Forex trading - buying and selling of round numbers

Forex trading - buying and selling of round numbers - There are a lot of opportunities to trade the Forex market. Some people are attracted to participate because its primary long-term trends. Others, such as high leverage available. Others might be another 24 hours of this nature, like marketing, while still another, another group could appreciate the unprecedented volume. It is little surprise that is to go for a large part of traders, active intraday trading one way.

Very short term traders tend to focus on price action trading methods, but as an indicator and oscillator-based systems. An example of trying to exploit the previous highs or lows. Storage area are other areas of interest. Thus, a simple chart patterns such as triangles, pennants and wedges. Even something a little more complex, head and shoulders with their variations, known as "crowns" Price Action Set, UPS. You do not need any other input, but the price data itself

Past high and low points are viewed as support and resistance. In intraday trading, it is impossible to jump from each of these levels one and expect to find in order to be profitable. The key to successful intraday trading requires that we be more selective and enter only at those levels where a reaction is more likely. For example, in areas where there is a confluence of these zones. A high or low, visible on both 15 M and 5 M charts is certainly important that it be seen only on 5M graph.

Then there is psychologically important levels. These areas may not have a clear view as the most recent support or resistance zones, but have significance for other reasons. The best known of these, the round numbers, also known as "the numbers" are. Example for round number is 1.5600 in EUR-USD or 107.00 USD-JPY. Fractional numbers such as 1.5640 or 107.70 are too often and does not really matter. On the other hand, "full" or "triple zero" as 1.5000 EUR-USD, are extremely important but does not happen often enough and for the purposes of this article than any other round number are treated.

Why are the psychologically important level areas? To set market participants as a whole tends to conditional orders near or at the same level. While placed stop-loss orders are normally only about the numbers rounds, the dealer take-profit order on their lap-number group. As a result, take-profit orders have a very high tendency of the full "figure" level are taken. Since the FX market is a nonstop continuous market, speculators also use stop and limit orders more frequently than in other markets. Unlike other financial markets, the average trader does not have access to the backlog and order fulfillment for themselves has to judge. Round provide a relative predictability of the order. Forex trading - buying and selling of round numbers

It is believed that large banks with access to conditional order flow, such as stops and limits, actively seek to exploit these areas. Strategy fading round numbers so tried, dealer put on the same side as a market maker or to the "smart money". Here rules for a simple, are contra-trend trading strategy.

Identify set up a buy a currency pair that is already cores 30-50 and moved closer round number. After the image is hurt, you enter a position, a few points below the level, but not more than 10-12 pips. Set stop / loss 15-25 pips from your entry. Are you looking to benefit at least twice, you risked. For a trade sale, on the back of the rules.

Strategy is very simple, but for a while, as another should be practiced. Also, some currency pairs with large spread, not necessarily the best candidates for use. GBP-JPY falls. On the other hand, most of the large crosses himself handsomely for this set up. They have small spreads and common touch round numbers often enough to make the whole day, a viable trading method.