Henning Murrey from Nashville Tennessee was born in In Murrey worked on theories of random thinking, importantly by NOT studying the market. From this he wrote his trading book and then in Murrey?
The Murrey Math Trading System 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 reflexability, 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. 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. What we found was that The Murrey Math trading system is primarily based upon the observations made by W. Gann in the first half of the 20? While Gann was purported to be a brilliant trader in any market his techniques have been regarded as complex and difficult to implement.
The great contribution of Murrey Math T. Murrey was the creation of a system of geometry that can be used to describe market price movements in time.
Significantly it added the turning point methodology that eluded us in refining Fibonacci levels. Murrey Math is a trading system for all equities. This includes stocks, bonds, futures index, commodities, and currencies , and options. The main assumption in Murrey Math is that all markets behave in the same manner i. The Murrey Math trading system is primarily based upon the observations made by W.
Gann in the first half of the 20th century. The Murrey Math trading system is composed of two main components; the geometry used to gauge the price movements of a given market and a set of rules that are based upon Gann and Japanese candlestick formations. The Murrey Math system is not a crystal ball, but when implemented properly, it can have predictive capabilities.
Because the Murrey Math rules are tied to the Murrey Math geometry, a trader can expect certain pre-defined behaviors in price movement. By recognizing these behaviors, a trader has greatly improved odds of being on the correct side of a trade. The overriding principle of the Murrey Math trading system is to recognize the trend of a market, trade with the trend, and exit the trade quickly with a profit since trends are fleeting.
An understanding of the concept of a fractal is important in understanding the foundation of Murrey Math. The book was published by Springer-Verlag, copyright The size scale of basic geometric shapes are characterized by one or two parameters. The scale of a circle is specified by its diameter, the scale of a square is given by the length of one of its sides, and the scale of a triangle is specified by the length of its three sides. In contrast, a fractal is a self similar shape that is independent of scale or scaling.
Fractals are often constructed by repeating a process recursively over and over. Each of these charts has been drawn using different time scales. Some are intraday, some are daily, and some are weekly. None of these charts, however, is labeled. Without labels, could you or anyone else distinguish a daily chart of the Dow from a weekly chart of IBM, or from an intraday chart of wheat prices. All of these charts, while not identical, appear to have the same general appearance. Within a given time period the price moves some amount, then reverses direction and retraces some of its prior movement.
So, no matter what price-time scales we use for our charts they all look pretty much the same just like a fractal. Gann also divided price action into eighths. Gann then assigned certain importance to markets moving along trend lines of some given angle. Gann also assigned importance to price retracements that were some multiple of one eighth of some prior price movement. For example, Gann referred to movement along the 45 degree line on a price-time chart as being significant.
The problem is that as the price of a commodity changes in time, so must the reference frame we are using to gauge it. How should the square of price and time the reference frame be changed so that angles and retracements are measured consistently?
One could argue that Gann recognized the fractal nature of market prices changing in time. This is exactly what Murrey Math has accomplished. Here below is a short description extracted from a document published a few years ago by Tim Kruzel , which since seems to have disappeared from the face of the WWW.
Hardest line to fall below oversold. Take a look at these:. The same is true in the opposite direction: Why does price do this? So before it jumps outside of its comfort zone, it needs to be sure hence the retest. The above illustration tells us the following: Check out this illustration to see it demonstrated: I see a lot of interesting posts on your blog. Your email address will not be published. This graphic illustrates the following: Take a look at these: Comments I see a lot of interesting posts on your blog.
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