Specific Whole Numbers For Trading Support and Resistance

By Chris on 2013-08-26 in E-mini Trading (0) Comments

Traders including myself take into account specific numbers during the day. While others are keeping an eye on levels of support such as Fibonacci levels and even other obvious recent support or resistance I try to keep an open mind to and not forget the whole number. I've seen whole number price holds in both stocks and when trading futures. Why these are relevant to traders during a trading session comes down to the psychological turning point of newly discovered price areas as well as historical evidence.

As anything else it's important to look at it the same way you would a pivot point or other support area. You should know that a little bit of give and take are to be expected and an exact pivot at the even whole number isn't as common as you would think though you'll see an example of this down below. The snap back from newly discovered price into the previous whole range is in my opinion. Enough for me to keep an eye on it that is.

Trading Over Shoots As You Would Any Other Support and Resistance

Trading over shoot setups or vice a versa is something I take a look at any potential support or resistance area. I'm not looking to place an order at the even whole and forget it. I always assume I'm going to get a better price and if I don't I try and pounce on it. If I miss it then I move on to the next possible set up.

A Look At An Example of Whole Number Support Trading

I concern myself with most even numbers, but specially to give you an example here are a few. Take a look at the 10's 20's and of course 100's. An example from trading the E-mini S&P 500 would be the 1400 level we're trading around now. You can see in the image below how price floats around and holds that 1400 level (yellow highlight). Notice that price broke right through to the upside initially then putted around that level as it held before making its way higher. So we can see that a level such as this works as any other support and resistance and emphasizes why I don't just place an order and forget about it. I notice these levels as I would any other level and work out a plan for what's developing as we approach.

whole numbers in trading

I'm looking for clues as to the validity of this support or resistance. This can come in many forms such as pattern development / fulfillment, pivots or even a healthy show of commitment in price.

This isn't your everyday analysis, but it's something to keep in mind as price approaches a whole level. These levels are just like any other level that you see throughout the trading day whether it's (you) spotting and analyzing turning points or pivot points.

All comments are reviewed before placed live on the site to protect against spam.
You must be logged in to comment!

FULL RISK DISCLOSURE: Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Copyright and Disclaimer
Connect with us on Facebook or Twitter!