Analyzing Thursday's trades:
GBP/USD on 30M chart
GBP/USD also fell on Thursday, as I predicted. The pound started falling last night so at least a half of it was not connected with the macroeconomic or fundamental background. Meanwhile, the pair was mostly influenced by the same factors as the euro/dollar pair. The only thing I can add is the UK Services PMI, which was higher than the November value but lower than the forecasted one and stayed below the "waterline" of 50.0. Basically, I don't think that the British pound was falling exclusively because of the macro data. Most likely, all the factors taken together (including the technical one) triggered that fall. I believe that the pair will fall further, but on Friday much will depend on the US data. The results might turn out to be weak, which might provoke the decline of the USD or the rise of GBP.
GBP/USD on M5 chart
There were several good trading signals on the 5-minute chart. The first one formed near 1.2057 during the night time. At the opening of the European trading session, the price moved away by only 5 pips from the point of formation, so novice traders could open short positions. Later the pair fell to 1.1950-1.1957, and then to 1.1863-1.1877, from which it bounced. At this point, it was necessary to close the short positions. Profit amounted to 140 pips, which more than compensated for the losses on the EURUSD pair (by the way, it wasn't much) and so beginners could gain some good profits. The buy signal near 1.1877 should not be used since it was formed late. As a result, the day was very successful due to a good trend movement.
Trading tips on Friday:
GBP resumed the downtrend on the 30-minute chart. I believe that it could still fall further, so I expect it to continue falling within the next week or two. It is also noteworthy that the pair may grow on Friday, but everything will depend on the nature of the US macro data. On the 5-minute chart, it is recommended to trade at the levels 1.1648, 1.1716, 1.1793, 1.1863-1.1877, 1.1950-1.1957, 1.2008, 1.2057-1.2079 and 1.2141. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. The only thing planned for Friday in Britain is the UK Construction PMI, which is not very important, especially against the background of other reports. In the US, there will be data on labor market, unemployment, wages and the ISM index. At least three out of the four reports have "important" status.
Basic rules of the trading system:
1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is.
2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored.
3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement.
4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually.
5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel.
6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels.
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 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, and 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 patterns (channels and trendlines).
Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations.
Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.
