Some levels are watched by millions of traders at once. Those are free information.
Round numbers
Prices like 1.1000, 150.00 or 2,000 on gold attract orders. People like neat numbers for stops, targets and options. Expect reactions there.
Previous highs and lows
- Yesterday's high and low.
- Last week's high and low.
- The month's opening price.
Day traders watch these religiously. A break of yesterday's high often brings a burst of buying.
Pro tip
Combine them: a round number sitting right on last week's high is a much stronger level than either alone.
Wick says
Round numbers are like birthdays. Everyone remembers them, so something always happens.
Key takeaways
- Round numbers attract clusters of orders.
- Previous day, week and month highs/lows are key reference points.
- Overlapping levels are the strongest.