Simple yet very very powerful: Rcf

winstonn

Well-Known Member
#1
Dear Traders,

this is the time tested approach to trade any instrument, be it stocks,forex or commodities etc.

Yes we are talking about ROUND NUMBERS. They are one of the most powerful tools yet most underrated by many traders.

The Big Fishes always look at them. They are professionals who control these levels.
These levels are the best support and resistance levels.
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For any stock less than 100 Rs,

Major Psychological levels are : 10,20,30,40,50,60,70,80,90,100.....
numbers ending with 0

minor psychological levels are: ending in 5's

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See below the chart of RCF 5min,

Major Round number 80 is taken with huge volume.
note the very less volume on correcting bar

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I have a Target 1 as 85 and then 90

targets should be placed on minor psychological levels.
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Any fall on monday is a Bargain price to buy
keeping in mind the stop of below 80 on 5min closing bar basis


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This post is only for educative purpose.
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Happy and Safe Trading,:thumb:
Winston
 
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chachi

Active Member
#3
Hi Winston,

The term 'Psychological levels' caught my attention and hence want to put some of my points as below.

I have also observed this 'Major/minor psychological levels'. Many of my colleagues and friends when putting a buy or sell orders generally go for round numbers like 18, 55, 170, 1250 etc. depending upon the value of the share.

If the value of the share is say about 21.15 and is bullish, they are more likely to put a sell order (when they want to sell) of 22.00 rather than 21.95......

Like wise If the value of the share is say about 52.65 and is bullish, they are more likely to put a sell order (when they want to sell) of 55.00 rather than 54.45 or so......

This I have noticed even in the brokerage houses where many people ask the brokers to sell on their behalf in round numbers.....

This is the reason we can clearly see a huge orders at these whole numbers rather than at other prices...Hence these whole number prices are clearly forming resistances and supports as you have mentioned.

Any experienced players in the stock market who trades on the internet notices these supple points and hence utilize them in their favour.

While buying we can be more successful if we put the price like xx.05 rather than xx.00
similarly while selling it is wiser to put values like xx.95 than x.00 itself.

Regards
 
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