Psychology of Round Numbers - Psychology and Money Management | futures trading

Go Back

> Futures Trading, News, Charts and Platforms > Psychology and Money Management

Psychology of Round Numbers
Started:April 2nd, 2011 (12:38 PM) by Anagami Views / Replies:1,227 / 2
Last Reply:April 4th, 2011 (03:58 AM) Attachments:1

Welcome to

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:
  • We work extremely hard to keep things positive on our forums.
  • We do not tolerate rude behavior, trolling, or vendor advertising in posts.
  • We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple, and we will never resell your private information.

-- Big Mike

Thread Tools Search this Thread

Psychology of Round Numbers

Old April 2nd, 2011, 12:38 PM   #1 (permalink)
Live Your Bliss
Cancun, Mexico
Futures Experience: Advanced
Platform: NT
Favorite Futures: ES
Anagami's Avatar
Posts: 696 since Dec 2010
Thanks: 473 given, 1,385 received

Psychology of Round Numbers

The paper attached.

Attached Thumbnails
Psychology of Round Numbers-round-number-effects-2011-03-08.pdf  
Reply With Quote
The following 9 users say Thank You to Anagami for this post:

Old April 2nd, 2011, 12:38 PM   #2 (permalink)
Quick Summary
Quick Summary Post

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.


Old April 4th, 2011, 03:58 AM   #3 (permalink)
Fortitudo et Honor
Austin, TX
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: Futures
Posts: 882 since Mar 2011
Thanks: 128 given, 700 received

The "left digit" phenomenon is the same phenomenon that we find in sales/marketing.

Why is it that virtually everything that's advertised or sold, is done so 1 tick below?

Gasoline for rarely $3.19 a gallon (it's $3.19 and 9/10ths). Why don't they just call it $3.20 a gallon?

Cars sell for $29,995.00 (instead of $30,000.00). Furniture, clothing, name it...extensive research in the area of psychology has been done for marketing that tells the seller to undercut the whole number....because I guess they believe that if something is $2.99, it's more attractive than if it's $3.00.

The psychology breaks for things like "a buck" which has it's own unique association. That's why you have McDonald's that features "The Dollar Menu" (and "Dollar Menunaires") and Wendy's that features "My 99" or the $.99 menu. I guess McDonald's thought there was significant recognition around the concept of a single dollar bill. Subway now features the "$5 footlong" so there are obviously exceptions to the rule where the distinction of a commonly exchanged monetary amount, (and rememberence) trumps the reluctance try to minimize the appearance by making it $4.99 instead of $5.00 (i.e., it's much more catchy to say $5 footlong than to say $4.99 footlong).

It brings up an interesting subject of the cost of coin manufacture. In 2006, we actually passed the point where it costs more money to make a penny and a nickel than they're worth. At this point, not only does it cost more money to make a penny, the metal contained in the penny is more than it's worth. I wonder with inflation picking up momentum, how long we'll continue to have pennies and what the impact will be on businesses and marketing/advertising when everything begins being rounded to the nearest nickel. (nickels are in the same boat, as they cost more than $.05 to produce). I'm sure they can change the composition of the nickel to get it down again, but still....

Reply With Quote
The following user says Thank You to RM99 for this post:

Reply > Futures Trading, News, Charts and Platforms > Psychology and Money Management > Psychology of Round Numbers

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Upcoming Webinars and Events (4:30PM ET unless noted)

NinjaTrader 8: Programming Profitable Trading Edges w/Scott Hodson

Elite only

Anthony Drager: Executing on Intermarket Correlations & Order Flow, Part 2

Elite only

Adam Grimes: Five critically important keys to professional trading

Elite only

Machine Learning Concepts w/FIO member NJAMC

Elite only

MarketDelta Cloud Platform: Announcing new mobile features

Dec 1

NinjaTrader 8: Features and Enhancements

Dec 6

Similar Threads
Thread Thread Starter Forum Replies Last Post
What Would Next Round of Fed Monetary Easing Look Like? Quick Summary News and Current Events 1 June 1st, 2012 04:21 PM
The psychology of choking BCNTrader Psychology and Money Management 4 May 27th, 2011 11:10 PM
Indicator that paints large round numbers? Trankuility NinjaTrader 3 February 14th, 2011 02:31 PM
The Psychology Of Trading? NYSE Psychology and Money Management 7 November 21st, 2010 09:30 PM
Round Numbers in Daytrading? ikeaboy Traders Hideout 7 September 1st, 2010 05:51 AM

All times are GMT -4. The time now is 09:43 AM.

Copyright © 2016 by All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts

Page generated 2016-10-26 in 0.07 seconds with 20 queries on phoenix via your IP