Analyzing Wednesday's trades:
GBP/USD on 30M chart
GBP/USD also started a weak bearish correction, which looks more like a pullback. But this ended very quickly, near 1.2444, which had been the upper limit of the horizontal channel on the 24-hour view. Now this level can be a support for the price, if traders keep on inventing more and more reasons to buy the pound. Thus, after overcoming the second consecutive uptrend line, the pound also continues to rise quite calmly. The UK services PMI was better than expected, while ISM and ADP reports in the US were disappointing. What kind of reaction would be logical to such data? Buying the pound and selling the dollar. But what did we end up seeing? The dollar rising, which previously fell at every opportunity. So once again: the market doesn't pay any attention to the macroeconomic background, but uses any occasion to buy the pair.
GBP/USD on 5M chart
There were actually no trade signals on the 5-minute chart. The pair spent most of the day in the area of 1.2444-1.2471, and the total volatility of the day was 80 pips. It doesn't seem small, but not for the pound. As a result, beginners could only work out the first rebound from the area mentioned above. After struggling, the pound rose by 20 points, which made it possible to set the Stop Loss at breakeven on the long position. According to this order, the deal closed at 0.
Trading tips on Thursday:
On the 30-minute chart, GBP/USD continues to rise almost every day. The 1.2440 level did not meet expectations and was easily overcome. Therefore, the upward movement may now continue. There is no point in drawing a new uptrend line, because consolidating below it does not lead to downward movement. The pound is overbought and continues to grow anyway. There is no reason for it to rise, but it's still doing it. And in days when growth would be really logical, it does not show it. On the 5-minute chart, it is recommended to trade at the levels 1.2143, 1.2171-1.2179, 1.2245-1.2260, 1.2343-1.2360, 1.2396, 1.2444-1.2471, 1.2577-1.2616, 1.2659-1.2674. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. Nothing scheduled for the UK, and the US will only release a minor report on unemployment claims.
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.
