Analysis of previous deals:
30M chart of the GBP/USD pair
The GBP/USD pair was trading in such an unappealing and unpleasing manner on the 30-minute timeframe on Wednesday. Novice traders can see for themselves how the pair moved last Friday and on Monday (a clear trend movement), on Tuesday (a clear correction against the trend) and today (a "fence" with a "swing"). Thus, just by looking at the chart, we can conclude that it was extremely problematic to make money today. However, we will try to analyze the situation and all the deals that could have been opened today. First of all, it should be noted that, formally, an upward trend remains for the pound/dollar, although the price has been above the rising channel a long time ago. And so, today we should have considered long positions from the MACD indicator. There were two of them during the day. And both are well below zero, so they shouldn't have been worked out. Furthermore, two signals were formed near the 1.3913 level, both for breakthroughs. The first one - for selling- turned out to be false, since the price went down a bit more than 20 points after its formation, which was at least enough to set Stop Loss to breakeven. The second - to buy - is also false, since it is still open at the moment, and the price could not go up 20 points after its formation. Nevertheless, there is now a certain profit on it (about 10 points at the time of this writing), thus, novice traders are advised to close a buy deal manually.
5M chart of the GBP/USD pair
Three signals were formed on the 5-minute timeframe, two of which exactly repeat the signals from the 30-minute timeframe. As in the case of the euro, the signals would have appeared faster. However, this does not matter, since the first signal would still be closed at breakeven by Stop Loss, while the second one is still open and should be closed at the lowest profit, while there is such an opportunity. There was another signal (the first circle) in the form of a rebound from the same 1.3913 level. It also turned out to be false and also closed at breakeven by Stop Loss, since the price did not go up at least 40 points required for Take Profit, and did not reach the nearest level either (there was no 1.3947 level today, this level - today's high). Thus, a handful of false signals could even have been left with a minimal profit of 10 points. This is an excellent result for a day like this. Take note that a rather important inflation report was published in the UK today, but the markets did not pay any attention to it, so there was no sense in it. The same applies to the speech of Bank of England Governor Andrew Bailey.
How to trade on Thursday:
On Thursday, we recommend trading again in accordance with the existing upward trend on the 30-minute timeframe, although the price is still above the rising channel. So tomorrow it will be necessary to wait for new buy signals in the form of upward reversals of the MACD indicator. This indicator is near the zero level and can potentially form strong signals. In America, only a minor report on claims for unemployment benefits is scheduled for April 22, meanwhile, the news calendar is empty in Britain. The important levels on the 5 minute timeframe are 1.3865, 1.3885, 1.3913 and 1.3947. The price can bounce off them or overcome them. As before, we set Take Profit at a distance of 40-50 points on a 30-minute timeframe, on a 5-minute timeframe, the target is the nearest level. If the nearest level is too far away, then it is recommended to maintain the deal in manual mode, tracking changes in the market. When passing 20 points in the right direction, we recommend setting Stop Loss to breakeven.
On the chart:
Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.
Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.
Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.
The MACD indicator consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).
Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.
Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.
