In their trading on the Forex market, most part of traders apply various tools, which are able to assist them in decision making. For example, Murray levels have been an instrument applied by traders for a long period of time.
Unfortunately, not all traders handle Murray levels properly. Originally, Gann theory (Gann squares) were put on the ground of building the Levels. In the beginning of trading, one puts square on chart. Borders of square will signalize about beginning and end of existing tendency.
Murray levels are used by traders on various time-frames. But the most significant levels are still long time-frames. Repeated character of market underlies building of ML, which imply drawing of twelve horizontal lines with each of them serving as an important level. (Pic. 1) Levels of greatest importance are the bottom and upper levels – 0 and 8.
Major parameter in building ML is the time interval. This parameter determines Low and High, which values further serve for building the Levels. Time interval defines width of the interval and its further change. Using big values of this figure can lead to missing profit, whereas small values give a lot of false signals that can lead to losses.
As per Murray theory, the best possible time interval is 64 used for building levels on day charts. However, practical application of ML by traders allowed finding one more interesting value as of 200. Simultaneous application of ML with 200 and 64 parameters provide a more profitable trading both for short- and long-term periods of time.
Let's consider the most important Murray levels
The most significant Murray levels are 8/8 and 0/8. Near these levels the most verifiable movements of price take place the most frequently, which allows to enter market at a lowest Stop Loss.
7/8 and 1/8 levels are the weakest. Upon accomplishing those levels, a trader has to closely watch behavior of price to make a decision and enter trade on time.
One of the most important levels is 4/8. More often, this level acts as resistance and support level on market. Upon completing a strong trend movement, price gets back to this level. When trend rolls back to this level, entrance to market is the best possible option.
The rest Murray levels are less important and entering market on these levels can lead to losses. Thus, ML are a powerful trading instrument assisting trader in successful operation.