Big Figure

In forex trading, the term “Big Figure” refers to the first two digits of a currency pair’s price quote. It represents the whole number part of the price, excluding the decimal fraction. For example, in the EUR/USD currency pair, if the quote is 1.2350, the Big Figure would be 1.23.

The Big Figure is an important concept in forex trading because it helps traders quickly identify the general price level of a currency pair. It provides a reference point for analyzing price movements and making trading decisions.

The Big Figure is often used in technical analysis to identify support and resistance levels. These levels are significant because they represent psychological barriers for traders. For example, if the EUR/USD pair is approaching the Big Figure of 1.2000, traders may expect increased selling pressure as traders may be inclined to take profits or initiate short positions at that level.

The Big Figure can also be used to set stop loss and take profit levels. Traders may choose to place their stop loss orders just below or above the Big Figure, depending on their trading strategy and risk tolerance. Similarly, take profit orders can be set near the Big Figure to secure profits before price reversals occur.

It’s important to note that while the Big Figure can act as a psychological level, it is not always a precise support or resistance level. Price movements can break through or bounce off the Big Figure, so it’s crucial to use other technical analysis tools and indicators to confirm trading decisions.

In summary, the Big Figure in forex refers to the first two digits of a currency pair’s price quote. It is used to identify psychological support and resistance levels and can help traders set stop loss and take profit levels. However, it should be used in conjunction with other analysis techniques for effective trading decisions.