Trading through round and whole numbers like .25 .50 .75 and .00 are of psychological importance to many traders
. Big money managers and old time professional traders dont care about the pennies that scalpers and algorithms try to capture.
These people are looking for some type of move and they are always thinking ahead to the next important price level. Of course now, the more even the number, the more powerful the psychology. So .50 and .00 are considered more important in terms of buying and selling in the active traders mind. With the bigger money not putting buys or stops at odd numbers like $52.57, you can expect prices like $52.50 or $52 getting more action resulting in refreshing sellers or buyers.
Big money likes to think in half and whole dollars when making purchases or sales. Studying the intra-day market strength and understanding how level 2 reacts in your individual stock right before it turns coupled with focused round and whole number trading can increase your chance of making sizable trades for great profits. Heres a sample chart of RIMM and how it looked at every round number during some type of consolidation.
Visit link for the Chart: http://www.staralliancecapital.com/blog/?attachment_id=168
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