I believe that one might consider ALL price movement to be a result of two 'forces' referenced by 'Round Numbers'.

Force 1 can be thought of as a type of 'ionic bonding' where there is attraction between (say) negatively charged round numbers and positively charged prices. So, force 1 describes the 'constructual' path of prices to round numbers.

Force 2 might be when the polarity of the price action changes to match that of the round (as the round number has been 'achieved'). In this case, two similarly charged phenomena repel from each other.

Thus the total sum of price action might be considered as something approximating:

Total = Constructural + Repulsion.

I'm interested in testing this:

One may find better results from testing DIRECTIONAL strategies in the Constructural piece as prices approach the round.

Interestingly, I believe testing 'volatility' (not directional ) strategies for the Repulsion force part is likely a better option as there appears more volatility in the 'sign' of the repulsion move than 'normal'.

So, which is stronger,  Constructural or Repulsive?

I do not know. Depending on how you set up your test you likely could 'prove' both.

Given the way chains of relationships develop in cross market price action, my null hypothesis is that Constructural wins more often but Repulsion wins more.

anonymous writes:

Rather than a "Force 1" of ionic bonding, electronegativity might offer a more complete insight. 





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