OPEN-SOURCE SCRIPT
HM2 - Murrey Math Levels

# Murrey Math Indicator - Comprehensive Description
## **What is Murrey Math?**
Murrey Math is a trading system developed by T.H. Murrey that divides price action into 8 equal segments (octaves) based on Gann and geometry principles. It automatically identifies key support and resistance levels where price is likely to react, making it a powerful tool for determining entry/exit points and price targets.
## **How It Works**
The indicator:
1. **Analyzes price history** over a lookback period (default 64-200 bars)
2. **Finds the highest high and lowest low** in that period
3. **Calculates a "fractal"** - a geometric scaling factor based on price magnitude
4. **Creates 8 equal divisions** between key levels, plus 4 overshoot levels (total 13 levels)
5. **Labels each level** from -2/8 to +2/8 with their trading significance
## **The 13 Murrey Math Levels**
### **Core Levels (0/8 to 8/8):**
- **[0/8] - Ultimate Support** (Blue)
- Extreme oversold condition
- Strong buying opportunity
- Price rarely breaks below this
- **[1/8] - Weak, Stall & Reverse** (Orange)
- Weak support level
- Price often stalls and reverses here
- **[2/8] - Pivot/Reverse Level** (Red)
- Major support that can become resistance
- Important reversal zone
- **[3/8] - Bottom of Trading Range - BUY Zone** (Green)
- Bottom boundary of normal trading
- **Premium BUY zone** - 40% of trading happens between 3/8 and 5/8
- **[4/8] - Major Support/Resistance** (Blue)
- **THE MOST IMPORTANT LEVEL**
- The midpoint - best entry/exit level
- Strong pivot point that price respects
- **[5/8] - Top of Trading Range - SELL Zone** (Green)
- Top boundary of normal trading
- **Premium SELL zone**
- **[6/8] - Pivot/Reverse Level** (Red)
- Major resistance that can become support
- Important reversal zone
- **[7/8] - Weak, Stall & Reverse** (Orange)
- Weak resistance level
- Price often stalls and reverses here
- **[8/8] - Ultimate Resistance** (Blue)
- Extreme overbought condition
- Strong selling opportunity
- Price rarely breaks above this
### **Overshoot Levels:**
- **[-2/8] & [-1/8]** (Gray) - Extreme downside overshoot zones
- **[+1/8] & [+2/8]** (Gray) - Extreme upside overshoot zones
- These indicate extreme moves beyond normal trading ranges
## **Trading Zones (from your diagram)**
1. **Consolidation Trading Area** (0/8 to 3/8)
- Price is in a bearish zone
- Look for BUY opportunities near support levels
2. **Normal Trading Area** (3/8 to 5/8)
- **40% of trading occurs here**
- Price oscillates between these boundaries
- Range-bound trading strategies work best
3. **Premium Trading Area** (5/8 to 8/8)
- Price is in a bullish zone
- Look for SELL opportunities near resistance levels
## **Trading Strategies**
### **Buy Signals:**
- Price bounces off 0/8 (ultimate support)
- Price pulls back to 3/8 in an uptrend
- Price breaks above 4/8 after consolidation
### **Sell Signals:**
- Price rejects at 8/8 (ultimate resistance)
- Price rallies to 5/8 in a downtrend
- Price breaks below 4/8 after consolidation
### **Range Trading:**
- Buy near 3/8, sell near 5/8 when price is ranging
- Use 4/8 as the pivot to determine trend direction
## **Key Advantages**
✅ **Objective levels** - No subjective placement
✅ **Self-adjusting** - Automatically recalculates based on recent price action
✅ **Clear trading zones** - Easy to identify support/resistance
✅ **Works on all timeframes** - From 1-minute to monthly charts
✅ **Combines with other indicators** - Works well with RSI, MACD, etc.
## **Important Notes**
- The indicator is **dynamic** - levels update as new highs/lows form
- **4/8 is the most critical level** - price above = bullish, below = bearish
- When price reaches overshoot levels (±1/8, ±2/8), expect strong reversals
- Works best in trending markets; can give false signals in choppy conditions
This geometric approach to support/resistance has been used by traders for decades and remains popular due to its objective, mathematical nature!
## **What is Murrey Math?**
Murrey Math is a trading system developed by T.H. Murrey that divides price action into 8 equal segments (octaves) based on Gann and geometry principles. It automatically identifies key support and resistance levels where price is likely to react, making it a powerful tool for determining entry/exit points and price targets.
## **How It Works**
The indicator:
1. **Analyzes price history** over a lookback period (default 64-200 bars)
2. **Finds the highest high and lowest low** in that period
3. **Calculates a "fractal"** - a geometric scaling factor based on price magnitude
4. **Creates 8 equal divisions** between key levels, plus 4 overshoot levels (total 13 levels)
5. **Labels each level** from -2/8 to +2/8 with their trading significance
## **The 13 Murrey Math Levels**
### **Core Levels (0/8 to 8/8):**
- **[0/8] - Ultimate Support** (Blue)
- Extreme oversold condition
- Strong buying opportunity
- Price rarely breaks below this
- **[1/8] - Weak, Stall & Reverse** (Orange)
- Weak support level
- Price often stalls and reverses here
- **[2/8] - Pivot/Reverse Level** (Red)
- Major support that can become resistance
- Important reversal zone
- **[3/8] - Bottom of Trading Range - BUY Zone** (Green)
- Bottom boundary of normal trading
- **Premium BUY zone** - 40% of trading happens between 3/8 and 5/8
- **[4/8] - Major Support/Resistance** (Blue)
- **THE MOST IMPORTANT LEVEL**
- The midpoint - best entry/exit level
- Strong pivot point that price respects
- **[5/8] - Top of Trading Range - SELL Zone** (Green)
- Top boundary of normal trading
- **Premium SELL zone**
- **[6/8] - Pivot/Reverse Level** (Red)
- Major resistance that can become support
- Important reversal zone
- **[7/8] - Weak, Stall & Reverse** (Orange)
- Weak resistance level
- Price often stalls and reverses here
- **[8/8] - Ultimate Resistance** (Blue)
- Extreme overbought condition
- Strong selling opportunity
- Price rarely breaks above this
### **Overshoot Levels:**
- **[-2/8] & [-1/8]** (Gray) - Extreme downside overshoot zones
- **[+1/8] & [+2/8]** (Gray) - Extreme upside overshoot zones
- These indicate extreme moves beyond normal trading ranges
## **Trading Zones (from your diagram)**
1. **Consolidation Trading Area** (0/8 to 3/8)
- Price is in a bearish zone
- Look for BUY opportunities near support levels
2. **Normal Trading Area** (3/8 to 5/8)
- **40% of trading occurs here**
- Price oscillates between these boundaries
- Range-bound trading strategies work best
3. **Premium Trading Area** (5/8 to 8/8)
- Price is in a bullish zone
- Look for SELL opportunities near resistance levels
## **Trading Strategies**
### **Buy Signals:**
- Price bounces off 0/8 (ultimate support)
- Price pulls back to 3/8 in an uptrend
- Price breaks above 4/8 after consolidation
### **Sell Signals:**
- Price rejects at 8/8 (ultimate resistance)
- Price rallies to 5/8 in a downtrend
- Price breaks below 4/8 after consolidation
### **Range Trading:**
- Buy near 3/8, sell near 5/8 when price is ranging
- Use 4/8 as the pivot to determine trend direction
## **Key Advantages**
✅ **Objective levels** - No subjective placement
✅ **Self-adjusting** - Automatically recalculates based on recent price action
✅ **Clear trading zones** - Easy to identify support/resistance
✅ **Works on all timeframes** - From 1-minute to monthly charts
✅ **Combines with other indicators** - Works well with RSI, MACD, etc.
## **Important Notes**
- The indicator is **dynamic** - levels update as new highs/lows form
- **4/8 is the most critical level** - price above = bullish, below = bearish
- When price reaches overshoot levels (±1/8, ±2/8), expect strong reversals
- Works best in trending markets; can give false signals in choppy conditions
This geometric approach to support/resistance has been used by traders for decades and remains popular due to its objective, mathematical nature!
Open-source Skript
Ganz im Sinne von TradingView hat dieser Autor sein/ihr Script als Open-Source veröffentlicht. Auf diese Weise können nun auch andere Trader das Script rezensieren und die Funktionalität überprüfen. Vielen Dank an den Autor! Sie können das Script kostenlos verwenden, aber eine Wiederveröffentlichung des Codes unterliegt unseren Hausregeln.
Haftungsausschluss
Die Informationen und Veröffentlichungen sind nicht als Finanz-, Anlage-, Handels- oder andere Arten von Ratschlägen oder Empfehlungen gedacht, die von TradingView bereitgestellt oder gebilligt werden, und stellen diese nicht dar. Lesen Sie mehr in den Nutzungsbedingungen.
Open-source Skript
Ganz im Sinne von TradingView hat dieser Autor sein/ihr Script als Open-Source veröffentlicht. Auf diese Weise können nun auch andere Trader das Script rezensieren und die Funktionalität überprüfen. Vielen Dank an den Autor! Sie können das Script kostenlos verwenden, aber eine Wiederveröffentlichung des Codes unterliegt unseren Hausregeln.
Haftungsausschluss
Die Informationen und Veröffentlichungen sind nicht als Finanz-, Anlage-, Handels- oder andere Arten von Ratschlägen oder Empfehlungen gedacht, die von TradingView bereitgestellt oder gebilligt werden, und stellen diese nicht dar. Lesen Sie mehr in den Nutzungsbedingungen.