Today's little candlestick-chart vignette: $MAGMA has moved above the 0.47 level, 50 days after it last reached this point.
To prices, round-number levels are just ordinary numbers; to people, they're a big deal.
Joking aside, lots of stop-loss orders tend to cluster around these levels. Once the price breaks through, those stops can all be triggered at once, often causing volatility to spike suddenly.
Sizing your position based on where you place your stop-loss is much steadier than trading on gut feeling.
To prices, round-number levels are just ordinary numbers; to people, they're a big deal.
Joking aside, lots of stop-loss orders tend to cluster around these levels. Once the price breaks through, those stops can all be triggered at once, often causing volatility to spike suddenly.
Sizing your position based on where you place your stop-loss is much steadier than trading on gut feeling.