I present to you a tool that may not be superfluous in your strategy and will expand the possibilities of market analysis. Initially, the Murray levels were developed on the basis of Gann’s theory. In turn, Gunn was rightly considered a genius of the markets. He was surprisingly accurate in predicting the behavior of both the markets and the general behavior of the society of his time.
You should understand the importance of these levels for practical work. The price in its movement through the market does not move strictly according to the levels, or on the contrary, it is repelled from these levels. On these lines, the price is described by the probabilistic properties of predicting events in the future. That is, when the price approaches any of these levels, an event with a certain degree of probability can occur or not. It is this probability that the horizontal levels suggest, since each of them has its own unique properties, and the price will be repelled or attracted when approaching it.
Any currency pairs. Timeframes – from H4 and above.
- 8/8 and 0/8 (resistance and support levels) – maximum signal strength level. As a rule, the price reverses after it reaches the level of 8/8. The moment when there is contact with this line is a great opportunity to close long positions. Level 0/8 – the moment to close short positions.
- 7/8 and 1/8 (weaker levels) – the moment for stopping and possible U-turn. When crossing the 7/8 level, a sharp turn down is possible. When crossing the 1/8 level, a sharp turn up is similarly possible. But this will only happen if prices have gone too far.
- 6/8 and 2/8 (rotation and U-turn levels) – at these two levels, there is a high probability of a reversal of the price movement, but it is inferior to 4/8.
- 5/8 (peak of the trading range) – if there is a situation when the price moves in a given trading range of 10-12 days, this indicates that it is necessary to sell. If the price remains above the 5/8 level, then in most cases it remains higher. If it falls, then the probability of a further fall is also high.
- 4/8 (resistance and support levels) – the best levels for buying or selling. Crossing the 4/8 level is a good time to enter the trend. If prices tend to move above this level, then 4/8 becomes a strong support. If the price falls below this level, 4/8 becomes a remarkable resistance level.
- 3/8 (the level referred to as the bottom of the trading range) – if prices move up, it means that it will be difficult for the price to break through this level.
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- P is the width of the distance between the levels.
- StepBack – the step of changing time periods.