Murrey Math and Quantum Method

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1. Options in forex are sometimes shady because for one most brokers take the opposite side of your trade, aka if you lose they win. Also most really only offer payouts that are 70% of your trade. You can tell if a broker is trading against you based on if they offer commission or not. A broker like Nadex who charges trading fees has no incentives to make you lose since they make money from when you trade. The way Nadex is set up allows you to actually "trade" options, buy and sell them rather than most other sites which are basically one click gambling sites.

2. The payout of 1:11 represents the MAX PROFIT that you can make from a trade. Now this is calculated given the expected volatility of a pair, the time remaining, and if there is news. So if there is a big news event the payout probably won't be 1:11, but maybe cut in half to 1:5 or 1:3 depending on how big the news event is. Each pair has their own calculation for X amount of pips needed for X reward So EURUSD will get a larger payout than GBPUSD for a 20 pip movement because 20 pips for EURUSD is not as likely as a 20 pip movement for GPBUSD. For GBPUSD a 30-35 pip movement is the equivalent of a EURUSD 20 pip move.

3. Yes the market orders are always filled. Nadex as far as I know doesn't take the other side of the trade, they charge commission. Again finding a reputable broker that does this is hard. If they don't charge commission they are likely trading against you.

4. No. And that is what I was saying. The max you can lose on a trade is $80 BUT, let's say your trade hits -$80, you haven't lost that yet. Price can come back down 40 pips and then your trade would be in profit and you would win. Options basically lets you have a stop loss that can be HIT MULTIPLE TIMES and still go into profit. So essentially I could sell at the +1/8 line with a binary with a risk of 8 pips and reward of 92. Price could move up 10 pips but the most I could lose is 8. Then price could reverse and my trade would be in profit. Price could move 50 pips against me but my loss is capped at -$80. That same -$80 can go into profit again if price comes back down, I do not need to place another order. You are never "stopped out" from a trade.

The point of buying a low risk option for $8, isn't that I expect it to reach the full profit level of 92, the amazing 1:11 risk:reward. I expect price to move enough for me to make a profit. That 1:11 risk:reward does not happen often, EURUSD moving 20 pips in 2 hours is rare these days. If price moves lets say 15 pips instead of the full 20, then the option price might reach 40 or 50 and I get out with a risk:reward of 1:5. But only certain brokers will allow you to buy and sell options before expiry, just as you would for stock options. I rarely hold an option to expiry, instead I use the leverage to buy lots of low risk options and wait for the price of that option to go up so that I can sell it and pocket a decent profit.

@Goldensniper, not necessarily. There is this idea that options in Forex only gives you returns less than your investment. To say that you can get a 100% - 500% return on an option is not really discussed among these forums since they are usually associated with a scam or as you said the "lotto." That is because most options brokers simply give you options that say "if price is 1 pip higher in 10 minutes you get 70% of your investment." This is essentially gambling. When you can buy and sell different options before expiry, this is trading and requires much more analysis than the usual binary option. The added variable of time and volatility offers another dimension for analysis however you gain the advantage of low risk and high leverage.

The strategy here is to use MML which can predict reversals fairly well to buy cheap out of the money options in hopes that the price of that option will triple or quadruple once the reversal happens. This is possible because those pricing the options do not take into consideration MML or key S/R. To the broker, the expected volatility should be normal, thus they price their options at a normal rate. However we know that there is a high volatility reversal coming therefore we can take advantage of the "miss-priced" option.

Here is an example: At around 3:30 am I saw some resistance around the +1/8 4 Hour line (I think it was the +1/8 hourly line too, the lines have been recalculated since). I sold an option priced at $67 (a $33 risk), stating that "EURUSD will be 9 pips lower than the current price at 7 am." I bought 10 lots of this so my max loss on the trade would be $330 if I let the option expire out of the money. I could close it earlier at a lower loss if I think it won't be profitable. This usually is too much risk for me but I was sure it would reverse. I could have gotten in at a price closer to the +1/8 level, I was not paying attention and bought the option after it reversed 10 pips already.

I managed to close the trade when the option was priced at $26.5. Price was about 10 pips lower than where I bought it and there was 10 minutes left until expiration. If we are selling we want the option to be priced lower than where we bought it, so now the option priced at $26.5 is approx worth $750 ($100- approx. $25 x 10 lots = $750). I closed my trade for about $400 profit which makes sense because I sold it at $67 and bought it at about $27, a 40 point difference in the price of the option.

I made $400 off of a 9 pip movement using 10 lots. In forex that would have taken me 40 pips. If I had bought the option at a much better price say $90, a max risk of 10 and it reached a price of $50, I would have made 4 times my investment. But that is the beauty of options. Based on calculated risk using time, volatility, and proximity to the target price, you can take advantage of small price movements and leverage them with options, all while limiting your risk.

What I would have done differently here is take a much lower risk trade, perhaps an $8 option stating it will reverse 20 or 30 pips then buy it back when the price of that option hits maybe $25-$30, it is less profit, but it is less risk. I bought the option after significant rejection at the +1/8 level, I could have gotten in at a better price and lower risk.

These screenshots are taken from my account statement but I will try to take pictures of the trades as they are happening.

Congratulation!
Description pleae your rules
THX

Thank you very much. I'd like to give it a try. May I ask you your setting file, please?



keep on. Thanks
toni

EURUSD Hourly

Quantum =32 x 24 h = 768 .

EURUSD Daily

Quantum = 32 .

The indicator is useful Sohocool, I especially like the ability to shift it some on the chart.
I've set it @ -50 taking it left a little and off the current candle area. I've noticed with this the
Quantum signals also shift staying with the lines so I've set their color to none and loaded quantum
itself which is a good work around for that issue. Means I can keep them on the candles where they belong.
I have the actual Quantum number set at 64 as well, matching your settings in the indicator.
Watching, catching the actions as PA moves, realizing a few things. For instance I notice
adjusting that Q number adjusts the spread of the indicator lines. Other things I'm looking at as
well, the way the lines expand and contract, the steps ups etc etc. All showing us something.

Just a final thought, it's no biggie and not sure of it could be done but if possible next build perhaps
the Q boxes could stick with the candles. Meaning quantum indicator wouldn't need to be loaded, but as
I mentioned, no biggie. I've explained my work around that ^_^

cheers and thanks

I sent a similar message to a member who wanted some help with MML, so I'll post it here as well. For those that want bigger profits and less screen monitoring time I think as many have stated before, that trading in the direction of higher time frames is important. I just wanted to demonstrate how one would go about this analysis before placing a trade.

Higher time frames always take preference over lower time frames. Lower time frames are for entry to scale into larger trades in the direction of higher time frames.

Lets take this GBPUSD set up that could have been taken on 3/21. My set up is to have the next higher time frame MML on the current time frame. So my H4 chart will show the daily MML, my hourly chart will show the 4H MML, and my 15 minute chart will show the hourly MML.

1. If you look at the 4H chart you will see that there is plenty of "space" above price, there is no daily resistance for a while, plenty of space for profit. Also it is oversold.


2. If you look at the hourly chart there is no significant 4 hour resistance. The 3/8 level is not really important in terms of MML reversals, and if you look at the chart the 3/8 line does not clearly represent any resistance.

3. Although not pictured here, the 15 minute candle bounced off of the -1/8 line hourly and we would have bought here during the london trade and had nothing but profit until the NY session.


The takeaway is to make sure there is enough space in the higher time frames to make a decent profit, and then use the smaller time frames to pinpoint an entry.

Here is a good set up. We see rejection at the daily +1/8 line on EURUSD. Also price is at +1/8 on 4 hour line.

15 Minute recently just bounced off of 1 hour 4/8 line and is heading down.

I hope that I understood , is what you asked for.

I separated the quantum period from the Donchian channel period .(in fact we have two "donchian", now.)

Shift : only for Channel.

Normally Shift only positive.

First picture : Quantum period =128 , donchian periode = 64

Second picture : quantum period =64 , donchian period = 128

Looking at several CAD related pairs some of which have reset from the break out of the extreme levels after waiting for the M15 candle to close.

On these CAD pairs I've resisted from making an entry.

NZDCAD is on my watch list however the bulls are still driving price higher at this time.



Observation time but looking for signs of rejection at the resistance level shown on the chart by the red rectangle.
A break up through this zone could see price tag the +2/8 level in which case I'll reassess for a short again in that zone and not before.

Masterrmind............

NZDCAD

Now short



1 lot on this trade since the MML gaps are smaller than other pairs otherwise I'd likely trade it with only 0.5 lots or maybe as low as 0.25 lots.

Note: If PA looks to drive up hard past the resistance level then the trade may be closed out earlier. There is no need to endure excess loss in pips if chart structure gets broken and this is key to preserving an account.

Masterrmind............

watchlist UJ

EURCAD

Also on my watchlist as too is GBPCAD.

Note that CAD pairs are not really my preferred instruments to trade so if I take another entry whilst the NCAD trade is open it will be with small lots.

Masterrmind............

EURGBP

Now long off the -1/8 MML.

Looking to TP just under the 4/8 MML.

Lower lots applied at 0.5 on this entry.

Note: Now that 2 trades are active I will not be opening any additional orders unless at least 1 trade is closed out.

Masterrmind.............

NZDCAD

+10.4 pips



Masterrmind............

The EURGBP trade will be left to play out over a longer period of time.

The stop has now been tightened up a little to just below the -2/8 MML but TP remains up just under the 4/8 MML.

Have a great day trading,

Masterrmind.............

Oops forgot to load the chart as I use it with Solocools new indicator, will now go in and load the update. Basically yes you got it Soho, Quantum signals on the candles, nice work. I didn't expect such a quick reply though, thanks for the time doing that.

First charts the original version with quantum on the lines indShift is set @ -40 The Q sigs look a bit out of place there, which is why I wanted them set on the candles as has been done with the update.
What I'm trying to do with quantum is trade them not as they were originally supposed to be traded, take the signal as it appeared on the chart. This leads to a tremendous drawdown, shudder no thanks. I had the idea a while ago well why not take the trade when the trend had actually turned. Not so easy though picking when that happens which is where this new indicator appears so helpfu. Hence I'm trying to take Qsigs as a reference of where to buy after the turnl. At the yellow area on the chart the dochian line is at oversold. Testifying also to this is the RSI set @ 4, green, and @ 14 red. The buy signal being as 14 crosses 4. The blue is an indicator named Accumulation Spread Index. Also testifying of oversold/overbought. When the 14 RSI shows divergence the ASI is better at showing the actual turn.
I didn't but if I had taken the trade long at the RSI cross over using those two Qsigs as the reference there's 100 pips each available. This is what I'm trying to do anyway.
Davits pivot on-board as well which is why I've set this @ -40. TDI-clone's in there as well set as color none so I can run angelator. Buttons so I only need to have one chart loaded rather than a dozen or so, 1 click and there's that pairs chart, easy. So much just as well my comps a powerful one ^_^

Second chart, same pair and the updated indicator. Still using indShift but the Qsigs are still set with the candles, beautiful.
Ill go in and mute the line color some and I've reset the colors to yellow as a pivot and evened up either side of the rest.
7 sell Qsigs there but resisting as news latter tonight and I'm thing there still some upside to come

Thanks again Sohocool

EURGBP has now been closed out.

Masterrmind.........

Enjoying marrying up Quantum and Murray levels: