Big, Round, and Probable

Karen Wong and Daryl Guppy

Chapter 7 in Stocks and Forex Trading:How to Win, 2021, pp 55-59 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Going once, going twice … SOLD at $1,450,000! During a live house auction, a leading bidder was reluctant to increase his bid by $1,000 to make it $1,451,000, resulting in the sold price of $1,450,000 to the nearest competitor. We just love round numbers; 50, 100, 120. Auction results of properties sold are more often than not the prices ending with nice round numbers. These are levels where buyers, sellers, and price seem to naturally agree and intersect. Much the same is seen in trading as it is similar to the continuous bidding at an auction. The big figure numbers and the round numbers can provide high probability areas to enter or exit a trade…

Keywords: Trading; Stock Trading; FX trading; Currency Trading; Forex; CFD; Security Trading; Trading Games; Daryl Guppy (search for similar items in EconPapers)
JEL-codes: G1 G11 (search for similar items in EconPapers)
Date: 2021
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