T. Henning Murrey – Introducing MurreyMath Trading System

1942. Henning Murrey from Nashville Tennessee was born in 1942. In 1993 Murrey worked on theories of random thinking, importantly by NOT studying the market. From this he wrote his trading book and then in 1995 Murrey? rediscovered? what Gann hinted at in his book, the six clues. Murrey translated the algorithms of a Fractal inside a Cube set to the Base Ten to exact Fibonacci Ratios set to the scale of Music.

Murrey Math assumes that all markets behave in the same way. The market is in a constant state of chaos. The market is trying to find equilibrium, which is the point of extreme chaos. These are the points of extreme market behavior and why we place so much value on sentiment indicators. The Murrey Math trading system is based on observations made by W.D. Gann in the first half of the 20?th century. His techniques have been regarded as complex and difficult to implement, despite the fact that he was said to be a brilliant trader. Murrey Math created a system of geometry that can be used to describe market price movements. The geometry facilitates the use of trading techniques. It added the turning point methodology that was missing in refining the levels. The Murrey Math Trading system works well with our fans and Angles.

Interpretation of MM Line.

Murrey Math is a trading system. This includes stocks, bonds, futures, and options. Murrey Math assumes that all markets behave the same way and that they are traded by a mob. The Murrey Math trading system is based on observations made in the first half of the 20th century. His techniques have been regarded as complex and difficult to implement, despite the fact that he was said to be a brilliant trader. Murrey Math created a system of geometry that can be used to describe market price movements. The geometry facilitates the use of trading techniques.

The geometry used to gauge the price movements of a given market is one of the main components of the Murrey Math trading system. The Murrey Math system can have predictive capabilities if it is implemented correctly. A trader can expect certain pre-defined behaviors in price movement because the Murrey Math rules are tied to the Murrey Math geometry. The odds of being on the correct side of a trade have been greatly improved by recognizing these behaviors. The principle of the Murrey Math trading system is to recognize the trend of a market, trade with the trend, and exit the trade quickly with a profit. No one ever went broke taking a profit.

The Murrey Math geometry is simple and elegant. Murrey describes it as a perfect mathematical trading system. Understanding the foundation of Murrey Math requires an understanding of the concept of a fractal. I recommend the first 100 pages of the book, The Science of Fractal Images, edited by Dietmar Saupe and Heinz-Otto Peitgen. The book was published in 1988. An in depth understanding is not necessary if you just look at the diagrams.

Basic geometric shapes are characterized by one or two parameters. The scale of a circle is determined by its diameter, the scale of a square is determined by its length, and the scale of a triangle is determined by its length. A self shape that is independent of scale or scaling is called a fractal. A process is repeated over and over again.

The next question is, what does a fractal have to do with trading in equity markets? Imagine if someone gave you a collection of price-time charts of many different markets. Different time scales have been used to draw these charts. There are some that are daily and some that are weekly. None of these charts are labeled. Without labels, could you tell the difference between a daily chart of the Dow and a weekly chart of IBM? Not likely. All of the charts seem to have the same appearance. When the price moves a bit, it reverses direction and retraces some of its previous movement. Even though we use different price-time scales for our charts, they all look the same. This requires more 8th grade math and is left as an exercise to the interested reader, but the sameness of these various charts can be formally characterized.

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