ANOTHER LOOK AT ROUND NUMBERS
I remember trying to justify price stopping at round numbers and people jumped up and down on me, mathematically proving that numbers ending in zero were no more likely to show support or resistance than any other number. It may sound like bumblebees not being able to fly, theoretically, and yet we all know that they do. The Trading Classic Chart Patterns book examined round number SAR.
I found horizontal consolidation regions, and then computed how often those HCRs included a round number. Answer: 22 percent of the time.
- Price trends horizontally near a round number 22 percent of the time.
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