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Trading Whole Numbers on the EURUSD

Throughout this site you will start to notice a common theme. Trading what you see is the motto to follow when seeking your trade setups. Don’t let so many things influence your trade entries and exits. Too often we notice how traders wait for this indicator or that to act in a specific way before getting in a trade. This may be okay on some level, but there is a lot more to trading than indicators.

What we’ve found to be a great area to trade is the whole number. The whole number of a currency pair like the EURUSD is considered an area of support and resistance. For example, price coming up to a price level of 1.3300 without much momentum, may run into a lot of sellers making this area a good spot to take put options. The psychological feeling people get at this whole number can make or break a lot of traders. Some people like to take the break out of this number, while others trade it like a wall for a reversal.

There are many ways to trade the whole number and we will discuss a couple of them to you.

The first one, which is our favorite is the wall affect. This means, price has come up from lower levels to an area of a whole number. A lot of people see this number as a place for a reversal. Reversal trades can be very powerful for both short and long term traders. Obviously you want to be on the right side, but like all trading, not every trade will work. The power of the whole number wall is when price does reverse, the buyers who traded the breakout of the whole number eventually realize they are wrong. This means that after we start seeing selling around this number, we will see another push downward from all the people that were buying EUROS. It’s a beautiful thing when it works out.

The chart below shows how price action was moving up to the whole number and reversed. Not only was this number of 1.3300 a strong whole number it was also an area price had not seen in months. This makes the price a serious wall for bull traders to bust through. Remember when we talk about this whole number it doesn’t always mean the exact number. There is usually a small extension past the number. This brings in even more buyers, which makes it even better for the bears. Price will get deeper moves downward when they realize price isn’t going up further.
EURUSD Whole Number Trading
Price also formed a perfect 5 minute wick of about 7 pips right on this line. Price never came back to that high. After one last small attempt to make it back up to the 1.3300 level, buyers knew it wasn’t going to happen. Price then proceeded to drop 70 pips from this high. A perfect setup for you to take a put option or even a short trade on the spot Forex market.

Another trade we like to use the whole number at, is when price has eventually made it through. This means it now becomes a strong area of support. You let price form a nice base while buyers and sellers even themselves out above the whole number. This will allow the whole number to hold it’s ground.

In the image below you can see how price eventually got above the 1.2800 level. It then proceeded to consolidate above that number. Eventually after it tried to move to the south side through this number price jumped up 30 pips. This whole number became a ground for the EURUSD.
Trading the Whole Number as Support

Remember, trades like this happen all the time. Just make sure you understand what is happening when price hits these levels. You can also trade half whole numbers, but with a bit more caution. Try not to get stuck on the wrong side of the break. Remember more times than not, price will have a tendency to come back to where it started.

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