Analyzing Wednesday's trades:
EUR/USD on 30M chart
EUR/USD traded mostly flat on Wednesday. There is a slight downward bias in the movement, and yet the downward movement is very weak. The pair is simply sliding down, moving 20-30 pips a day. It is not the total volatility, but the value by which the euro falls a day. And it doesn't happen every day. Therefore, formally we have a downtrend, but in fact, it is no better than a flat. There were no reports that could push the pair to move in an active manner. The FOMC minutes was released a couple of hours ago and judging by the dollar's growth, they contained some hawkish notes, which the market didn't know. But by the time the minutes was published, beginners had to leave the market. Therefore, there is no trend line, channel, clear trend, or any form of good movement now. This is even more apparent on the 5-minute chart.
EUR/USD on M5 chart
There is not much to say about Wednesday's trading signals, since there weren't any during the day. The pair approached 1.0607 by the end of the day, but even at the moment, there was no signal formed yet. The price approached 1.0669 several times, but the error was too big to open a position. Therefore, beginners should not have opened positions based on our advice and analysis.
Trading tips on Thursday:
On the 30-minute timeframe the pair as a whole maintains the downtrend, but the movement is now weak, with frequent corrections. Such movement is very difficult to work out. Volatility fell and we will not receive much news and reports in the near future. In general, we can expect a few boring weeks. On the 5-minute chart, it is recommended to trade at the levels 1.0535, 1.0587-1.0607, 1.0669, 1.0697, 1.0792, 1.0857-1.0867. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. On Thursday, the fourth-quarter GDP report in the U.S. will be released in the second estimate and the inflation report in the E.U. will be released in the second estimate. Since these will not be the first estimates of the indicators, it is likely that their values will not differ from previous estimates. Therefore, I don't expect a significant reaction from the market. The euro could continue to move slowly downwards with frequent corrections.
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.
