Prices ending by a round number as 20, 50 or 100 have some particularities. The market often considers these prices as support or resistance. That means the probability to see a technical rebound after the market touch theses prices is very high.

It is very important for you to implement these particular price knowledge in your automatic trading system.

The rounded prices detection algorithm

There is a very simple algorithm that allows you to know if the actual price of an asset ending by 100, 50 or 20 thanks to ROUND instruction.

hundred = ROUND(close / 100) * 100
fifty = ROUND(close / 50) * 50
twenty = ROUND(close / 20) * 20

Define nearest hundred round number as a target

After that, you can choose this price as a target. However, you should control the round price is higher than the actual price. If the rounded price is lower than the actual price, you can just add 100 points at the actual price in case of a long position opening. For example, if the actual price is 13244, the rounded price to the nearest hundred will be 13200 therefore you must add 100 to obtain 13300.

// long position case
IF hundred < close THEN
    hundred = hundred + 100

After your verified the nearest hundred is higher than actual price, you can define your TARGET.

pTargetHundred = hundred - close

If you decide to define your target price after you opened a position, you should use POSITIONPRICE instruction to compute your target price. POSITIONPRICE indicates the current average position price of the whole opened orders.

pTargetHundred = hundred - POSITIONPRICE

Be careful, this example works for a long position but if you want to open a short position, you must verify the rounded price is lower than the actual price. If not, you must sub 100 points of rounded price.

// short position case
IF hundred > close THEN
    hundred = hundred - 100
pTargetHundred = hundred - POSITIONPRICE

Choosing to determine your TARGET on the nearest rounded as hundred when you trade index as DAX increase strongly the success rate of your automatic trading system.

If you want to learn more about automated trading, please see our automated trading learning section.

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