The basic principle is that “big figure” provides support and resistance. This is very much based on crowd psychology. Many traders base their targets on a pair moving to the next “big figure” and then exit their positions at that point reversing the buying or selling momentum.
For example, if EURUSD moved up from 1.1500 to 1.1600 that is a 100 pip move between the two “big figure”. If price has not crossed over the big figure of 1.1600 previously in the trading day then there is a high probability that after price crosses over it will retrace back below the big figure.
What is the optimum entry?
How far do you allow it to cross before it changes direction? This is where the Tiger Time Lanes can be very useful. If there is a band shade or multiple band shade levels the other side of the big figure (within 15 pips of big figure but ideally around 6-10 pips) then is is an excellent point to take the trade.
If you haven’t got a copy of The Tiger Time Lanes then you can instead look at 1, 5, 15 and 60 min charts to see if there are any other natural points of support and resistance close or perhaps longer term MA’s.
Remember, this is a scalping strategy and you would be looking for 6-10 pips as your target. This doesn’t mean that you can’t get a big move from this, but then lots of other factors come into play. Don’t be upset if make 7 or 8 pips and the price goes on to retrace 50 or 60 pips. Keep in mind your your objectives for the trade once achieved what happens next to price is immaterial.
What else do I need to consider?
Obviously the reasons for a move are very important. If we have just had news driving the price action this greatly reduces the probability of success; much of course depends how far price has come and the momentum behind the price move.
The more you watch price moving over or under big figure the more you will get a feel for the strategy. As with all new strategies practice it first on a demo account .