The secret to this trading pattern is that it triggers based upon market events that are no secret at all. Hard to believe, but true. Are you ready?

The secret is BIG round numbers in the stock market. Or specifically, when price approaches and then crosses through these important psychological milestones. For example, 800, 900, 1000, 1100 in the SP500 emini contract, or 1400, 1500, 1600 in the emini Nasdaq futures. Everyone knows these “big” numbers exist. They are “wide in the open” and even talked about on the evening news. So what is the big deal?

Simple: Pull up some historical charts and study each time the big stock indexes (Dow, Sp500, Nasdaq) have crossed these important psychological thresholds. If you can, pull up an intraday 30 minute chart as well. What you will find is that there is an inordinate tendency for prices to oscillate around these “big” numbers. This means the swing trader or day trader can look to make a sequence of trades involving buying under the “big” number, and looking to sell on a cross back above the “big” number. This tactic can be used by both swing traders and day traders. You can play it from the long side only, or long and short.

Trading this way is an art and takes some practice. What makes it difficult is the knowledge that “eventually” prices are going to break away, and the trader naturally does not want to get stuck with a loss. However, if the trader can make a sequence of wins while the oscillations are occurring, it should more than pay for the loss if the trader gets caught when the oscillation breaks. In fact, a trader with the fortitude to keep pounding away at this pattern may be shocked at how many points (Most traders keep score in “Points” rather than dollars.) can be accumulated within a good week or two. Before you get started trading this pattern, be aware that there are a few secrets to using this pattern effectively. For example, it is important to know how far below the “big” number to buy at in order to maximize the odds of a successful trade. If you are interested in this pattern, I suggest you start by observing as many of these events as you can, and making note of how the “round number” effect works. If you are interested in learning more about this trading pattern or other short term trading techniques, make sure to visit my site listed below.

The amazing thing about trading is that there are a number of things that are seemingly right in front of “everyone’s” eyes, yet most don’t grasp that they can create potentially profitable opportunities. Of course this is a good thing, because if “everyone” caught on, the pattern would not exist.