In the world of electronic forex trading where an increasing volume is generated by automated programs, it is amazing that psychological or emotional levels still have a significant impact. It may be that my mind acts as an algo but whatever the case there are pivotal forex trading levels that I use that are as relevant today as they were when I first started trading. One of these is the “50”level.
While what I refer to as big figures (e.g. 1.08, 150.00, 1.35, etc) ) often set the tone and direction for a currency,
But there is another level to keep an eye on.
I find the “50” level may be the most important for day trading. What I mean by”50” are levels like 1.0850, 151.50, 1.3550, etc. it may be as simple as the “50” level is often an options barrier or a place where buy/sell/stop loss orders are placed although I believe the psychological or emotional influence may be most important.
As an example, test your sentiment towards a currency or any market you trade when it trades above or below the ‘50” level. It affects my emotional sentiment towards a currency and assume it may affect yours as well.
I have created the following video to illustrate the point.
As you can see by the video illustration, the “50” level comes into play across various currencies and other markets. Sometimes it acts as a support or resistance, sometimes it is like a magnet as algos search out stops, and other times it acts like a battle line. No matter what the case, it has an influence on sentiment and helps set the bias for a currency.
As always feel free to contact me at jay@global-view.com with any questions, or comments or to ask me more about how to use the “50” level for trading.
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