Buy/Sell on round numbers

Hi All,

I have noticed the below behaviour in EURUSD pair. It may work in other pairs also.

Timeframe - 15 min
Pair - EURUSD
Buy whenever the price moves upward and touches 1.2600, 1.2700, 1.2800 round numbers.
Sell whenever the price moves downward and touches 1.2600, 1.2700, 1.2800 round numbers.
Take profit - 40 Pips
Stoploss - 20 Pips
Eg -
Buy when the price moves upward and touches 1.2600. TP - 40 pips and SL - 20 Pips.
If the prices again moves upward and touches 1.2700 then again buy at 1.2700 with TP - 40 pips and SL - 20 Pips.
If the prices again moves downward and touches 1.2600 then sell at 1.2600 with TP - 40 pips and SL - 20 Pips


Anyone interested can try to backtest and post your reviews. Negative or possitive whatever it may be.

Thanks,
srpips

This is a common practice as significant round numbers attract enough orderflow to effect the market. Per academic studies, round numbers tend to be take profit targets, hence the offloading of positions and the retracement.

There's a nice MT4 indicator called 'Sweet Spots' that you might find useful. It can be set to show macro or micro '0' levels. I don't remember where I found it though. So, just run a Search for it on the MT4 indicator download sites. A word of caution - the one I used seemed to use a lot of resources, when I set it to run on all the pairs I watch. But, the concept is valuable enough that I set the levels, manually...

I don't want to deter you from your experience but this is one of the most 'Lehman' method visible with naked eye which will fail you in the long run.
In my initial trading days, a few years back I had tried something similar with manual trading with multiples of 50 . eg 1.2600 . 1.2650,1.2700 . etc.
If you want to scalp for a few pips (5-10) then it is does reward but it is also risky. You need to do this on ECN/STP accounts with minimum spread.
I would suggest that you abandon this method and move to another. It is up to you whether you want to heed this advise or not.
All the Best to you in your trading.

Round number on itself does not mean much.

It is a level worth noticing but not alone.

For example if your profit on a sell is 12690/12695, well of course better put it above 1.2700.

Most important use is for confluence, if you got for example a fibonacci level, a trendline and or support resistance, a round number is a nice level to set your pending order.

A round number as round as possible such as 1.2500, 1.5000, 2.0000, etc..., is what you might looking for.

Regards,