I shorted GBP/USD because on 4hr, it flew into +1/8 and 2/8 territory.
Then a few hours later when I checked back I saw that chart was displaying it 6/8.
Is that correct behaviour or is that a defect in the indicator ?
Have the lines readjusted to different level somehow ?
If this is the correct behaviour I guess there is much more upside potential, should I be looking to exit the trade ?
Yes, that is correct behavior. If you go to the next higher time period, you will see that the market is not yet completed to higher octaves, thus the h4 time period will reset in order for price to do what must occur. The higher time periods are always in control.
The person who started this thread has written the following
"Now, if price moves beyond the +1/8 or -1/8 lines, then 95% of the time it will reverse when it hits +2/8 or -2/8. Remember, the market was already in overbought (8/8) or oversold (0/8) mode, so once we push that to the extreme (+2/8 or -2/8) it is extremely unlikely (95% chance) to reverse."
Does anyone have an interpretation about what he means by the last line ?
A) That when price goes to +2/8 or -2/8 territory there is a 95% chance of reversal.
B) That when price goes to +2/8 or -2/8 territory there is a 95% chance that price will not reverse.
I dont know, but I assume this person made some mistake and that he is saying 'A'. But not sure.
Regarding the 2/8 levels.. As a general guideline.. there is high probability that price will reverse off the 1/8 levels.. However.. If I may, the way I teach and use the octaves is based on using the 2/8 level as a stop, versus reverse price point.. More specifically, I monitor the higher periods to see where price is in reference to the octaves, as, the higher time period will tend to cause price to go through the 2/8 levels, then causing a reset of the octaves. There are specific price formations that alert us to the reset, or potential of a reset. Additionally, there are price action filters we have found can be used to identify when these resets will occur. If price hits the 2/8 level.. that indicates strong momentum. The probability of price reversal off 2/8, while imminent, does not generally occur until further price actions occurs in the direction of the initial move. Then, we look for the reversal. I will take a stop at the 2/8, and actually will reverse the position in the direction of the reset. Then exit the new position (which should have gains), then reverse for the imminent retracement.
it looks fantastic but I think it is completely incorrect and does not observe any of MM rules. The document I have says:
8/8 th's and 0/8 th's Lines (Ultimate Resistance)
These lines are the hardest to penetrate on the way up, and give the greatest support on the way down. (Prices may never make it thru these lines).
So according to the theory if prices do pierce through 8/8 and 0/8 lines ... there should be a really low chance of reversal.
Therefore, as in today, selling Silver on a 4hr time scale when prices hit +1/8 level was not a good idea at all.
However I am really not sure if I am interpretting this correctly, there really is not many videos or webinars on this stuff.
As a long time supporter of the GANN / MurreyMath Octaves and Price Rules Action, I hope this posting may be of some help and service to those who are in need of assistance in the use of the Octaves. Consider this my gift back to the community.
I have read many opinions here and on other boards regarding the use of the Octaves and the rules which can be applied to them. In fact, I have spent many years working toward perfecting their use.
If I may, I would like to share how I have been able to use them to a large degree of success. I do this in an effort that it may help someone else.
My background.. I am a professional money manager, mentor and Chief Market Analyst. I am the director of a professional trading group that uses the Octaves/MM on every trade ranging from Metals, Options, Indexes, Forex, Stocks, Bonds, ETF's. I and our group make no decisions without the use of the Octaves/MM. No moving averages, no Stochastics, no MACD, no Volume Histograms, no Bollinger Bands, no Keltner Channels, no RSI, and certainly no Elliot Waves. Only a line drawing tool and the Octaves / MM lines. We often provide our trade analysis, posting publicly for free, in advance, and do so with a high degree of success. Students learning the craft of the Octaves/MM lines are profitable in short time periods provided they follow the rules.
Now, My Gift.
There are many sites which state the rules of the buy and sell zones. So I am not going to cover them here. What TH Murrey did in developing the MML is in my opinion, nothing short of amazing, at least in the eyes of this professional. Took me 10 + years to get it, but I finally did. The practical side of the use of the Octaves is really quite simple in nature, as they deal with nature, and more importantly in my opinion, reflect the psychological force of traders in mass. Meaning, they tend to reflect the uninformed and emotional characteristics of the market traders and their reactions to the price action.
Let me give you an example; a typical move that is very profitable is the move from Level 8 to level 7 or Level +1 to Level 8. Lets set aside for the moment that Gann rules state that markets typically move 2/8 levels at time. I just want to look at the move from Level 8 to Level 7.
Remember that to get to Level 8, price must have previously passed level 6 (tough Resistance Level) and Level 7 (the beginning of the sell side zone) In that one single movement, what is taking place is the Longs are taking profits and the sell side traders are moving in. What is also occurring is the smart traders (this includes big money accumulating positions to offset credit risk and third party counter risk, funds, banks, FCMs, FDMs, Trade desks, etc.) who traded long are also reversing. So there is a process by which protective stops, sell side entry stops and market sell orders are being filled. The drive, however, is being created by those traders who were late to the party, the uninformed traders who are jumping in on the late moving trade in an effort to not miss the train... or so they thought. The Octaves, or MM lines represent the various support and resistance levels created by the price action of the markets which are a result of the various psychological characteristics of those traders.
Stops move the markets. Stops create liquidity. Stops create demand. How many times have you heard that 95%+ of traders lose money trading. They are either stopped out, or close the trade because they traded the wrong direction. The activation of those stops create movement and ultimately the final momentum and direction. The market will move until it encounters a large enough bundled group of stops to cause the market to slow its direction and reverse, even if only for a short time period. Trading from Level 8 to Level 7 or +1 to Level 8 or Level -1 to Level 0 or Level 0 to Level 1 represents that activation of a price point or range whereby an overwhelming abundance of stops are located. The primary market makers, data providers, FCMs/FDMs who are responsible for the bundling and eventual offsetting of the trades to counter parties to offset their credit risk know these stops levels. As a provider of the clearing services and trading services (The House), it is their job to know where their risk parameters are, and how their customers (The "Risk") are doing, ie: how their accounts are doing. As a result, the back-office functions provide important information to "The House" to know where a majority of the traders are bundled for stop management. Effectively, "The House" knows where the bundled or grouping of stops are located. So if you do what everyone is doing, then you will get the same results that everyone else has (Million Dollar Tip there).
The Octaves are challenging and take time to learn. However... They (the Octaves/MML), in my professional opinion, represent the top trading application available. A connoisseur of the Octaves can read the markets and be able to forecast potential market activity 2-3 trades in advance using a few simple tools. Learn the time component and your have a very formidable skill set. I know this to be true as I/we (our trade group of trained members have been successively using the octaves for about 4 1/2 years).
I have read here in one of these threads that the Octaves alone can't be used to be successful. I must respectfully disagree with that statement.
If the rules of Time and Price are understood, then trading with the Octaves/MM lines becomes extremely profitable. In any period they can be successfully used without any other tools or indicators and can be very successful, and over long periods of time. Lets look at the same example again that we mentioned previously. Lets trade from Level +1 to Level 8. This one scenario repeats itself over and over and over. 8-9 times out of 10 as Price will hit the Level +1 the first time, it will move back down to Level 8. Take a 1 hour period chart, mark that time off on a 5 or 15 min chart, or even a 1 minute chart. See how many times it hits the level +1 and moves back down to Level 8.
Question: What if, you only made the trade based on the first time Level +1 was hit in an hour's time period or even during a session such as London or New York. Meaning, the first time up to bat at level +1, the odds of it moving back to Level 8 is like 95%. The second time it attempts a move back from Level +1 to Level 8, the odds are greatly reduced. Particularly if it is occurring in the same hour period as the first reaction.
So you take the first hit, but don't take the second hit (Million Dollar Tip There). Or if you take the second attempt, reduce your lot size to represent the higher level of risk. You can always wait for the close of the bar/candle that hits the Level +1 the second time and then enter the market below the closing price of that bar for a sell entry. Your stop would be a few pips above the high of the previous or current bar. That increases your odds of success should price move from that Level +1 to Level 8 again. It would also keep you from being on the wrong side of the trade should price move higher. If price does move above the Level +1, wait until the octaves reset, then trade the new confirmed support level to the upside.
Lets look at using EURJPY (EJ) for our trade example: During low volatile periods,the spread between the different MM/Octave levels on a 5 min period chart can run as low as 3-5 pips. On a strong volatile market such as New York or London Sessions, the spread can run as high as 30+ pips.
Normally, it runs about 20. Using a 1 hour chart, spreads can range 30 - 60 and a 4 hour period chart spreads can range 80 to 120. The higher the volatility, the larger the spread. Great indication of volatility (Million Dollar Tip There).
Again, Lets look at EJ 1 hour period chart. The spread at the time you do your analysis is 40 pips. The situation of the price action is that the market has been falling for the last several hours and you missed the move down. Here is what you do.. STOP. Don't trade. THINK. Where is the market in relation to the Buy / Sell zones or in other-words the accumulation / distribution zones. Rules: -1, 0, 1 you only buy. You know these rules, they are everywhere on the web. To continue,the market has moved down from Level 4 and is selling down hard. Your emotions see this and attempt to get you to sell. After all, you don't want to miss this move down. You just missed a big drop and you don't want to miss any more of it.
Its a way to make great money, the trend is down, go for it. WHOA.. STOP. If your reading this, and the market has moved down to level 2 and is about to break going down to Level 1 and Level 0; DO Not Be A Seller. When you are a bit more advanced, you can trade the break of Level 2 to Level 1. But until then, don't do it. The worse thing that will happen is that the market will move lower and you miss the trade. But there is only a 5% chance of success here. What your emotions are expecting, ie: the lower price action, and what the markets actually do are two different things. Yes occasionally it will work.
If during this sell down this is the first time down to Level 1 or 0 or -1, particularly -1 then expect the bounce to occur from the -1 level. If you only made this one trade 1 time a session x 1 session per day x 3 days per week at +40 pips per trade (remember we are on a EURJPY 1 hour chart) x 2 standard lots x 50 weeks = about $120,000 usd per year not including potential slippage, commissions etc. Here is what we know: This occurs on all time periods, all pairs multiple times per session per day providing a multitude of opportunities. As a general rule, when EJ is moving, so is EURUSD, USDJPY, USDCHF, GBPJPY, AUDJPY, etc.. So multiply the potential opportunities x 4+ using the previous move.
Learning the rules is the key to the Octaves / MM Levels.
I also want to address this issue about the resetting of the octaves.
I see many different opinions and comments on the resetting from dislikes to not understanding them. Its because you don't understand what is going on. Here is how they work. I mentioned earlier that when using the octaves/MML lines, you must be familiar with where the market is in relation to higher time periods at all times. This means you need to know where price is in relation to the weekly, daily, 4 hour, 1 hour, etc. Draw a line on your chart for those various times periods. This will keep you on track and give you a reference to both price and time. Now, the following information that I am about to describe to you is extremely important. What occurs on the higher time periods also occurs on smaller time periods. Look at your hand. It is comprised of cells. They are bonded together and form your hand. They control the shape, size, elasticity, senses, touch, etc. They contain the characteristics that make your hand. As a whole, they work together to form the larger picture, but simultaneously, have their own individual operations taking place. Price does the same thing. Look at a 1 day chart and you see a picture. Now look at a 1 minute chart, you will see a similar picture. If I removed the pricing off the screen and removed the time period off the chart, you would be hard pressed to identify the period or even the trading instrument. But what you would see is similar price action movement. You will see various support / resistance levels, various range levels being broken, long runs up, long runs down. In-fact, you may even be hard pressed to determine the "trend". Oh and while I am on the subject of "Trend" or "Trend Line", I prefer to use the word "Trade" in place of the word "Trend". Reason is, that "Trend" in my 15 year professional opinion is just that... an opinion.
There are many occasions where you can look at a daily period chart, and price will be up for a few days, down for a few days, then back up, then back down, etc. So what is the "Trend"? I can go down to a 4 hour chart and see significant number of upward bars which would make many traders say that the trend is up. However, when reverting back to the Daily period chart, all that is occurring is a retracement within a longer down period. Yet, if I look at a weekly period chart, that time period shows a larger upward move for the past 18 weeks.
So "Trend", in my opinion, is subjective at best. yes, I know I am bucking the industry here. Lets consider for a moment substituting the word "Trade" for "Trend". If you look at a chart, as previously mentioned, to denote the price action of a specific period, we typically draw a line along a select group of lows or highs of a grouping of bars / candles to represent the continuous price movement that has been similar enough in price action to allow the drawing of a line which can provide for the highs or lows of a majority of the bars/candles to be contained above or below that line. But notice this. What happens when price crosses that line we just drew. Price changes direction and then allows for the drawing of a new line, in a different direction (generally opposite) because the direction of the momentum has changed. It has reversed. As a result of the crossing of that line, we are aware of potential action that may need to occur or not. Example: You are short the market, EJ, price has been dropping. Price stops falling and bounces as it typically does. If you follow that price action, a great majority of the time you are able to draw a line along the tops of the downward candles/bars. In doing so, you will see that eventually price crosses that line. When it does, its like Magic. Price reverses. Whoa.. it what? price is now bouncing? But I am short? I am losing money. You are losing money. You need to cover. A call to action. The "Trade Line".
If you are looking to enter a market, the crossing of the "Trade" Line is a great signal or prompt for a call to action. There are rules for its use and for trade entry, but I don't want to get into that here. So when we trade, we use "events" to create a call to action. This does not necessarily mean we make the trade. We still have to do our analysis, but this is a great trigger. Using this technique, we can trade in direction of the higher period "Trade Lines" which can act as Stop levels, Support and Resistance levels. The resetting of the Octaves is simply a fulfillment of price action of a higher time period or higher fractal period that must be completed. Example: Hypothetical price action: Lets say you are looking at a 4 hour chart. Price is dropping and is near Level -1/8. Lets say that the price level of -1/8 is 110.54 and Level 0 is 110.93. Assume market is currently trading at 111.06. You know what is coming. You can feel it, and now.. after reading this article, you can see it. Price is expected to bounce from Level -1 to Level 0 on that 4 hour chart which you just used for your analysis.
Now for the trade: You switch to a 15 min chart, or even a 5 min chart. You enter a long position at the price point you decided on. Price moves off the support level on the 5 min chart. The price moves up and down, vibrating up and down on all the various levels of the 5 min chart. Suddenly you see price move up to Level +1 on 5 min.. It backs down to Level 8 as expected, maybe even back down to Level 7. Somehow price finds support and prices rise again. We are back at +1, and rising.. wait a minute.. the rules are that +1 is a sell level. But price is still lifting.. now at +2. Wow, price is still rising. Oh wow, the octaves just reset.. Oh NO! You are short on the Level +1, 5 min chart as per the rules. Now you have to cover the trade at a loss. Geez.. I hate those octaves and the resetting.
Fast forward.. you forget something. The bigger picture. Remember the 4 hour analysis? The probability of price moving from 110.54 to 110.93 is very high. Remember the following: "Within Price Space and Price Time the actions of the bigger picture also occur on the smaller picture". In other words, the fact that price "must" (The word 'must' is used cautiously here as it implies a high degree of confidence in the natural laws of vibration of price action) move from 110.54 to 110.93 impacts the actions of the smaller time periods. In other words, for price to do what is expected of it in the larger time period, the octaves will likely reset multiple times on smaller time periods. If you got caught in a reset, it simply means that the markets are trying to fulfill higher level requirements and that you were not aware of this action to be done. So before you trade, know where the market is in relation to current and higher time periods. If the market is in the middle of an octave range, either wait for a pull back on smaller time periods, or trade a TL pullback in the direction of the higher Octave level time period to be completed.
The above is just one of the many practical applications of trading the octaves that we use.
As I am writing this, E$ moved off Level lower support levels this morning in the NY session perfectly for a 90+ pip move off of Level 0/8. Not knowing anything other than the octave rules, you would have ONLY been in a long trade and would have been able to capture part of that move. EJ did the same thing. Just taking 20 pips on each pair, not including trade management techniques like 1/2 off, trail the balance using octaves on smaller time period for stops, and other techniques, but just taking +20 pips, that was a 40 pip combined move, and if trading only 2 standard lots, was a $800.00 move in less than 2 hours. Interested in learning to do this?
I am sure some will not understand, others will criticize and even knock this down. For those who really want to get it and understand, this will be a blessing to them. I am not going to give away all our trade secrets or the whole picture of what we teach, but suffice to say, once you travel through the above information and apply it, you will begin to understand the value of the above information. If you have any plans to provide negative criticism, please hold it. We are Masters of our craft and experts / Professionals at what we do. We will gladly accept positive criticism any time. The above is not the almighty Holy Grail. It is however, an application of processes and thoughts and skill sets that can provide you a lifetime of opportunity. Trading using the Octaves, GANN, Fibonacci and even some proprietary Market Structure Trades (MST's as we call them) are not perfect. This takes time to learn and perfect. And again, its not for everyone, but it is perfect for Myself and our team of traders and members.
pss... Regarding Level 4. This is THE most difficult level to get through and it is so for a reason. There is a rule that can be used to know when to enter trades based on L4. Additionally, there are a couple of rules regarding Level 4 trade management, and for that fact, also for Level 2 and Level 6.
it looks fantastic but I think it is completely incorrect and does not observe any of MM rules. The document I have says:
[indent][indent][left][color=black][font=Trebuchet MS][size=3]8/8 th's and 0/8 th's Lines (Ultimate...
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Murrey Math is s/r lines, where this system differs is the lines have been given percentages as to when they reverse or breakout. Its kind of the same with pivot points. Most who use pivots will not trade between the first minor pivots because that is when the market is trending. Murrey has its similarities. Pitchforks or median lines, once price touched an outer line, it has an 80% chance of returning to the median line. Does that mean you take the trade and you are gonna be right 80% of the time? No. There many other variables involved for it too be that easy. No matter what system you use, you need to learn what all TF's are doing above the one you are trading, and what the lowers are doing to enter. Don't get discouraged though. Someone around here can help you I am sure. I like the system, don't trade it, I just posted to keep the thread from getting lost. Murrey is the same as Gann SQ9, too bad more people don't learn them.
As a long time supporter of the GANN / MurreyMath Octaves and Price Rules Action, I hope this posting may be of some help and service to those who are in need of assistance in the use of the Octaves. Consider this my gift back to the community.
I have read many opinions here and on other boards regarding the use of the Octaves and the rules which can be applied to them. In fact, I have spent many years working toward perfecting their use.
If I may, I would like to share how I have been able to use them to a large degree of success. I do this in...
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Didn't you post this almost verbatum on 11/26/10 at 10:26? I really hope you are truthful in wanting to help those on here and not trying to promote your company. If you are trying to help, then maybe you should post a little more.
Didn't you post this almost verbatum on 11/26/10 at 10:26? I really hope you are truthful in wanting to help those on here and not trying to promote your company. If you are trying to help, then maybe you should post a little more.
Ignored
Thank you for you comment. If I wanted to promote my company I would have put my company info out there, including my website, etc etc. This is a repost of info on another site that I posted previous, but updated a bit to reflect the current market conditions. The information is still just as important, and as applicable. I didn't ask to be contacted, didn't imply to be contacted, or anything that would even come close to it. And frankly, the mere fact that I posted the info, and only of such nature on one other occasion should tell you I am not interested in using this board to try to obtain business. In fact, just the opposite. You suggest that I post more.. wouldn't that actually infer that I am trying to solicit business. It is due to this very issue that I don't post very often as I don't want to be accused of falsely trying to solicit business from sites like these from people like you. I just tried to help someone with some information. I offered it as a gift.. nothing more, nothing less. I am very busy throughout the day and don't have time to be posting. It just so happened that I received an alert of a posting of a question to this board so I thought I would assist. Didn't really think it would generate this type of response. Rather than accuse me or suggest that I am trying to solicit business, thus creating a negative, how about some positive praise for posting some darn great content and being helpful in the process. Seems this world could use a lot more praise rather than negatives. Trading is difficult enough as it is. Keep it positive. I am sure there is someone here who this information may be of some value to. And if not, well, its free.
Touche. I read your posts, apparently you didn't read mine where I posted 'Thanks xcalibur for the insight, keep it coming', which you didn't. I would like to see this thread keep going, but it seems few are really interested in Murrey, which sucks. Also, I never accused, just making sure. BTW, I checked out your website, I followed the clues, no one ever got back to me from Dec.
I am profitable at trading but am always interested in learning new methods.
Dear Sir thank you for post on this subject. I only follow this thread for the posts of traders I know have a clue. I am hoping to shorten my learning curve and this really helped. Good luck to those that would attack you for only their own ego's sake. They know nothing.
Touche. I read your posts, apparently you didn't read mine where I posted 'Thanks xcalibur for the insight, keep it coming', which you didn't. I would like to see this thread keep going, but it seems few are really interested in Murrey, which sucks. Also, I never accused, just making sure. BTW, I checked out your website, I followed the clues, no one ever got back to me from Dec.
I am profitable at trading but am always interested in learning new methods.
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Knuckle , people like you , keep real traders away from every chat room. What is it that you have to prove at the expense of others?
I can assure you even if someone like xcalibur only posted once a year it would be more valuable to me than say you posting every day. I never read yours, as your posts are not very helpful to me. Ok go ahead and attack me now. But please leave the good traders alone.
Knuckle , people like you , keep real traders away from every chat room. What is it that you have to prove at the expense of others?
I can assure you even if someone like xcalibur only posted once a year it would be more valuable to me than say you posting every day. I never read yours, as your posts are not very helpful to me. Ok go ahead and attack me now. But please leave the good traders alone.
Ignored
OK, I will attack. You see what I have in bold? How would you know this if you didn't read my posts? So this makes you either an idiot or a liar, I am guessing a little of both. Has this guy ever posted any charts? And who are the good traders, how do you know this, and what makes them a good trader? I got some advise for you, learn the charts, not what someone teaches or says, everything you need to know is right there. But, if you are interested in learning, I would go over to the Andrews Pitchfork thread, they actually post there everyday trying to help people understand that method.
I am glad you only care if he posts once a year, because what he posted the other day is almost exactly what he posted last year, for whatever reason. Sorry I watch out for people trying to take advantage of newbies, and I am not saying he is, but there are those who do prey on the vulnerable, and yes, they do it on here.
OK, so now I am off to feed my ego and drink my beer, thanks to Forex no less.
So I am testing on demo accounts for a few days and I have realised that there are quite a few Murrey Maths Lines indicators out there for MT4 which actually produce different values !
What do I mean ?
Well the value spread of the Octaves are different so the MML are located in different places depending which indicator you are using.
Below shows a snap shot of MurreyMathlineX indicator vs MurreyMathLineTimeFrame indicator.
As you can see on the GBP/USD pair the MML are appearing in different places therefore they are giving differen signals to the trader.
What is the definitive MML indicator to be using for MT4 platform ?
Sorry I watch out for people trying to take advantage of newbies, and I am not saying he is, but there are those who do prey on the vulnerable, and yes, they do it on here.
OK, so now I am off to feed my ego and drink my beer, thanks to Forex no less.[/quote]
I never cease to wonder why it is when some person makes a few posts and "thinks" he becomes a gift , he gets the right to be the defender of the "faith". Have you ever stopped to consider that based on your posts ,and charts, some people have a very good idea of what you are up too. And that they also know you are only just another trader with a lame idea trying to prove he knows more than anyone esle. Woe to those that do not believe what he says.
I wish you good luck and good trading. Have another beer, it can kill the pain
Trading using Murray Maths and Price Action
