Ep 108: Trading Tips: Whole Dollar Half Dollar
If you’ve been listening to SteadyTrade for a while, chances are that you’ve heard hosts Tim Bohen and Stephen Johnson tossing around the term “whole dollar half dollar”. But what does this mean, exactly?
While “whole dollar half dollar” might sound like some kind of trading gangsta lingo, it actually refers to key levels for traders that can help them determine entry and exit points for a trade.
Still confused? You’re not alone. Plenty of listeners have asked about it, and in this episode, Tim and Stephen will explain the whole dollar half dollar phenomenon in great detail, including why it’s significant and why it matters.
Whole dollar half dollar: what it means
Learning to read stock charts is kind of like learning a foreign language. It takes time and practice and ideally, immersion. But here, Tim and Stephen are offering up a little Rosetta Stone style mini lesson on looking for whole dollar half dollar points in a stock chart.
In a stock chart, the whole dollar or the half dollar points are like walls. Say that you have a stock that is trading in the $3 range. If it breaks a key level, like $3.95, there’s a high likelihood it will break the dollar point. Likewise at the half dollar point: if that stock were trading at $3.45, chances are pretty good it will top $3.50.
Once you begin to recognize this, you won’t be as freaked out by minor intraday moves, and you can begin to see things that the majority of traders don’t see.
Whole dollar half dollar in action
Note: Be sure to watch this episode on YouTube to see charts illustrating the whole dollar half dollar phenomenon!
In the episode, Stephen demonstrates the whole dollar half dollar levels by showing several examples of stock charts.
You’ll see how, when a stock’s price is pushing close to a half or full dollar, it can psychologically push a stock to the next level.
For instance, if a stock is consistently peaking at .89, you can see how it flirts with the levels and can often go above the dollar point. If it holds that level consistently, there’s a good chance that it can push even further.
A pattern that repeats itself over and over
As Tim and Stephen both note, this is a pattern that repeats itself time and time again in the market.
It follows the same psychology of pricing retail products at $9.95 or $9.99 instead of $10–it gives the buyer a better perceived value. And in the case of the stock market, when enough buyers want in, that stock can explode.
You’ll learn tips for refining your entry and exit points, including why it’s important to look at the volume candle and how you can key in on certain levels to get into a trade.
What makes support and resistance?
Tim and Stephen demonstrate the point at which support becomes resistance and vice versa based on key levels. They talk about when to short when it pops up, and various approaches to trading stocks based on these key levels.
For example, don’t just look at the ascending and descending triangles on an intraday chart. You can make a good case for shorting a peak. They also talk about shorting against the half dollar whole dollar, and why you need to take advantage of weak bounces.
Ask us anything!
Are you curious about something in this episode, or about trading in general? Get in touch!
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This was a good explanation about the Whole/half dollar, and the low priced along with high price stocks.
Lower priced stock you can use the 0.25 increments, and the over $100.00 you can use $5.00 – $10.00 increments.
Is that correct?
hi, first thanks both of you for teaching, i’ve begin leagning 1 week ago and you help a lot !
i’m not ready to trade yet and i plan to subscribe to STT next week to start papertrading
I’ll be watching for earning winner breakout and potential dip buys, i was wondering watching $OCN if a stock downtrendig for several days/months, what kind of catalyts would be stong enough to get the company great again, have you seen it happen in the past ? if so, did you remember the name so i can take a look at it ? what is the best case scenario for a downtrending chart ?
i know i’m looking for adaptation, pennystock and high volatility but i’m still kinda curious
Look at $ROKU in Aug 2019 a good example of a stock running after $100 break