Round number forex trading

Trading round numbers in Forex allows you to increase the efficacy of setting a take-profit, a stop-loss and identifying the right levels to open a.
Table of contents

• Round Levels in Forex. Why You Should Consider Them
• Round Numbers in Forex
• Psychological Levels & Round Numbers in Forex Trading
• The Natural Number Method Trade Examples

Take profit orders of buy trades are usually clustered below a round number, whereas taking profit orders of short trades are clustered above a round number. Your email address will not be published. Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website.

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Stop-Loss Orders — past round numbers. Take profit orders — ahead of round numbers.

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Accept Reject Read More. An order above the level may trigger, and the trader seeks to profit from the subsequent momentum.

If the position does not move in the preferred path, the stop-loss is frequently put on the other side of the number in question. The liquidation of the order is a reverse one so the stop on a buy position is actually a sell stop. What often takes place once this triggers? The sell order forces the price lower when interest in the asset decreases. No retail trader moves the Forex rates in isolation, however, the combination and aggregate influence of numerous orders leads to the price action activities we often see on the charts.

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Banks and hedge funds may also be placing orders around these key areas. Perhaps, even large companies who need to deal in the FX market in order to pay wages. There are many variables, and we will never know half of them, but this does not change the fact that these numbers often provide major turning points. The above should not be taken as a reason to blindly trade around these areas as the Forex market is extremely risky.

It is much better to trade with other confluent factors. The following can all be used in conjunction with round numbers:.

The Natural Number Method Trade Examples

These are of course just examples and there are many other technical analysis techniques that can be used. Some traders will even try to use Forex trading robots known as expert advisors to trade these round number areas via different strategies. This all shows that the round numbers are just another part of the puzzle and should be used with discretion. Half of the battle when trading is having the patience to wait for all of the confluence elements to line up and be fully aligned before pulling the trigger and placing a trade on your platform.

The temptation is to enter when any signal comes as the fear and greed element is always there. Greed, as you think a good opportunity to make money, is there, and so is fear that you may miss it. It generally pays to be patient though and pick the best signals. Even these can lose, so good money management is essential. Demo trading to prove yourself as a profitable trader is always a god idea as this gives an opportunity to see if you can trade without losing money.

Maybe you can try incorporating round numbers into your strategy.