How to Trade Using Murray Lines and Price Action

By Karthik Subramanian

Many of the top traders in the world trade using what is known as price action. By price action, we simply refer to how the price reacts and behaves at any specific point of time. The traders will also tell you to watch how price behaves at points of support and resistance. There are various ways of finding the points of support and resistance like fibs, murray lines, historical prices etc.

The above few sentences contain a whole lot of terms which new traders might find difficult to understand. Over the next few days, I will be writing a series of articles to explain each of the terms above and I will also be posting current charts of different pairs to highlight possible trades.

Let me first start with murray lines. Murray Maths is a very complicated technique involving complex calculations. It involves dividing price and time into octaves and coming up with supports and resistances based on that. Thankfully for us, we need not understand what goes on behind the scenes and we need not know how it is calculated. We have a very good MM level indicator (freely available on the net) which draws the MM levels for us.

It draws the levels by choosing the highs and lows of the current chart and diving that into octaves. Since the indicator chooses the current chart, the MM levels vary according to the time frame of the chart. Of course, the MM levels in chart of higher TFs are much stronger SR than those on smaller TFs.

Attached is a current 1H chart of GBPUSD and you can easily see how the murray lines show you the regions of support & resistance (SR) so easily and explicitly.

Murray Lines

Murray Lines

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  • Nice to be visiting your forex blog again, it has been months for me. Well this forex article that i’ve been waited for so long. I need this forex article to complete my assignment in the college, and it has same topic with your article. Thanks, great share.

  • Elie Haykal

    Very informative !

  • Dudley

    For anyone who is still sceptical about using MM lines. Here is a chart of the EURCHF 30 min. On Friday, the NFP news pushed price up to just below a supply level I had marked on the chart and turned exactly at a MM Line. Price has just now stalled exactly at a MM line. As Mr Karthik said, if you understand price action then MM lines are very good to trade from. See the second ellipse (the 6/8 red MM line @ 1.5747), on the chart, price was moving down, then retraced back to this MM line and reversed back down for nearly 250 pips. Using MM lines with price action or supply and demand areas is the way to go.
    http://twitpic.com/2lz6zh

  • Dudley

    You are very sceptical. I am unable to attach a chart, but If I could, I would show you todays Cable chart with 2 examples of 30 pips scalps at a MM line in the direction of the day’s trend.

  • Hi Raj,
    thanks for the comment. there is no short cut method for becoming a trader…u need to spend long hours and several hours at it to make it as ur profession, just like how many years you spend in college trying to become an expert in your chosen field….just get some basic forex books to start off and then you need toslowly build on it….it is a long hard road, just like any other business/profession…

  • raj

    HI I M NEW TO TRADING AND ONLY KNOW THE JUST BASICS COULD YOU HELP ME TO LEARN HOW DO TRADE PROFFESIONALLY OR WHAT STEPS I HAVE TO TAKE TO BE GOOD TRADER PLSE HELP ME OUT. HOW I START WHETHER I READ BOOKSOR WHAT EFFORT SHOULD I TAKE PLEASE SUGGEST ME,,,,

  • Guest

    If you draw a bunch of lines on your chart after every specific small interval, it will always find support or resistance. Can it identify with a good probability where a pullback is going to occur? Otherwise, it’s a pure crap.

  • hi dudley….nice to know that u use it as well…..thats the advantage of using price action and MM lines…it works in all TFs provided u know what u r dealing with…

  • Dudley

    Hi Karthik, I also use MM lines. They are very good for scalping a bounce in the direction of the intrady direction. I usually wait for price to retrace to a MM line and scalp to the next MM level on the 5min TF.

  • yes indeed…..each TF gives different levels…u need to use it for the TF that u usually trade in…

  • Karthik

    Hey Pat….nice to see u here as well…

  • Spider

    The problem with using the Murrey lines is that there are several versions of the indicator and some traders have found that different versions work with different time frames.
    I have used the Murrey level with a daily chart quite successfully.
    Spider

  • Patricio A

    Hi Karthik good to see you here!!!