FX.co ★ What to Pay Attention to on October 21? Analysis of Fundamental Events for Beginners

Macroeconomic Report Analysis:

No macroeconomic events are scheduled for Monday, so the market will have little to focus on. We are most likely in for a quiet day with minimal price changes. Again, this is a good opportunity for both pairs to correct, but at the moment, neither has managed to break through its trendline.

Fundamental Event Analysis:

Among the fundamental events on Monday are speeches by Federal Reserve representatives Lorie Logan and Neel Kashkari. However, what can we expect from the representatives of the U.S. central bank if no new economic data has been released to the market or the Fed recently? We believe that the FOMC officials will not provide any significant insights to the market, similar to their colleagues on Friday. They will speak late in the evening, and no exciting events or reports are planned during the day.

General Conclusions:

During the first trading day of the new week, the euro and the pound have the potential to resume their declines. If both currency pairs bounce off their trendlines, a renewed decline will likely occur. However, volatility is expected to remain low, and the movement may resemble a flat market. Remember that in a flat market, most signals tend to be false. Therefore, even breaking through trendlines cannot be considered a guarantee of further growth.

Basic Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form (bounce or break through a level). The less time it takes, the stronger the signal.
2. If two or more trades were opened with false signals around a certain level, all subsequent signals from that level should be ignored.
3. In a flat market, any pair can generate many false signals or none at all. In any case, it's better to stop trading at the first signs of a flat market.
4. Trading should be done between the start of the European session and the middle of the American session, after which all trades should be closed manually.
5. On the hourly time frame, trade signals from the MACD indicator are best used when there is good volatility and a trend confirmed by a trendline or channel.
6. If two levels are too close to each other (5 to 20 pips apart), consider them as a support or resistance zone.
7. When the price moves 15-20 pips in the intended direction, set a Stop Loss to break even.

What's on the Charts:

Support and Resistance Price Levels: These levels serve as targets when opening buy or sell positions. They can also be used as points to set Take Profit levels.

Red Lines: These represent channels or trend lines that display the current trend and indicate the preferred trading direction.

MACD Indicator (14,22,3): The histogram and signal line serve as a supplementary indicator that can also be used as a source of trading signals.

Important Speeches and Reports (always found in the news calendar) can significantly impact the movement of a currency pair. Therefore, trading should be done with maximum caution during their release, or you may choose to exit the market to avoid a sharp price reversal against the preceding movement.

For Beginners Trading on the Forex Market: It's essential to remember that not every trade will be profitable. Developing a clear strategy and practicing money management is key to achieving long-term success in trading.