Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

Trading Around the Psychological Round Numbers

58 sec read

Trading around the Psychological round numbers like 7000, 8000, 9000 are never been a easier task mentally. This is where many trading participants come up with weird forecasting stuff and this is the zone where frequent stop hunting happens and it is the process of removing weaker hands before market does its next move.

Nifty Futures 5min Charts

psycological-round-numbers

Weird Forecasting Around Round Numbers

For many people those who watches just the price or price based indicators try to defend round numbers as psychological support/resistance zone. This is where most of the players go wrong when markets constantly whipsawing around the psychological reference.

Totally it is a frustration game to trade around psychological reference zone. For Example any price dip below 8000 will invite dumb forecasting levels like 7500, 7200, 6800 kind of prediction and recovery above 8000 will again build assumptions like “Nifty Bottomed out” kind of stories and make players to place stops around 8000 – round number levels.

Frustration Game Around Round Numbers

A constant whipsaw around the psychological reference zone kills the patience of the players as the short term dips are sharp and the recoveries are even sharper. However this ongoing whipsaws for some time make players to loose faith in their market prediction levels. After a long frustration when the real rally occurs that brings even more discomforts among the participants, disbelief about the rally and that makes them to come and trade exactly against the trend.

Whenever market nears the psychological reference and if there is a constant whipsaw around the reference then one should recognize the game much better than the others thereby better focus on your charts, re-strategize and eliminating un-necessary mental strain.

Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

Ultimate Guide to Momentum Trading

This a brief video guide for the momentum traders which explains right from what is momentum trading ,how momentum trading is related to diffusion...
Rajandran R
18 sec read

What We Can Learn from the Sideways Market –…

What is more required during a sideways market is frequent evaluation of your strategy, keeping your emotional balance in check, and not getting into...
Rajandran R
1 min read

What We Can Learn from the Sideways Market –…

The sideways market occurs when markets are not dominated by the large players and instead traders attempt to dominate the market and keeps the...
Rajandran R
57 sec read

One Reply to “Trading Around the Psychological Round Numbers”

Leave a Reply

Get Notifications, Alerts on Market Updates, Trading Tools, Automation & More