over the past 4 months (my professional trading career so far) i have noticed something that keeps coming back up every time. whenever an instrument gets close to a whole #, it will almost ALWAYS go to it. and when it gets there it sticks like glue. many false signals as the whole # brings it right back in. anybody care to share their experiences? i'm just laying low this afternoon and thought i'd share this.......i am starting to incorporate this into my overall strategies...i.e. when a setup occurs and it says go long at 98.80, say, i almost always take it. why? the odds are its going to 99 first before doing anything. likewise, if the setup says go short at 98.95 i almost NEVER take it. why? i have seen time and time again my stops get run when the price pulls back into 99 and looks for new direction again.
I haven't paid exact attention to the phenomena, other than reading many times how people are attracted to whole numbers, as well as threshold-type round values such $50 and $100. You've probably heard that you shouldn't have whole number stops (such as $90.00) but a little more or less than that value because chances are good lots of folks set their stops at whole numbers, and getting filled at whole numbers they say also invites lots of participants. I don't usually trade at whole numbers myself.