Dream EL Murrey Levels Support and Resistance
Murray's levels are the most popular support and resistance levels among professional traders. With them, you can easily determine where the price is consolidating and where there is a breakdown of this consolidation. 13 levels have a special role in the price passage. Before you start trading with the help of Murray's levels, be sure to read what these works are based on.
- NumBars - number of bars for calculation of the levels (default value - 64, professionals use 200)
- BackBars - stepping back (recommended to leave it at 0)
Description of levels from the presentation provided by Henning Murray:
- Extreme Murray levels 0/8 and 8/8 are called final resistances. They are the strongest support and resistance lines.
- The next level 7/8 is a weak reversal point. It is important in case the price moves in one direction quickly. If the price stops near the level, it is going to reverse and move backwards quickly. If the price goes on moving, it will reach the level 8/8.
- The level 1/8 is symmetrical to 7/8 being a weak reversal point. If the price moved down quickly and stopped near the level, it is about to reverse and rise sharply. If the price goes on moving, it will fall down to the level 8/8.
- The levels 6/8 and 2/8 are similar and show the price rotation and reversal. These levels may reverse the price movement direction, though they are weaker than the level 4/8. These levels show whether the Murray levels are plotted correctly.
- The level 5/8 is the upper trading range mark. The price movement between 3/8 and 5/8 is the most suitable for a market entry. If the price stays near the level for several days (bars), this is a good time to sell, provided that the price is above the level 5/8. All this means that it will continue its further upward movement. Similarly, if the price stayed below the level, it will continue its movement up to the next resistance level.
- The level 3/8 is the lowest trading range mark. The bullish price below the level will have difficulties in breaking it. If the breakthrough occurred and the price stays above the level for 10-12 days, it will move between 3/8 and 5/8 for 43.75% of the time.
- The level 4/8 is the main support/resistance level. It is perfect for buying/selling. If the price is above the level, it provides an excellent support. Otherwise, it is a strong resistance level.