going to happen.

For those who are new, the moving averages are the best and the most easy indicator to understand and use. The MA crosses are one of the most frequently used systems as well. Of course, the MA is always lagging and so it is upto the user to find the best and most optimum use for it. Try to understand what it is and how it works and then find how you can use it to improve your trading. Moving average for n periods is just the average of the price for the past n periods. If the current price is above that, then it means that the current price is above the average and vice versa. The lesser the value of n , the more reactive the average is to the price. The greater the value of n, the more smoothed the MA would be. There are many types of MA like simple, exponential, linear weighted etc. and they are the most used indicators for trading systems. Throw in various types of MA with different periods on the charts and watch for patterns between the MA and the price and you will learn a lot.

Likewise, RSI is a very good indicator as well and if properly used, it can tell you the fibs, pivots and S and R to a very precise extent. It would be amazing, but if u get the right combination of inputs to RSI, it would be amazing to note how it perfectly matches the daily fib levels. You dont need to even see the fibs, just get the correct combination of TF and RSI and you can see the fib levels automatically. I have seen it happen and it is really eerie to see the relation between the RSI and the fibs. They just seem to know each other so well.

Try and play around with various indicators with various settings and time frames and find out the one which works best for you. There is no such thing as the best indicator. It is all upto how you use it and how comfotable you are with it.

Thanks for starting this thread, have learnt and benefited a lot from it
Can you give me your yahoo ID

its ns_karthik

Hi mate,
thanks for taking this thread seriously and going thru most of it and being diligent enough to pose some very relevant questions....

before we go on to the answers for your questions, lets first try and sort out a few things which would answer some of your questions on the own..

before we start out trading using PA or any other system, we need to be clear on what type of trader you are. are u a scalper who goes for 15-20 pips or someone who hangs on to trades for several hundreds of pips ? You need to sort this out first...the reason why this should be known is that, this is what that determines what kind of SL you should be having in mind...if u r a scalper, u typically have a SL of 30 pips for major pairs...for long term traders, u have much bigger SLs of around 200 pips....

let me tell you my own story...when i started out trading, i did not know what kind of a trader i was.....i did not know whether i want to be a scalper or a long term trader...in fact, i thought i could be both....i could scalp some trades and i could take some long term trades if i feel right....its easy, i thought..little did i realise that being either a scalper or a long term trader was in itself a tough job leave alone being both at the same time...

so, i scalped a few trades for 15 pips only to see the price move 200 pips in my direction making me think 'if only i had done a long term trade...' ...i tried a long term trade only to see the price move 15 pips in my direction and then 150 pips against me to end up in a loss and making me think 'if only i had scalped and closed it with 15 pips..'.....all this affected me psychologically and i got confused on what trades to scalp and when to trade long term.....cos of this confusion in taking profits, there was the confusion in the SL as well....i start off a trade to scalp with TP and SL as 20 pips and then i find the trade 20 pips against me, i think 'lets go long term on this one, i am sure it will turn around'...the trade does not turn and i end up with a 200 pip loss....imagine a loss of 200 pips aiming for a TP of 20 pips !! likewise, i take a long term trade and i see the trade go against me for 20 pips immediately...i think 'eeks...this cannot be right' and i close my long term trade with a loss of 20 pips !! only to see the trade work out beautifully later on....after i closed it...

this confusion keeps compounding and more than affecting the TP, it affects my SL a great deal and thats where the problem begins....now i am vey clear...i realise that i just dont have the patience for long term trades...i can only be a scalper....so i aim for only 15-20 pips a trade and i am happy to get it...i really dont worry if the trade continue in my direction even for 200 pips....i am happy with my 15....i know the market will be there and i am happy with what i get cos i know that if i keep getting 15 pips for every trade i make, i will be rich soon....but i ensure that i stick to the SL precribed for scalp trades....i really dont have any confusion in that...

so my daily target is also only 50 pips though i easily exceed it....it is this understanding of what kind of trader u are is the one that determines all the other stuff....

you might have seen some big trades from me....those happen cos my confidence has grown...they also happen cos it just so happens that i am away from the screen for sometime after opening a trade and i come back and see it with a profit of 100 pips....!!!

anyway, coming back to your questions :-

1. reversing a trade - this comes with experience....nothing special...while trading, the more u r a machine, the better...dont think...dont waffle...just do what the PA and the charts say...if u dilly, dally, esp. if u r a scalper, u r dead....so if i go long, find that a support gets broken, it means that it is a short now (thats what PA states, a support broken means that its a short), so i just reverse the trade...

2. bulls bears - this is difficult...most of us realise the trend only when we are in the middle of it...what happens is that we realise a trend, start trading with the trend and then loose all the money and more when the trend changes cos we dont anticipate the trend change and we are still not sure of the trend and we are married to the old trend....thats why, u should trade like a machine...if u do that, esp. when there is a trend change, u r safe....if it hits ur SL, take it....go on and take the next trade as the chart says....dont get married to the trend and keep increasing ur SL hoping that it will come back.....leave that to the experts....some people can find the trend early and can afford to do it....but this is just not something for the newbies...as a scalper, i really am not bothered abt the trend....

major signs - once i have entered a trade based on 1H SR, i switch to lower TFs and look for signs of reversal like pin bars, stalling, previous SR...stalling and previous SR are the sure signs where u need to take profits....sometimes, u could stay in a trade and wait to see if a previous SR is broken...in such a case u get rewarded with more profits for taking this risk...

screentime - as much as possible...this market is like chess...everyday, new things come up...it is not a set piece...so its just a question of getting used to do the same things again and again and again...this comes only with practice...as much of it as possible....this is more of a psychological thing rather than any special trading skill....if u have ur mind correct, u could be successfull in less than 2 weeks....

hope i have answered atleast a bit of what u hoped for....

Thanks for the response. Lots of it does make sense and I pull my s/r lines from 1hr and 4hr TF's and then scalp off 1min entries. The problem is when to call a loser a loser. I am not sure if you are familiar with the ES but my SL is set to 2pts but that is my blowout stop and that still is fairly tight with the current volitility. My ideal situation is to get out around -.75 pts with a reason that I understand the trade is against me. I seem to get stuck in getting out too quickly and not letting the trade breathe or waiting just a bit too long and taking a 1.25-1.5 loss. Being that I shoot for a 1:2 RR even as a scalper, it makes it a bit difficult because I cant seem be confident in price action in those judgements.

Hi ....

i just found this thread.

just wanna ask what is the best setting for murray math line...

normal setting 64.. did u change it?


have anice weekend...

i have not changed any settings...

was looking into eminis just now for the first time...looks similar to trading currencies and looks very doable using MM levels....unfortunately for me, with me sitting in India, its very difficult to find a good broker for me to trade eminis.....if only.......

Excellent post Karthik and perhaps meet the experience of all traders just they even understand clearly what type of traders they are like & certainly do mostly as scalper & should reside on that side from now .

fontu

Though we scalpers go with PA without any prediction but certainly some analysis may help understanding market moves .
Just trying to understand GJ at it's presend status ( ? by this time market open may change a lot ) .
using daily chart with SR indicator & elliot wave count possible :
PA weekly cosed at 148.62 well above the good SR 148.33 inbetween 7/8MM & 8/8MM and can easily go up breaking 149.21 .8/8MM & upto 150.66. As I also plotting Elliot wave it will be the end of impulse wave 3 & tracement for wave 4 will be due , PA will be unable to break 8/8 MM successfully & try get next support through 7/8MM and 6/8MM . By this time the more possibility to have the support as per EW at 141.77 ( perhaps by the time forex open & if with GAP down ) to ultimately go UP through again 7/8MM,8/8MM & overshoot till 159.28 to complete wave 5.
fontu

Hi N

ES was very nice on Friday . we are very close to the 7/8 line on the daily with a bearish div in both the volume and rsx . So i am expecting a reversal form an impulsive up move to 8/8.

Intraday price could not get above Thursdays high . and we actually moved down in the previous square ( the blue lines are the 64 period squares) all the way to -2/8. I gave my buddy the long right off 824.25 , that was the -2/8 mml .. what a trade !!!! the reversal when markets are this oversold can be 9,10 or 11 octaves and we have seen price move up as per the rules 8 octaves

In the new 64 frame price is just above the 7/8 line , and being friday I am not sure what to expect BUT I see 8/8 at previous high and am expecting a reversal off this zone and for sure nor higher than 875

I am going to try and couple MML in with VSA .. that would be very powerful.

not so simple

gj has symmetry of moves right now 1400 up 1000 down. 149 was top of symmetry , 60 min has bearish div rsx . I am also seeing major divergences on all indexes right now and on daily charts alot of indexes are in the 8/8 or higher range. I think we have reversal week this week or early next week. The volume on DJ friday was the lowest up day volume I have seen on daily since the start of bear rally.

bearish div on rsx is building .. last time i saw this building for such a long time was 250 zone

we could overshoot to 150 , but this is also the 4/8 mml of the 128 frames and will act as strong s/r . This could be the level we bounce off for move down to test 6/8 at 143.75 and maybe lower.

150 on its own is a major level of s/r i think there will be a lot of sellers and profit takers in that zone

thanks Malcolm...i am previleged to have u post in my thread for the first time...Guys, he is a guy who i admire for his trading skills....i am a full time trader and a profitable one too but i am proud to say that Malcolm is someone who i admire...for one, he is a scalper like me but he also predicts the long term moves very well...

anyway, yes the ES seems good for a reversal as it is very close to strong resistances...btw, i guess the charts are from esignal....does esignal have MM indicators?? i am not able to find any in my charts??

combining MM levels and volume would be a huge thing...in fact, that is something which i am trying to do as well...i am sure it would work great especially for ES....which broker do u use??

even i feel that 150 would be the max that this can go to for now....i have seen u talking abt symmetry in the other thread as well....how do u determine symmetry ?? and why do u think it would work ?? any specific reason??