Introduction to Murrey Math for Traders and Investors — Transcript

Full transcript

1. 0:00hello i wanted to shoot this quick video
2. 0:03a basic introductory lesson to murray
3. 0:06math and to gan channels organ fans and
4. 0:09how you can use more geometry to
5. 0:11make yourself a better long-term
6. 0:14investor and potentially a better trader
7. 0:16so
8. 0:17murray math is going to be divvied up
9. 0:19into eight different fractals or eighths
10. 0:22so murray math effectively states that
11. 0:24the market is divvied up into eighths
12. 0:26i'll remove this which is what's called
13. 0:28a gan channel all these different kind
14. 0:30of the peacock fan here so we'll remove
15. 0:32that so we can better visualize this
16. 0:35and all this says is this will identify
17. 0:37for us
18. 0:38in 1 8 moves of the market different
19. 0:41points that we could expect to see
20. 0:43reversals or pivots or
21. 0:45imminent reversals etc so
22. 0:48we'll start with the third eighth
23. 0:49through the fifth eighth and price will
24. 0:51operate about 40 percent of the time in
25. 0:54the third through the fifth
26. 0:56and just to note these are 60 based on
27. 0:5864-day periods of time anywhere from 32
28. 1:02to 64. days is when a
29. 1:04murray math light would be fitted
30. 1:07so
31. 1:08we can see here and it's delineated for
32. 1:09us ultimate resistance and ultimate
33. 1:12support at zero and eight and then on
34. 1:14either side we'll have negative degrees
35. 1:16and positive degrees
36. 1:18now
37. 1:18one thing to note so this negative third
38. 1:21degree
39. 1:22or this negative
40. 1:24eighth negative third eighth i should
41. 1:25say
42. 1:26this imminent bullish reversal the
43. 1:28operative word here being imminent if
44. 1:30price were to ever hit the negative
45. 1:33third
46. 1:34we will get an immediate bullish
47. 1:35reversal and we saw this happen
48. 1:38we saw this play out exactly as it did
49. 1:40here so price wicks down almost touches
50. 1:42this on the nose you can see this isn't
51. 1:44actually even retrofitted to this line
52. 1:46almost touches this on the nose before
53. 1:49immediately gapping back up we get a
54. 1:51reversal back inside of this range of
55. 1:53this bodied candle and then price moves
56. 1:55higher and continues to move higher all
57. 1:58the way to the other end of all the way
58. 1:59to the complete other end of the eighth
59. 2:02right all the way up into the seventh
60. 2:03eighth
61. 2:04now on the opposite side positive third
62. 2:06exact same thing eminent bearish
63. 2:08reversal if price were to ever hit 3
64. 2:10positive 3 8 we would get an immediate
65. 2:13reversal to the downside
66. 2:15now the same would not be true for like
67. 2:17ultimate support or even oversold or
68. 2:19extremely oversold conditions
69. 2:22and actually you can see here we hit
70. 2:24ultimate support
71. 2:26which is supposed to be kind of our last
72. 2:27level to fall
73. 2:29and we didn't get an imminent bullish
74. 2:32reversal again imminent is the key word
75. 2:34here we did get a reversal but it wasn't
76. 2:36imminent i mean we had probably 20 days
77. 2:38worth of candles print here before we
78. 2:40did finally get our reversal into this
79. 2:42barrier excuse me into this bullish
80. 2:44breakout
81. 2:45however
82. 2:46you know just note that just because
83. 2:48price hits ultimate support does not
84. 2:50mean that there will be an immediate
85. 2:52reversal to the upside i just want to
86. 2:54note that because if any of you option
87. 2:56traders are out there who you know want
88. 2:58to take some yolo calls based on murray
89. 3:00math don't come back to me and say that
90. 3:02oh sam said that 0 8 is the spot where i
91. 3:04have to
92. 3:05yolo my my calls on tesla or whatever
93. 3:08you're buying so
94. 3:09anyways
95. 3:10um now one thing so this this other fan
96. 3:13or this channel that i had pulled up
97. 3:15murray math was
98. 3:17designed to
99. 3:18make it easier for the average investor
100. 3:21to
101. 3:22raid and to interpret so this other
102. 3:24channel that i had pulled up is called a
103. 3:26gan fan or a gan channel
104. 3:28and okay let's set it right there so
105. 3:30you'll see this also moves in eighth so
106. 3:321 8 all the way down to 8 8 or 8
107. 3:36or excuse me one
108. 3:38and this is meant to identify what
109. 3:40channel is the market moving in these
110. 3:41are all supposed to be 45 degree angles
111. 3:43of each other
112. 3:45okay
113. 3:46but again this is a little complicated
114. 3:48and frankly hard to evaluate
115. 3:51you know it's just very hard to
116. 3:52visualize so these murray math lines
117. 3:55really make it much cleaner much easier
118. 3:57to interpret now
119. 3:59for an actual day trader
120. 4:01you may not find that much value in
121. 4:03murray math i would suggest that you can
122. 4:05use it to color certain biases you have
123. 4:08so
124. 4:10you know this is a perfect example right
125. 4:12here we're supposed to be reversing off
126. 4:14of the 1 8. we don't have to right it's
127. 4:16not a hard and fast rule at 1 8 like it
128. 4:18is at negative 3. but you know there's a
129. 4:20very good probability that we do reverse
130. 4:22this is a great
131. 4:23spot to stop and reverse unless we have
132. 4:25confluence that says otherwise
133. 4:27now if i'm a trader and i recognize this
134. 4:29and again this is a daily chart of
135. 4:31bitcoin and i'm trading let's say a
136. 4:32five-minute chart of bitcoin
137. 4:34i can look at this and evaluate and say
138. 4:36okay
139. 4:37you know if i can get down into the if i
140. 4:39see a right set up at about the 39 200
141. 4:42mark
142. 4:44on a five minute chart i'm going to go
143. 4:45long expecting you know murray math to
144. 4:47come into play a little bit we get a
145. 4:49strong reversal up or maybe not even a
146. 4:51strong reversal but just a good spot to
147. 4:53stop and reverse
148. 4:55now where this will be very valuable
149. 4:57is to the long-term investor
150. 4:59so
151. 5:00i'm going to do another video and
152. 5:01probably it deserves its whole own
153. 5:03series on how to pick stocks how to
154. 5:06discount cash flow how to create
155. 5:07discounted cash flow models and things
156. 5:09like that
157. 5:10however
158. 5:11this can become valuable upon just a
159. 5:14cursory glance of any chart that you
160. 5:16want
161. 5:17to identify okay when should i try to
162. 5:19scale in or when should i try to enter a
163. 5:21position of this certain stock like
164. 5:23let's say you really really like tesla
165. 5:24stock and you've been wanting to scale
166. 5:26in for a long time you could use murray
167. 5:28math to just identify when the ideal
168. 5:30time to open your position would be
169. 5:33so
170. 5:34obviously i don't want to scale in when
171. 5:35we're at ultimate resistance i don't
172. 5:37want to open a position at a at 7 8 at a
173. 5:39weak stop and reverse point i'm
174. 5:41certainly not wanting to get involved up
175. 5:43here where we're extremely overbought
176. 5:46and you know on the opposite obviously i
177. 5:48want to get involved when we're at
178. 5:49ultimate support or at imminent bullish
179. 5:51reversal
180. 5:52so
181. 5:53just to quickly note anything below zero
182. 5:56eighths is identified the only people
183. 5:58that are selling in here are novice
184. 6:00investors
185. 6:02so these are people who
186. 6:03[Music]
187. 6:04you know basically get shaken out of
188. 6:06their positions by larger investors
189. 6:08frankly or whales as they're called so a
190. 6:10whale will come in cause a big downward
191. 6:13move like this novice investor sees it
192. 6:15it's very scary and they decide okay
193. 6:17right here one negative 1 8 i'm just
194. 6:20done with this thing i'm going to get
195. 6:21out i'm going to cut my losses this
196. 6:22bitcoin thing's a scam whatever they
197. 6:24tell themself right especially down here
198. 6:27at negative 2 8 i'm done it's going to
199. 6:29go lower it's going to go to zero et
200. 6:31cetera
201. 6:32and
202. 6:33murray math is
203. 6:34useful in that sense and that it almost
204. 6:37perfectly identifies human behavior
205. 6:39and that's important to us because a
206. 6:41market is a relationship between buyers
207. 6:43and sellers so it is predicated on human
208. 6:45behavior
209. 6:46however there is an element of math as
210. 6:48we've noticed and really an element of
211. 6:50nature
212. 6:51that will even out and kind of evenly
213. 6:53distribute our math but that's a subject
214. 6:55for a different video
215. 6:56anyways hopefully this is valuable for
216. 6:58you if you guys have any questions on
217. 7:00this
218. 7:00this can be kind of a more complicated
219. 7:02topic maybe it deserves a follow-up
220. 7:04video to it but feel free to post a
221. 7:06comment if you want to see anything else
222. 7:08otherwise thanks for watching and
223. 7:09hopefully you found this valuable