Psychological Level Strategy – Round Number

The Strategy in psychological level is based on performing operations in round numbers or closed, that is to say in performing operations only when it touches either a bearish or bullish trend in double 00 or triple 000 mainly in currencies or in shares or indexes when it is a Round or unique number. Before giving a small example of the Strategy at a psychological level, we must know that three points are critical in the world of investments: financial management, trading strategy, and trading psychology.

The psychology trading is based on the behavior of investors in the operations, that is to say, it studies the movements that make most of the investors psychologically trying to take advantage of the other operators to achieve more profit entering the market before. We cannot say that thanks to trading psychology we will make money and we will never fail, and this would be a big lie, the only thing we are going to do is operations for or against the trend when it touches a psychological level.

What Is The Psychological Level?

Now we will ask ourselves what a psychological level is? Well, although we have only understood above what psychology trading is, we do not know how we can take advantage of it. Because this is very simple, a psychological level is a basic level, to understand it we will make an example with the actions is a company that has to go out to quote in the financial market. Let’s say it has come out with a value of $11, the closest psychological level is $10, which means that it is a fundamental level to buy, waiting for it to go up a bit. The Strategy in psychological level can be used for everything, whether they are CFDs, Forex or Binary Options, the vital thing, in this case, is always to control the risk of the operation, because we can still see some break at the psychological level although most of the time we can always find a rebound in those levels, though app review free signals help.

How The Strategy Works At The Psychological Level

The operation is effortless, but let’s explain it in currencies in this case, let’s say that the euro-dollar EUR / USD falls and touches the psychological level of 1.3500, as we see the 1.3500 is a crucial level to have double 00, which would make us buy in forex or call in binary options. Even so we do not necessarily have to make the purchase at 1.3500, to confirm the signal better and have more possibilities we can do it between 1.3489 to 1.3499, with this drilling in the price in a single stroke we will have twice as many opportunities to guess if it was all at once and without having tested the resistance or support on a psychological level before.