Round numbers as a strong resistance and support in Forex Market
October 16, 2009 by Orhan H.
Filed under Trading Systems
No matter what trading style or fx strategy you use you always have to pay attention rounded numbers. These numbers can be great supporters and resistors on all currency pairs.
If the price of EUR/USD is on the edge of 1.4950, and you’ve opened buy position on it, with the strategy that has a goal of taking profit of 60 pips – in this case you’ll be needing to adjust the strategy to the market conditions and set your TP few pips below the edge of 1.5000 (let’s say 1.4993), that is the way to increase your chances of taking profits.
Why are rounded numbers important? Look at the numbers and you’ll simply see that they ARE important – all investors that invest on longer time period set the TP near rounded numbers. So no matter if you’re a scalper or day trader, you never set TP above these numbers if you’re in buy, or below if you’re in sell position. These numbers should be considered as possible supports and resistances all the time.
