Trade Levels that leave a Mark
Easily See important SnR Round Number price levels for any Instrument
If you agree that prior levels of Support and Resistance can be historically significant, then the Round Numbers indicator is for you!
Human beings have a tendency to favor Round Numbers… it appears to be built into our DNA. You see it in sales and advertising all the time. Being that the Stock Market is still mainly driven by mass human involvement, you will also often see fights taking place at “rounded” Support and Resistance levels.
Often you can see that .00 and .50 levels are important thresholds for leading indicies such as the Dow and S&P500.
Market Makers tend to buy and sell around these areas, and since they are so easy to remember, day traders use it to also see the “big picture”.
Round numbers are known to be market inflection points. If an instrument crosses a Round Number point, one can expect a break out continuation move.
Here is a common pattern you will see a lot… the first time price trades at a round number you will see a very clear reaction to it. First… price tends to gravitate toward the level, then price will test that level while the Big Money players take out all the stops that tend to reside at primary levels. You will see it test… bounce… re-test, and if a strong trend is in play… eventually, price will break through and move the next Round Number value.
- Primary goal is to quickly and automatically show the “round numbers” for an instrument. These are the psychologically important price levels.
- The secondary goal is to let the user add up to 5 of his/her own user-definable price levels.
- The indicator then provides numerous coloring/shading options at all of these levels.
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