Analyzing Friday's trades:
GBP/USD on 30M chart
On Friday, GBP/USD once again failed to overcome the level of 1.2620. Therefore, the price remains above the ascending trendline, and the uptrend persists. However, take note that the price also failed to settle above the level of 1.2725 three times. It is illogical for the pound to rise every day, so we still expect a bearish trend in the future. Naturally, in order to seriously consider short positions, we should wait for the price to settle below the ascending trendline. Without this, the uptrend remains intact regardless of the fundamental and macroeconomic background.
The fundamental and macroeconomic background is not particularly interesting to the market right now. On Friday, the ISM report exerted pressure on the dollar and Federal Reserve Chair Jerome Powell's speech did not particularly help either the bulls or the bears. And so, the dollar fell again for no substantial reason. However, it cannot fall forever. Therefore, we need to wait for signals of a change in the trend.
GBP/USD on 5M chart
Several signals were generated on the 5-minute chart, and since the movements were quite good, traders could make a good profit. The first buy signal near the level of 1.2653, which was removed from the charts at the end of the day, turned out to be a false signal, and we could not even set a Stop Loss for it. However, the next sell signal near the same level led to the execution of the level of 1.2620, so traders could earn 10 pips. The rebound from the level of 1.2620 should have been used to open long positions, and the price managed to exceed the levels of 1.2653 and 1.2688 by the end of the day. No sell signals were formed, so longs had to be manually closed in the evening. The profit was another 70 pips, making it possible for us to close the day with a good amount of profit.
Trading tips on Monday:
On the hourly chart, the GBP/USD pair continues an uptrend, and we still believe that it will end soon. Now we have two trendlines. Overcoming either of them will pave the way for the pair to fall further, which we are waiting for. At the same time, the uptrend persists, so the pound may continue to rise based on technical factors. We advise you to monitor the level of 1.2688. The price has already settled below it, so it has the potential to fall to 1.2620. We do not expect strong growth today in the complete absence of events and reports. The key levels on the 5M chart are 1.2270, 1.2310, 1.2372-1.2387, 1.2457-1.2488, 1.2544, 1.2605-1.2620, 1.2688, 1.2748, 1.2787-1.2791, 1.2848-1.2860. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. On Monday, there are no significant events lined up in either the United States or the United Kingdom. There is a high probability of a flat, a "boring Monday," and all the resulting consequences. It would be wise to stop trading at the first signs of a flat, as the chances of encountering false signals increases.
Basic trading rules:
1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.
2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.
3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.
4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, after which all open trades should be manually closed.
5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trendline or trend channel.
6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.
How to read charts:
Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.
Red lines represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.
The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.
Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.
Beginners should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.
