Murrey Math Trading Strategy 5

I have seen this play out numerous times in different markets all the time. In fact this strategy is also present in the so-called learning CD Murrey used to sell a good number of years ago.

The core strategy is to wait for the price to touch +2/8 and then sell at that point. Likewise, if the price touches -2/8, then buy at that price level. Set the stop loss according to how much money you are willing to lose in any given day i.e. according to your risk appetite. Always trade with a suitable stop loss. Target is dependent on whether you buy or sell. If you sell at +2/8, target is -2/8. If you buy at -2/8, target is +2/8.

Here is the strategy in pictorial form:

Leave a comment if you have any other doubts about this great trading strategy.

Murrey Math Trading Strategy 4

A common complaint with this trading system is the following – it works only when the market ranges. When the market begins to trend, the common Murrey Math strategies seem to stop working.

This strategy focuses on using Murrey Math to trade with the trend. The core idea is to buy at the break of +2/8 or sell at the break down of -2/8. Stop loss set for the trade depends on whether you buy at +2/8 or sell at -2/8. If you buy at +2/8, set the stop loss at -2/8. If you sell at -2/8, set the stop loss at +2/8.

By doing this, you will be able to trade the predominant trend.

The +2/8 and -2/8 levels serve as an effective mechanism to filter the noise and choppiness out of the markets.

Here is the strategy in pictorial form:

Murrey Math Trading Strategy 3

In my previous post, I mentioned a strategy that could effectively help you to capture the current trend of any financial instrument. However, if you apply that strategy (at least for a considerable amount of time), you will begin to notice that the markets always act choppy when the price is in between 7/8 and +1/8 or 1/8 and -1/8. Whatever meager profit you had managed to accumulate following Strategy 2, will end up getting eroded from your trading account due to this choppy price action nature of the market.

This could in fact explain why I have decided to post Strategy 3 this month. This method simply helps you to avoid at least a small portion of the choppy price action exhibited by the financial instruments.

Here is the strategy in pictorial form

Rather than trying to guess the top and bottom of the market, this strategy effectively helps you to keep on trading with the trend. 4/8 is an important value because it divides 0/8 and 8/8 into equal halves. So, if the market is trading above 4/8, it will definitely have a tendency to keep on moving higher. Likewise, if the market is trading below 4/8, it’s tendency will be to keep on going lower.

Obviously there are going to be days when the market stays in between 3/8 and 5/8. On such days, your trading account will take a major hit because of the choppy price action. The best thing to do in such situations is to call it a day and stop trading. This is one of the drawbacks of the strategy. Even Murrey himself proclaims that the market will often try to stay in between 3/8 and 5/8 (as often as 43% of the time). So he suggests doing the exact opposite of what I have posted as strategy 3 (i.e. to sell at 5/8 and buy at 3/8).

Another point to note is that this strategy is not something that I found on my own. There were a couple of text documents written long back – I am not able to locate them online at the time of this post – this strategy was explicitly mentioned in one of those documents. If I find them, I will post it.

Murrey Math Trading Strategy 2

Every month, I will post an unique trading strategy based on Murrey Math. Here is the strategy for this month.

Enter the high and low for the time period you wish to trade. Now pay close attention to 7/8 and 1/8. Wait for the instrument to touch either 7/8 or 1/8. If it touches 7/8, sell at that price. Stop loss for this trade will be +1/8.

Similarly, if the price touches 1/8, buy at that price and keep the stop loss at -1/8.

Now, the markets are always unpredictable. Once you sell at 7/8, there might be instances where the price might surge even higher and touch +1/8. If it does so, please follow the trend and buy at +1/8. Stop loss for that long trade will be 7/8. Likewise, if you buy at 1/8 and see the price falling down to trigger the stop loss set at -1/8, then sell at -1/8 and follow the trend. Stop loss for this short trade will be 1/8.

Here is the strategy in pictorial form.

In the meantime, do checkout Murrey Math Trading Strategy 1

Murrey Math Trading Strategy 1

All those interested in Murrey Math now have a reason to rejoice. Starting this month, I will keep on posting several strategies that you can use to take advantage of the daily price movements in the stock and foreign exchange markets across the globe.

Use the excel sheet found over at https://candidwriter.wordpress.com/2018/05/05/murrey-math-excel-calculator/ to calculate the levels accurately. The High and Low price taken depends exclusively on the time frame you focus upon to make trading decisions. If you are a day trader, use the current day’s high and low. Swing traders can look at the monthly highs and lows.

Sell at 7/8 or 8/8 or +1/8 and even +2/8 with the target of 4/8. Alternatively buy at 1/8 or 0/8 or -1/8 or -2/8. Once again, the target is 4/8. This is the core strategy Murrey implies throughout his courses and webinars available all over the internet.

Does this strategy work all the time? No it doesn’t. However, it works when the market ranges on a particular day/month/year. Over the years, I have found that even though prices tend to range a lot, the percentage of winning trades are extremely low. Quite often, I found the prices taking some rest once it reaches these points (7/8, 8/8, +1/8, +2/8, 1/8, 0/8, -1/8 and -2/8) and then surging through these prices as if they never existed.

I am listing this as the first strategy because this is exactly what Murrey wants us to do with the trading system he had discovered sometime at around 1992. As expected, I had spent quite a lot of time looking at this simple strategy only to theorize that it works well when the instrument you are trying to trade ranges a lot instead of trending. Perhaps it could also explain why Murrey asks us to focus on longer time frames.

Here is the entire strategy in pictorial form.

Stay tuned for the next strategy.

Plagiarising Content Without My Permission

One of the reasons I stopped updating this website is due to the rampant levels of plagiarism that exists among Indians. They show no shame in copy/pasting my content and posting it as their own in their websites. Recently, someone informed me that an article I had written about Murrey Math has found its way to https://www.mcxniftytips.com/day-trade-using-murrey-math/

I did a google search for this website and found that there are numerous complaints against them for fraud and cheating their subscribers. No wonder they decided to plagiarise my content!

It can be disappointing to see my curated content being copied and published in other blogs. At least have the courtesy to give some credit to me.

I had originally posted the article on http://ezinearticles.com/?How-to-Day-Trade-Using-Murrey-Math&id=9173936 on September 2015.

Murrey Math Excel Calculator

Update: I had to take down the Murrey Math excel sheet (that was originally present in this post) on account of copyright issues. Sorry.

Traders have their own belief systems. Some think that trend trading works. Certain other will keep on praising counter-trend trading systems. The market trends at times and simply chops around at some other times. In short, there is no definite way to trade and make money every day. Traders need to find something that they are comfortable with and stick to it.

In this post, I would like to give away an excel sheet that I found online. This excel sheet calculates Murrey Math levels accurately. Just enter the high and the low of the financial instrument in the excel sheet. The sheet will generate certain values. Use the sheet to take the appropriate trading decisions.

Download the excel sheet from Murrey Math Excel

As far as I know, this sheet generates the most accurate values. It provides values that are much more inline with the ones that are present in Murrey’s Trading Manual.

Warning: While using the excel sheet, please do bear in mind that Murrey does not ask us to consider just the high and low of the financial entity. In fact, the exact terms he uses on his book is as follows – Setting up Mathematical Rhythm for your Stock (Setting up range of Fluctuation and not off high or low).

In simpler terms, Murrey is asking us to set up the range of fluctuation using some other method – but not by using the day’s high and low. To learn the exact way to set up the range of fluctuation, you may have to attend his (expensive) courses. I am asking the traders to take the high and low of the instrument because it eliminates confusion and keeps us in tune with the markets.

This in turn implies that my approach is fundamentally different from Murrey.

In the meantime, feel free to check out some of the Murrey Math Trading Strategies.

Murrey Math Trading Strategy 1

Murrey Math Trading Strategy 2

Murrey Math Trading Strategy 3

Murrey Math Trading Strategy 4

Murrey Math Trading Strategy 5

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