How To Use Round Numbers In Forex Trading|Round numbers strategy-Scalping Round Numbers Strategies

Forex Trading Scalping
How To Use Round Numbers In Forex Trading|Round numbers strategy-Scalping Round Numbers Strategies
The currency pairs often have a tendency to rebound off significant round numbers. Forex traders aiming to take advantage of the phenomenon have to construct a system based on the order flow connected with these levels. To begin with, it ought to be mentioned that the target market will not change direction whenever it visits a round number. If only life was this simple! Professionals deal with probabilities, and whatever that can easily be utilized to develop an edge is deserving of notice.
The USD/CAD currency pair, some time ago, traded into the parity level at 1.0000. This is a historical level that has proved to be an excellent support and resistance on many occasions. On first hitting the parity level, the price subsequently pierced it by a number of pips and then retraced hundreds of pips lower. Shortly after, a similar thing occurred again. How come this happens you might inquire? Well, it boils down to the order flow that builds at these key areas. A cluster of orders based upon key levels like the 1.0000 parity one we mentioned signifies that volatility can frequently follow a shift into the level.
Retail traders often position trade entries over and underneath the Forex round numbers. 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. 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:
Candlestick analysis.
Momentum breakouts.
Reversal patterns including double tops and ABC corrections.
Moving average reversals.
Horizontal support and resistance breakouts and reversals.
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.
Welcome Friends to ‘s Biggest Technical Analysis Youtube Channel
Our Dream is to make you an Expert in Trading any Market, be it Indian Stocks, Commodity or Forex Trading. We plan to achieve that by:
* By providing you A-Z of Technical Analysis and Fundamental Analysis training,
* By Giving you tools, Strategies and Indicators to know the markets better,
* By Providing you a Demo trading platform free of cost to test the waters
* By Providing you a Mobile App, to Monitor, Study, Analyze and trade on the Go.
* By Providing you Free Honest Product reviews related to Trading.
Our Channel has Videos basic videos from what is Technical Analysis to advanced concepts like Trading Divergences, we have training videos in Trading Psychology, Money Management along with hardcore Technical Analysis videos.
Wishing you all the very best.
forex trading strategies
best forex trading platform
forex trading for beginners
forex trading tutorial
what is forex trading and how does it work
forex trading reviews
forex market live
forex trading wiki
orex trading in india
best forex trading platform
forex trading for beginners
forex trading tutorial
forex trading reviews
functions of foreign exchange market
what is forex trading and how does it work

Products You May Like

Articles You May Like

Japanese Yen Drops, GBP Briefly Above 1.27, NOK Outperforms – US Market Open
Asian Stocks Mixed As US, Iran Trade Accusations Over Tanker Attacks
WTI crude oil futures settle at $52.21
Report: Uber, PayPal, Visa to Back Facebook’s GlobalCoin Cryptocurrency
Mastering MACD indicator for Forex Beginners (Basics)

Leave a Reply

Your email address will not be published. Required fields are marked *