Murrey Math Webinars

Back in 2009 / 2010, Murrey decided to do a couple of webinars. For some strange reason, he decided to post them publicly. You can find some of them over at murrey math webinars.

Sign up for a free account with 4shared.com so that you can download these webinars. Try to go through them over the weekend. Nothing revolutionary takes place in these webinars. In one of the webinars, you will notice that Murrey tries to do live trading – and as expected, the price keeps on exploding higher – causing frame shifts. Murrey casually asks the viewers to keep on shorting. And that small losses are essential for larger profits later.

This is one of the classical shortcomings of Murrey math. Rather than following the predominant trend, this method will tempt us to keep on shorting / buying when the prices surge / fall. In other terms, Murrey’s technics will work well when the market ranges. Once it breaks out / down, it pays to go with the trend.

Anyway, I will let the viewers be the judge.

Are The Stock Markets Random?

All over the world wide web, you are going to come across loads of explanations as to why the stock markets are random. The motive of many of these assertions is to imply that technical analysis is bound to fail over a lengthy period of time.

At the crux of such explanations lies the efficient market theory / random walk hypothesis. You cannot beat the market consistently – this is a highly simplified explanation of the random walk hypothesis.

Recently, I came across an excel sheet that can generate a chart – just like the charts made by financial instruments every day all over the world; the peculiarity of this excel sheet is that it generates charts based on coin tosses. Press the appropriate tab in the excel sheet and the same sheet will produce open, high, low and close values – all based on coin toss probabilities.

Use coin toss open high low close.

I think some of the visitors will find this excel sheet highly informative / entertaining.

Seen On The Web: Almost 80% of Private Day Traders Lose Money

I came across this interesting post in Reddit. Reddit user CuriousGnu did some analysis using the data taken from eToro social trading network to reach the conclusion the interesting conclusion that almost 80% of the private day traders lose their hard-earned monies.

Check out the original post at Almost 80% of Private Day Traders Lose Money

Murrey Math Trading Articles

Murrey decided to publish a series of articles in the Traders World technical analysis magazine a couple of years back. I have collected most of them and have posted it.

While going through these articles, you will notice that Murrey spends a great deal of time trying to ridicule every trader out there who does not follow his system.

His ramblings might be interesting to the traders who are interested to learn more about murrey math.

Download from https://mega.nz/#F!7sow2JhT!XkRKDYeknNEvlCOWmBW2AA

Use Sumatra PDF to view the files with DJVU extension.

Day Trading With The Trend Or The Importance Of The Opening Price

Traders have their own opinions about trading with or against the trend. Most of them will try to catch the tops or bottoms.

The rest will try to flow with the trend.

Although many traders are more than happy to dole out this advice i.e. trade with the trend, most of them (including me) have their own versions or definitions of the so-called trend. After all, what exactly is a trend and how do you determine it at any given point of time?

I have read in a few forums where traders chime in regularly that it is easy to determine the current trend of the market. According to these self-proclaimed experts, if the price or the candlestick chart is moving downwards from the left to the right, then the trend is down.

Likewise, if the candlestick chart showing the price is moving upwards from the left to the right, then the trend is upwards.

Do bear in mind that this is just a mundane explanation which may or may not help you in the long term.

If someone asks me about the trend, I just look at the current price of the instrument and compare it with the daily opening price of the same instrument. If the current price is above the open price, then the instrument has an upward trend.

If the current price is below the daily opening price, then the instrument has a downward trend.

Bear in mind that I took the daily opening price as the reference point because I am primarily a day trader. You can take the weekly, monthly or even the yearly opening price as the reference point in order to come to your respective outlooks about the instrument.

Upon closer inspection of the stock market prices, you can jump to a sane conclusion. Every day, there is an open price. As time progresses, the price will begin to float away from the opening price.

In other words, the price will either moves upward or downward throughout the day.

On trend-less / choppy days, the price will keep on making newer highs and lows throughout the trading period.

The beauty about taking into account of the opening price as the reference point is simple. This is the only price that remains the same throughout the trading period. However, the high / low / close price can keep on varying throughout the day.

Trying to take trading decisions based on these variables (high /low /close) will put your trading career in jeopardy. Focus on the factor that is constant every day. That is the opening price.

Once the market starts, they cant change the opening price. But the high / low and the closing prices will keep on changing.

Just take some time to think through all these. I am just trying to condense the intricacies of the stock market into simple and understandable terms.

Take any chart depicting any time period. Take a look at each one of the candlesticks. In every candlestick, the close price will be either above or below the opening price.

Yeah, on some days, the close price might be nearby to the open price. We call such days as choppy or trend-less.

My question to fellow traders is this – cant you use this point (the open price stays the same throughout the respective trading period) to make profits in the stock market?

Every day, the market shows the traders where to go long or to go short.

Go long above the open. Go short below the open. It cannot get simpler than this.

Once you begin to do this, trading becomes easy and less of a stressful activity.

Just think about it and let me know in the comments.

Camarilla Equation – 1

Too much of misinformation exists about this excellent trading technique. Even the origin of the set of equations is somewhat obscure. Not many traders will be aware of the fact that the original URL that advertised this trading equation was ipickedcrash.com. This website does not exist anymore. Today, you will find two other official websites (www.camarillaequation.com and www.surefirething.com) trying to sell the same equation to the interested parties.

Using the previous day’s high, low and closing price, these equations will provide six different levels to the day traders. The traders can use the same set of equations to trade on a monthly or yearly basis too.

Back in the days before the intelligent traders could reverse engineer the equations, this trading system truly seemed to be mysterious. Using three parameters (the high, low and the closing price), it could accurately highlight some levels that the day traders need to have in their minds before placing trades.

Someone name ig0r cracked these equations by 2004 and because of his efforts, we now have direct access to the equations.

HL5 = (hi/lo)*close
HL4 = ( ((hi/lo)+0.83)/1.83 ) *close
HL3 = ( ((hi/lo)+2.66)/3.66 ) *close

LL3 = close – (HL3-close)
LL4 = close – (HL4-close)
LL5 = close – (HL5-close)

Ideally, when the price touches HL3, you need to short while setting HL4 as the stop loss. Once the price manages to touch HL4, you should go with the trend and buy at that level while keeping the target at HL5. The stop loss for this long trade will be HL3.

Likewise, if the price touches LL3, you will have to trade against the trend by buying at that level. Keep the stop loss at LL4. Again, if the price touches LL4, sell while keeping LL3 as the stop loss and LL5 as the target.

The beauty of Camarilla Equation is somewhat self evident. It allows the day traders to exercise discipline while taking their chances with the market. Unlike several other trading systems that you might come across, over here you will get clear-cut information about when to stay on the sidelines / when to jump in and place a trade / when to escape if the trade goes against the system. Stick with it for a long time and you will see the profits flowing into your trading account. The main problem is people get impatient if the equation does not give them profits for a week or so. They jump ships and end up losing money miserably. This is why I emphasize on that fact. Stick with the equation and you will definitely thank me for this post. You should not do anything if the price does not touch HL3 or LL3 on any given day.

There are several interesting trivia for this trading system.

  1. The current official sources maintain that a bond trader named Nick Stott discovered these equations. However, this is untrue. The roots of this equation came from a Canadian called M. B. Kurzencwyg by 1990.
  2. The present sources also sell another version of the equation called camarilla {b}. Until this day, no one has managed to crack it.
  3. At a point of time, a small part of the equation was listed for everyone to see in ipickedcrash.com. I am guessing ig0r must have used that opportunity to crack the code! https://web.archive.org/web/20041208122230/http://www.ipickedcrash.com/freecalculation.html
  4. By 2006, M. B. Kurzencwyg released another trading method called System 3000. No one has managed to reverse engineer this trading method too. Here is what he has to say about System 3000, “THE SECRET BEHIND SYSTEM 3000 LIES IN A MARKET’S OPENING TICK. THE DIRECTION OF A MARKET CAN BE SUMMARIZED WITHIN THE FIRST 1O SECONDS OF TRADING”

If you wish to know more about this equation, please go through The Day Trader Handbook, written by no one other than M. B. Kurzencwyg himself.

Day Trading Tips – 1

It can be hard for some traders to believe that they will have to stay OUT of the markets most of the time while day trading. At the first glance, this suggestion might even appear counter-intuitive. Think of this fact like this – the less the time you spend in a trade, the better are your chances of preserving your hard-earned money. You are at a less riskier position when compared to someone who is always on a trade during the market hours. Minimize the amount of risk you take while trading and see the profit potentials surge through the roof.

Quite often, you will come across market gurus who seem to have answers for every movement made by the stocks and currencies – after it happens. The recommendations of the others will never help you out while day trading. As a rule of thumb, you must always stay away from all / any tipsters. If they knew something is about to happen, why aren’t they making money using the same tip?

However, the beginners must always look out for advice and suggestions coming forth from the experienced traders. These experts will never talk about any stock or commodity in particular. They will only have general advice regarding trading.

For instance, you must never hold on to any positions just before major news announcements. The price might swing either sides leading to erosion of your existing profits.

Some other general day trading advice that I am willing to give away is the following:

a) Please remain mentally prepared to take a loss where necessary

b) It will not work out to your advantage to be greedy while day trading

c) Always stick to your day trading plan and never waver from it

d) Take some time to prepare for the day before the market opens

e) Likewise, know your market so that you might have an understanding of the wild price fluctuations

f) Remain vigilant during news announcements

g) Day trading is all about protecting your capital – it is not always about chasing the profits

h) Always trade with the trend and not against it

i) Do not be addicted to day trading

j) If you did not get a chance to place a trade, wait for the next opportunity. Never chase the market.

 

The points listed above might appear very trivial to some of the readers. Think about all those days when you had to incur huge losses. By all probabilities, you might have ignored one or a couple of these rules. And because you ignored them, you had to suffer the consequences.

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