Analyzing Friday's trades:
GBP/USD on 30M chart
On Friday, the GBP/USD pair showed another upward movement, and another ascending trendline was formed, the fifth in a row. Recall that consolidating below the previous four did not lead to any decline in the pair. Therefore, all trendlines and sell signals do not mean that the pound will start to fall. On the contrary, after each such signal, the pair grows again. Completely illogic. Even on Friday, with strong data from the US, the pound appreciated again. The nature of its movement leaves much to be desired, which is clearly visible on the 5-minute chart. In other words, the pair continues to grow but grows very "jagged" and in an illogical manner. It should have fallen on Friday, but the market reluctantly worked out strong data from the US, and then started new long positions. As a result, we got unnecessary reversals that should not have been there.
GBP/USD on 5M chart
The trading signals on the 5-minute chart weren't good. The price is now in an area where many levels are concentrated, among which it is quite difficult to trade. There is an area of 1.2577-1.2597-1.2616, and any buy or sell signal formed by leaving it has high potential losses. Therefore, such signals should not be worked out. For example, the first buy signal was during the breakthrough of 1.2616. Stop Loss should have been set below 1.2577... Thus, all signals formed on Friday should have been ignored. Perhaps in the near future, some levels will be removed, and trading will become easier. But let's remember that the pair generally continues to move illogically.
Trading tips on Monday:
On the 30-minute chart, the GBP/USD pair continues to trade higher in the medium term, or at least it doesn't fall, which is clearly visible on the 4-hour chart, as well as on higher ones. The movements are mostly illogical, as is the market reaction to fundamental and macroeconomic events, which Friday proved once again. Even the upward movement itself is too "jagged" to profitably work it out. On the 5-minute chart, it is recommended to trade at the levels 1.2466-1.2477, 1.2507-1.2520, 1.2577-1.2597-1.2616, 1.2659-1.2674, 1.2697, 1.2772, 1.2860. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. On Monday, there are absolutely no interesting events planned in the UK and the US. The pair may continue its upward movement because it currently requires no reasons or factors for this.
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.
