If you don't have to much time or you want to keep your charts simple, or maybe you are just lazy. This strategy is right for you !
What is it ? Is it magic ? No... Round numbers.
Imagine you are going to buy a car. You go to website and look for used cars... What is your price limit ? It is always 5000USD, 10 000EUR or 2500GBP. You dont set your price limit to 4786EUR or 13 334USD. It is the same in trading and investing.
Round numbers are psychological support/resistance levels. For example, if ETH/USD is going upwards and reaches 2000USD, you will notice strong bearish reactions, because a lot of traders believe that the currency pair cannot go any higher than that, so they sell in fear of losing their profits.
Traders can use the round numbers as a strategy. Psychological levels are 00, 25, 50 and 75. In order to use the numbers, you need to go short when market goes up and one of these levels is reached. Also at these price levels you can expect institutional buy/sell orders, SL's and TP's.
You can also use it in forex, stocks or indeces... Watch how 1.40(GBP/USD) works. Or 1.20 (EUR/USD)
Try to play with your charts and be creative... Do not hesitate to add moving averages, fibo levels or candlestick patterns :)
And as I always say: there is beauty in simplicity ;)
What is it ? Is it magic ? No... Round numbers.
Imagine you are going to buy a car. You go to website and look for used cars... What is your price limit ? It is always 5000USD, 10 000EUR or 2500GBP. You dont set your price limit to 4786EUR or 13 334USD. It is the same in trading and investing.
Round numbers are psychological support/resistance levels. For example, if ETH/USD is going upwards and reaches 2000USD, you will notice strong bearish reactions, because a lot of traders believe that the currency pair cannot go any higher than that, so they sell in fear of losing their profits.
Traders can use the round numbers as a strategy. Psychological levels are 00, 25, 50 and 75. In order to use the numbers, you need to go short when market goes up and one of these levels is reached. Also at these price levels you can expect institutional buy/sell orders, SL's and TP's.
You can also use it in forex, stocks or indeces... Watch how 1.40(GBP/USD) works. Or 1.20 (EUR/USD)
Try to play with your charts and be creative... Do not hesitate to add moving averages, fibo levels or candlestick patterns :)
And as I always say: there is beauty in simplicity ;)
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