welcome all visitors to our forex portal!Today we talk about crowd psychology of price levels, which attract the bulk of traders, and the fact that we do with all that - at what levels to pay attention and how to put them near a warrant to enter / exit the market.And I will share with you a useful indicator to automatically identify key price limits.
Round levels on forex
Remember when the last time you went to the store and saw the price of a thing, say, 395 rubles, did you think to yourself "395 rubles - aexpensive / cheap ... "?I am sure that there is.For myself, you thought « 400 rubles", not 395.
We always rounded prices.This is a normal human tendency to simplify everything.Inherent it to traders.Therefore, the levels of which are multiples of one hundred (with two zeros at the end), so attractive to the crowd.It is at levels like 1.3300, 1.5000, 1.2600 etc.there is a real fight bulls with bears.And who will win is not known.
But in any case round price levels represent a certain
barrier, so we can say that the price multiples of one hundred (00) serve as support / resistance for the price.
Price levels increased activity
When trading intraday price at certain values of the observed increased activity.About 00 levels, we have talked, then they attract attention, it is clear.
But there are other levels, which do not forget lovers of intraday trading.
20, 50, 80 - the increased activity levels when trading intraday.Examples: 1.2050;1.3280;0.9020.
Why on levels 20, 50, 80 is a large accumulation of forex orders?The point, again, in psychology.50 - it is half the distance traveled from one round to the next level.Agree, when half the work is done, it becomes a lot easier, right?Same thing with the price.
Regarding the levels 20 and 80, the situation is similar.While the prices are not reached, for example, 1.3120, ie,hang out somewhere in the region of 1.3115, it seems that the price is almost gone from the 1.3100.Actions taken to anything.But when the barrier is reached 1.3120, the path to higher prices becomes open.Of course we are talking about the psychological point of view.
similar situation with the level of 80. As soon as the price reaches 1.3180, in our brains trigger fires "to 1.3200 is now within reach."And the same thing from other traders.
How to place orders with price levels increased activity?
Pro levels increased price activity and accumulation of orders is well known not only to you and me, but also market makers.Therefore, quite often happens that the price does not reach a couple of points to the circular level and reverses.Even with a lot of inputs to other traders warrants levels lead to requotes, ieloss of potential profit.
therefore enter the market is worth 5 points above or below (depending on the situation and position) of a certain level, but not at the levels themselves.
Ieif you are open for the purpose of buying 1.3100, it is best to move the take profit at 1.3095.
indicator of price levels Key Levels
Several facilitate the task of taking into account the key price levels can be an indicator Key Levels .Its installation is made according to the standard instructions.
Everything he does - shows the price levels 00, 50, 20 and 80 multi-colored lines.It looks something like this:
- Show 00_50 Levels - on / off showing levels of 00 and 50
- Show 20_80 Levels - on / off displaylevels 20 and 80
- Level 00 color, Level 50 color, Level 20, color, Level 80 color - color levels
Download indicator Key levels