The Murrey Math Trading System - page 35
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I have the $82.50 book now. It comes in a spiral bound notebook in two parts. There are 263 pages in the book itself, normal font, lots of words on each 8.5 x 11 page. Almost no graphics at all. Separately, there are 326 half page charts with notes, MML, MMI, examples, etc. The books are almost pure Commodities and Stocks.
The material goes from long winded explanations involving golf, to very detailed math and timeframe explanations about the concurrent cycles and motivations in trading. I have only read 100 pages so far and my head is swimming. That is coming from someone who read a computer book per week for 4 months straight mind you.
I haven't seen the Murrey Math system described accurately anywhere else but here. There is so much data, so many references here. I started to read the material following along on charts, but it took about 5 minutes per page. I'm going to read the book (manual?) cover to cover and then go back and sit with charts on specific parts.
I am firmly committed to using 64 day time frames as an initial adoption method. The first day of each Murrey Year starts on the first frost, and the opening day of the bond market. These firmly link commodities, stocks (through interest rates), forex (through interest rates) and other things... like golf. 64 day charts also provide a lot af signal:noise filtering.
I skipped around the book looking for more data regarding time frame hacks, but for stocks and commodities none are needed so none were disclosed. (Excluding the forex market.) The 64 day cycle makes common sense for forex.
If other people could do research, I am interested as a matter of curiousity when the bond market starts for London, Switzerland and Australia. If any meaningful data can be collected on Euro markets that would help. I think Japan has no meaningful government bond market, so that may be a dead end but potentially useful if trading action is high on announcements that confirm their short sighted policies (forexfactory news brief compared to broker volume data should be enough).
On a rather unnerving note, it appears that almost all of the information from other sources is confirmed to be inaccurate, often by the original author. TKNotes is flawed, and was never intended to be released. Kurzel released a Metastock plugin, also confirmed to be flawed. The AMM.exe DOS file is the most mature version Kurzel's work, with the least flaws. Attached here for your reference, it is originally from http://finance.groups.yahoo.com/group/mmxapp/
I don't know if AMM accurately reflects the 300+ charts Murrey provided. It appears I will need to load up day end stock data from a website and confirm the numbers by hand. I am still uncertain after a brief glance if AMM calculates time frames because the terminology is different, but I believe it is inaccurate if it is calculated (since no date is requested).
If anyone is a student of Gann, I highly recommend the "Murrey Math Trading System For All Markets" because it deeply dissects the Gann trading rules and points out where information is incomplete about applying them.
I think I realize why Murrey is selling MM now. He wants the credit, not the money. Nobody has really acknowledged him well, but he really really does have something here. I have been very forward about denouncing trading systems in private and sometimes on forums... but this one has me hooked. Murrey claims to have the Holy Grail of trading systems. I can't confirm that, but I'm certainly not going to deny it at this point. It seems complete too - interest rates, trend prediction, reversal prediction to the number, 4 different ways to predict reversals (all of which appear accurate at first glance, and no one way could predict all), price movement within, entering and exiting time frames... I can't think of anything missing aside from predicting which way news will go. He might have shown that most news is simply irrelevant, the example he provides need very critical examination. Our (initial) response a few pages back was that while Murrey may not predict the news, the system still seems accurate during news spikes - not 100% prediction, but not breaking the observed rules either.
Murrey claims 93% accuracy, and he may very well have it.
I think I will write an EA with some indicator functions built in for machine processing. Making a time frame indicator with the information I'm confident in right now is simple: draw 4 lines per year on the chart, counting 64 days from the opening of the bond market. Deeper than that, I still can't turn fuzzy concepts into real code yet.
Since MML are accurate intraday on forex (higher liquidity, etc) the appropriate timeframe should be as well.
A full implementation of the "art on chart" would be a series of lines at angles from the top left and bottom left corners, a series of parallel lines (possibly 3 if you want the rare lines too), 5 concentric circles, a timeframe that is hard coded at specific times (unchanging as the chart fills in), and fractally scaling all of these drawings. Knowing how to interpret this data would require ... a good deal of study that an "8th grader can do."
Right now my motivation is to make an EA that tests one trading rule, and see how it performs. I found some clarifications for the trading rule, and I will attempt to reverse engineer verify some of my timeframe assumptions using the optimizer in MT4.
After making an EA that trades MM profitably, I will likely contact Murrey to resolve the Forex intraday timeframe issues. I feel I need to do a lot of homework first.
The indicator all the way
Well, if someone looks up the date information on the different bond markets that would help. Maybe we can all write it together too, because once the square is drawn it is just a matter of playing connect the dots with lines, and then adding circles where a few lines intersect.
One more thing I forgot to mention earlier, Murrey Math tells us what slope a trend has to be for it to be a long term slope. It is a different slope for indexes and stocks. Currencies weren't mentioned, but I think they trade similarly to indexes. (indices? *starts singing "Singular and Plural"*)
I should as a disclaimer note that the Murrey Math manual could use some serious proofreading, so the ( has a matching ) and so on. Sometimes a " never ends, and I don't know if he is quoting someone or not still, esp regarding Gann. Minor issue, but high quality > low quality. This is a print from second edition 2005.
The dates in October are all over the month for different interest rate releases.
The Fed manages each quarter ending on the last day, so Oct 1 was the first day of the new "Fed Quarter" but I still haven't confirmed the date of the US Treasury Bond Market. (section is bolded in the MM book)
https://www.newyorkfed.org/newsevents/news/markets/2006/fx061116.html
That contrasts rather sharply with the actual interest rate releases, 3 weeks later.
If we get this date wrong, none of the diagonal lines will match properly, trend reversal days will be off, etc. I suppose empirical evidence would be the best confirmation of both MM and the actual date.
Have just gone long the CHF @ 1.2146 as per MM -1/8th
CMC
I think I realize why Murrey is selling MM now. He wants the credit, not the money. Nobody has really acknowledged him well, but he really really does have something here. I have been very forward about denouncing trading systems in private and sometimes on forums... but this one has me hooked. Murrey claims to have the Holy Grail of trading systems. I can't confirm that, but I'm certainly not going to deny it at this point. It seems complete too - interest rates, trend prediction, reversal prediction to the number, 4 different ways to predict reversals (all of which appear accurate at first glance, and no one way could predict all), price movement within, entering and exiting time frames... I can't think of anything missing aside from predicting which way news will go. He might have shown that most news is simply irrelevant, the example he provides need very critical examination. Our (initial) response a few pages back was that while Murrey may not predict the news, the system still seems accurate during news spikes - not 100% prediction, but not breaking the observed rules either.
Well written
CMC
futile and frustrating attempts at just drawing things on the chart manually. One of the complications of doing this is that the rectangle needs to be treated as a square, and then, relative to the rectangle-as-square, angles need to be drawn at 11.25, 22.5, 33.75, 45, 56.25, 67.5 and 78.75 degrees.
Ideally they can be hidden and displayed with a keystroke, coming from the 0/8MML, 0/8 MMI corner, and again from the 8/8MML, 0/8 MMI corner. The connecting locations would be along the MML and MMI, at the 2/8 4/8 6/8 8/8 6/8 4/8 2/8 spots.
This would be easier if I could force one year of data into the same width (in pixels) as my MML is tall. The 45 degree angle should go from upper left to lower right, and again from lower left to upper right corners.
I started off making a 1 year timeframe, because it should represent 4 complete cycles (whatever they are). It would be nice if we could move the start date to any time in October, see how the lines look, and take it from there. I don't know if zooming in the timeframe means zooming in the MML as well.
I'd appreciate seeing any .tpl files someone manages to create as prework to indicator. I think we need to draw it before we write code to draw it. Honestly a great indicator could be made where the MMI aren't precomputed, but DateTime input by hand. That way we can easily change the start/stop times hour by hour or by day.
http://murreymath.com/charts/ChartsJpgs/dx3mmar2490dy.jpg This uses parallel lines to the 45 degree angle.
http://murreymath.com/charts/ChartsJpgs/ecm3apr03.jpg
Compare the MML that MMOctave v5 makes! The 1.050 to 1.099 MML is drawn by v5! If anyone does work on this, please use MMOctave v5 for the lines since we have "from the horses mouth" confirmation that the changes I made were correct.
At the top of both images there are 5 icons, labeled "up down up down triangle" The lines at angles use the angles I provided here. The 45 degree angle parallel lines basically connect each MML to its corresponding MMI.
The circles are drawn where the 45 degree parallel lines "up" intersect the 45 degree parallel lines "down".
The Triangle 4 lines:
0/8 MML, 0/8 MMI to 4/8MML, 8/8 MMI
0/8 MML, 8/8 MMI to 4/8MML, 8/8 MMI
0/8 MML, 0/8 MMI to 6/8MML, 8/8 MMI then 4/8MML, 8/8 MMI in the next timeframe
0/8 MML, 8/8 MMI to 6/8MML, 8/8 MMI then 4/8MML, 8/8 MMI in the next timeframe.
There, from those pictures you have all of the information to make an indicator. The easiest way to program it might be taking 2 times as input. Time2-Time1 = full MMI. Divide by 2 to get the 4/8 point, by 2 again to get 2/8 and 6/8, by 2 again to get the odd interval numbers. The odd numbers should be dotted or not displayed, the even MMI numbers having solid lines. (If you buy the book you will definitely see the logic in doing this. http://murreymath.com/charts/ChartsJpgs/sfm3mar2490dy.jpg has a hint - it happened 3 times.)
The math is very simple, I think the biggest challenge is displaying the lines in MetaTrader.
daraknor
your observations are so intense, are you actually making money?
I'm currently down 60 pips on my long CHF position, without a stop
CMC
It will turn around (according to MM and I'll pocket another 100 pips)
promise!!!!
Cmc: I've been a programmer for a decade and I was just screwed on thousdands of dollars of work from 3 clients. I haven't really been paid for 3 months, so the money I had earmarked for forex hasn't come in. I have paper traded at a profit using different strategies for months, just waiting to get paid so I can dip my hand in too. Right now I'm making an EA on commission so I might get in soon. I have dabbled with forex several times before, but my money has always been inversely proportional to my time - so if I had money to play I didn't have the time, if I had the time to play I didn't have the money.
I don't know if you are using MMOctave v5 or not, but I currently see USDCHF at a baby 6/8 line, sitting under a minor 1/8 line. Since we didn't get a sharp bounce from minor 1/8, it will probably hit the baby 4/8 or the minor 0/8 before it bounces back up. I find it odd you always trade for 100 pips, is that purely psychological or did you use Murrey Math to reach that target? If I was trading on 3 octave movements I would trade for 47 pips - spread on USDCHF. The +/- 1/2 rule would be from 1.2000 to 1.2047 for half of the bet, and 1.2062 or a trailing stop for the other half. (Enter at the 0/8 after heading under 0/8 but staying there less than 4 days.)
Here is what Murrey says on page 57, "Never stay in your position, if your stock falls 50 cents below your stop. It is impossible to always make much profit, but it is very simple to place a stop , as soon as you buy your stock and protect yourself against large losses. A stop is just as important as the entry point." To calculate scale, that was 50 cents on an $85 stock. A minor 1/8 is $1.56
If I were you, and I wanted to avoid loosing everything, I would put a stop at 1.1800 because that is -2/8 on the minor MML. Why sit on a big looser when you can be trading winners? That said, I would suspect that the currency will come back after the market shakes off the news event, but it seems happy in the the normal trading range of 4/8 to 8/8 of the baby MML. It will likely take a rebound off of baby 4/8 or minor 0/8 to bounce it up. Another possibility is that it hits a center of conflict and rebounds or shoots up, but it would take several hours to calculate it. At least you are earning swap in the meantime right?