Monday, November 1, 2010

10 - PSYCHOLOGICAL LEVEL

Pyschological level is a level that has rounded off numbers. For example, 10, 20, 50, 100, 250, 500, 1000, 10000 and so on.


Sometimes it is called support psychological level or resistance psychological level.


fig. 19
fig. 20
Tips: It is better to buy above psychological level a little bit because the bid volume at psychological level usually very excessive. So, it is hard to get the stock at that level. On the other hand, it is better to sell below psychological level a little bit because the offer volume at psychological level usually very excessive. So, it is hard to sell the stock at that level.