Psychological Levels
Master the art of trading round numbers where institutional orders and stop losses cluster.
Concept
Psychological levels are round price numbers where traders naturally place orders. The "rounder" the number, the stronger the level.
- Major: 1.0000, 100.00, 50000 (BTC)
- Secondary: 1.0500, 105.00, 55000
- Minor: 1.0550, 105.50, 55500
Why They Work
- Traders place stop losses at round numbers
- Take profit orders cluster at round levels
- Institutional orders often target round figures
- Self-fulfilling prophecy effect
Trading
- Watch for reactions at psychological levels
- Combine with other S/R for stronger zones
- Expect stops to be hunted at round numbers