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FX.co ★ How to trade EUR/USD on May 1. Simple trading tips and analysis for beginners

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Forex Analysis:::2023-05-01T02:45:41

How to trade EUR/USD on May 1. Simple trading tips and analysis for beginners

Analyzing Friday's trades:

EUR/USD on 30M chart

How to trade EUR/USD on May 1. Simple trading tips and analysis for beginners

The EUR/USD pair remained in a pure flat between the levels of 1.0980 and 1.1038 throughout Friday. It managed to make small movements beyond this horizontal channel, but overall, volatility was low, and there was no trend. At the beginning of the US trading session, there was a surge of emotions in favor of the euro, and during the European trading session, the dollar gradually strengthened. There were quite a few macroeconomic reports during the day, so it would be reasonable to assume that they somehow influenced the pair's movement. But at the same time, volatility was no more than 60 points - the reaction of traders, if there was any, was insignificant. The pair continues to move mostly sideways. In the European Union and Germany, GDP data for the first quarter was published. In both cases, the actual figures were below forecasts, so the euro's decline was even logical. However, US macro data were not weaker than forecasts, so they should not have triggered a fall in the dollar. But once again, we saw the euro rise where the dollar should have strengthened.

EUR/USD on 5M chart

How to trade EUR/USD on May 1. Simple trading tips and analysis for beginners

On the 5-minute chart, we could see how the pair moved during the last trading day of the previous week. It may seem that the movements were even quite strong, but the overall volatility of the day was only 55 points. Therefore, those rare bursts that we could see were still 30-35 points within the full flat. It was very difficult to work them out, and it didn't make much sense. The only sell signal was formed near the area of 1.0980-1.1000 at the beginning of the US trading session. At that time, PMIs were released in the United States, and the dollar received support of 40 points. However, within the next few hours, the pair returned to its original positions, and the sell signal did not bring any profit to beginners - the price did not reach the target level. But the price still passed 15 points in the right direction, so beginners should have set a break-even stop loss. Accordingly, there was no loss either.

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.

Analyst InstaForex
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