Trading Double Zero: A Profitable Strategy with Trading Psychology

In the world of trading, human psychology often influences decisions, especially when considering rounded numbers or amounts. Understanding this psychology can be leveraged to create profitable trading strategies, especially in intraday trading. One such strategy that can be applied is Trading Double Zero.

Imagine you're buying a toothbrush priced at Rp 1450 at a mini-market, and when paying, you give Rp 1500. The change you receive is Rp 50. In this situation, most people would say "Just keep the change." Human psychology tends to think about rounded amounts, and this also applies to trading.

Double Zero Trading Strategy:

Double Zero occurs when the last two digits of the market price are zeros. For example, USD/JPY at a price of 107.00 or EUR/USD at 1.2800. In this condition, there is a strong tendency for the chart to approach or touch the double zero level, as if it were a magnetic field. Price reactions like this can be utilized as an opportunity for profit of about 50 pips with a risk of only 12-20 pips, especially if the support and resistance levels are at the double zero condition.

Reasons Why This Strategy Works:

The majority of traders place take profit and stop limit orders at round numbers. Large banks that have access to trading order data also use them as exit points. By using this strategy, we can follow the same positions as the "market makers."

How to Use the Double Zero Strategy:

Buy Position:

1. Look for pairs below the double zero level.
2. Place a buy order after the price approaches the double zero level above the current price.
3. Place a stop loss not more than 20 pips.
4. Determine take profit after the price touches the double zero level.

Sell Position:

1. Look for pairs above the double zero level.
2. Place a sell order after the price approaches the double zero level below the current price.
3. Place a stop loss not more than 20 pips.
4. Determine take profit after the price touches the double zero level.

This strategy is effective if there are no major news events at the time and if there are support/resistance levels.

It is recommended to use currency pairs with small daily trading ranges.

Also, pay attention to market conditions and avoid using the strategy during high volatility.

Implement wise risk management to protect your capital.

By understanding trading psychology and applying the Double Zero strategy, it is hoped that it can increase the chances of success in intraday trading. Always test and develop strategies according to your trading style and preferences. Hopefully, this strategy is beneficial for all traders.

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