What is Big Figure
'Big figure' is the stem, or whole dollar price, of a price quote. The term "big figure" is most often used in international currency markets, where it is often abbreviated to "big fig." In the U.S., big figure is also referred to as the "handle."
BREAKING DOWN Big Figure
The big figure is generally omitted when traders provide quotations in very fast-paced markets, such as the interbank currency market because the assumption is that it is common knowledge and does not need to be specified. For example, assume that the Japanese yen is trading versus the US dollar in the interbank spot market at 85.50 (bid) / 85.55 (offered). While the big figure here is 85, interbank traders will quote the price as 50 / 55.
While omitting the big figure is accepted practice in interbank and institutional markets, it is seldom done when dealing with retail investors. Even in the interbank markets, traders may need clarification on the big figure in cases where the exchange rate is moving very rapidly, as for instance, during currency intervention by central banks. The big figure may also need to be clarified when the exchange rate approaches round numbers, such as 86.00 yen or 1.3500 euros to the US dollar.
How Big Figure Trades Work
Big figure trades aim to take advantage of retail investors' limits. With the right strategy, trading against retail forex investors can be quite profitable. The market often trades at levels that are critical at various times, which could be due to a Fibonacci level or even a trendline. But at times, it also could be a Forex big figure level.
Forex traders often see one-sided movements – sharp and intra-day price movements. As a price reaches a critical level, traders often think that it can’t go higher, so traders start to take short positions near that critical level, but this is not always advisable since dealers will take you out. Traders must outthink the dealers.
One Strategy for Making a Big Figure Trade
• The best way to make a big figure forex trade is to identify markets that move in one direction and side. These trends help you find targets that are obvious.
• Set orders in such a way that you keep making quick pips. Sell intelligently at various stops so as to make 1, 5 or 10 pips.
• This kind of trade works out in most cases and therefore is less risky. Even if you lose, you know how much.
• If trades don’t work, don’t stay more than 15 minutes.