Author: Vladislav Goshkov (VG)
If you’ve been trading for a while, you might have heard about Murrey Math Lines. Developed by the insightful Thomas Henning Murrey, these lines take inspiration from the legendary William Gann's theories and make them more accessible for traders like us. Murrey's innovative math lines are based on the Gann's "Square of Nine" principles and have become a staple for predicting market movements.
So, what exactly are Murrey Lines all about? Let’s break it down: the trading range is divided into 8 equal sections, with two additional areas created above and below for a complete picture. Each section is marked by specific lines that guide our trading decisions.
Understanding Murrey Lines
Here’s a quick rundown of what these lines mean, especially when you’re looking at a daily chart:
- 8/8 and 0/8 lines: These are the ultimate resistance points. They pack a punch and often create significant support and resistance levels.
- 7/8 line: This is a weak point where price action can stall or reverse. If the price has surged too quickly and hits this line, expect a swift pullback. If it doesn’t stall here, it may continue climbing to 8/8.
- 1/8 line: Similar to the 7/8, this line can also cause reversals. If prices reach this point after a rapid drop, prepare for a bounce upwards. If it breaks below, it might head down to 0/8.
- 6/8 and 2/8 lines: These lines are strong pivot points that can reverse price movements, second only to the 4/8 line in effectiveness.
- 5/8 line: Known as the top of the trading range, prices often hover between the 5/8 and 3/8 lines for about 40% of the time. If the price lingers near the 5/8 line for 10-12 days, many traders see this as a
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