Analysis of Monday's deals:
30M chart of the EUR/USD pair
The EUR/USD currency pair traded absolutely calmly on Monday, within the flat. The chart above clearly shows that the price spent the whole day between the levels of 1.0269 and 1.0359 and almost managed to reach both of these levels. The European Union was set to publish a report on industrial production, which, as expected, did not make a splash on the foreign exchange market. This is not the most important report in existence. Therefore, the pair traded on "bare equipment" the whole day. The upward trend remains relevant, as eloquently evidenced by the trend line. The pair could not even properly correct following the strong growth on Thursday and Friday. We continue to believe that a significant correction should occur this week. The fundamental and macroeconomic background will be weak, so bulls may move away from the market a bit.
5M chart of the EUR/USD pair
Two trading signals were formed on the 5-minute chart. It is always inconvenient and dangerous to trade in flat conditions because the signals could be formed several times more, and most of them could be false. However, everything went well on Monday. First, the pair rebounded from the level of 1.0354 with an error of three points, which was a sell signal. Since there was an error in the formation, novice traders could have missed this signal. But those who worked it out made a profit of about 50 points, as the price dropped to the nearest target level of 1.0277. The rebound from the level of 1.0277 was already without any errors and it was necessary to open a long position on it. The price failed to reach the level of 1.0354 until the evening, so this position had to be closed manually. Profit on it amounted to 35 points. Thus, in any case, newcomers could make a good profit.
How to trade on Tuesday:
The pair continues to steadily move up on the 30-minute chart. We have already said many times that the euro's growth is now very ambiguous and unreasonable, but at the same time there is this movement, and there is also an upward trend line. Therefore, the upward trend, whatever it is, does not raise questions. There should be little news and reports this week, so we expect a downward correction. On the 5-minute TF on Tuesday it is recommended to trade at the levels 1.0123, 1.0156, 1.0221, 1.0269-1.0277, 1.0354, 1.0383, 1.0433, 1.0465, 1.0483, 1.0535. When passing 15 points in the right direction, you should set Stop Loss to breakeven. The European Union will publish a report on GDP for the third quarter in the second assessment. We do not expect a strong market reaction to this report, only if its value is very different from the forecast. On the other hand, not a single important event is scheduled for the US.
Basic rules of the trading system:
1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal.
2) If two or more positions were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored.
3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading.
4) Trade positions are opened in the time period between the beginning of the European session and until the middle of the US one, when all positions must be closed manually.
5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel.
6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance.
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.
The MACD indicator (14,22,3) 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 speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.
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.
