Understanding MM Levels

There seems to be a lot of confusion on how to trade these MM
levels….lemme just introduce to you what these MM levels are at a
high level…and believe me, this is all that u need to know about the
MM levels if you are going to trade using PA and MM levels…

Murray Maths tries to divide everything into octaves (i.e. by
8)…whether it is price or time or whether it is forex or stocks or
whatever…everything is divided by 8.. So what the MM indicator does
is basically divide 2 important price points (at swing lows and highs)
into octaves. This leads to 8 levels which are called the MM levels.
These are the standard MM levels. Apart from this , these can be
extended further in both sides to form the overshoot levels….In
fact, you can keep extending these levels on either side for as long
as you want.

Just as in fibs, the amazing point here is that the price seems to
respect these MM levels as points of SR. How or why, i really dont
know but we know that it does.

There are 2 points of confusion here : one is the fact that the MM
levels change with the TF that the chart is in and two, the MM levels
seem to repaint. Heres why :

As the MM levels are calculated based on swings in the current
timeframe, the swing in each timeframe would be different. The swing
in a daily chart would be much bigger than the swing in a 5M chart.
Thats why the MM levels differ according to the TF of the chart. The
MM levels, irrespective of the TF that they r calculated in, do act as
SR points but the MM levels in lower TFs are weaker than the ones in
higher TFs. In other words, you can be sure that the price would
respect the 4/8 MM level in a daily chart much more than it would in
the 5M chart.

Next question is, does the indicator repaint? Yes and No. Since the MM
levels are calculated based on price swings, as long as the price
continues to swing within the 2 points with which the levels were
calculated, the MM levels wont change. But if on any day, there has
been very less or very high volatility which has caused price to swing
much less or much more than the normal swing, then the swing points
would have changed and hence the MM levels would need to be
recalculated. Thats why i make it a point to close and open my charts
atleast once a day especially if on that day, the price had swung very
less or a lot more.

By Karthik Subramanian Follow Karthik on Twitter.

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  • James S

    Thanks, that agrees with my friend too. I asked him which swing and he said “any of them.”

  • thanks Pat

  • James,
    its just like the fibs…u could take whichever swing u want and the lines may be respected….but how important these lines are and how strong they are would depend on which swing you choose and how big the swing is and how long the swing has taken to develop…

  • James S

    Here is my question. I have a friend who draws Murray lines on his chart for day trading. He believes he should use the high and a low of a simple swing move where the chart appears to be forming a cycle. He’ll scroll back to some point in the month to find a move, calculates the 1/8 lines and extends them above and below. Prices seem to respect those lines forward and backward in time for days and days, even weeks. If that sounds like the correct thing to do, my question is how do you know which swing to use?

  • Patricio A

    Great!!! It´s so clear now. Thank you Karthik!!!