Analysis of previous deals:
30M chart of the GBP/USD pair
The GBP/USD pair showed all three types of movements on the 30-minute timeframe that can only exist in the market on Wednesday. There was a systematic, slight decline in quotes in the first half of the day, and then there was a sharp increase in prices in the second half of the day, afterwards, an absolute flat began, which continues to this day. All this can be clearly seen in the chart above. Therefore, the pair not only changes the direction of its movement during the day, but even changes the nature of the movement itself several times, this is the most difficult thing that can happen. It is good that for several days now we have been recommending novice traders not to consider signals from the MACD indicator on the 30-minute timeframe. Since with all of the above, the pair also remains inside the horizontal channel, approximately between the levels of 1.4100 and 1.4119. So now there is a complete set for those "who do not want to trade".
5M chart of the GBP/USD pair
The pair moved in a very difficult manner on the 5-minute timeframe yesterday. A number of signals were generated, several lines worked out, while most of the signals were inaccurate. At the same time, not a single important macroeconomic event was included in the news calendar yesterday. Let's start with the signals. The first signal is not even circled, but an oval. Judge for yourself, dear traders, how to treat such signals. The pair was simply moving along the level of 1.4135 for several hours, consolidating below it, then above it. We believe that this is not a signal, and the level 1.4135 is no longer relevant. A buy signal was then generated in the form of a breakthrough of the same level of 1.4135, from bottom to top. This signal should have already been processed, since it was accurate. However, after it was formed, the quotes went up another 39 points. That is, in order for Take Profit to work on a long trade, 1 point was not enough. Of course, novice traders could also manually close the deal, for example, the price also settled near the 1.4165 level. In this case, you would have earned 32 points. In total, six signals were formed near the level, each of which did not bring any profit to traders. The signal to sell, which was formed for the second consecutive day, could still be worked out by novice traders. However, after the price settles above the level of 1.4165, all other signals should have been ignored. A short position brought novice traders a loss of 10 points. Nevertheless, this difficult day ended with a profit.
Trading tips for Thursday:
At this time, the upward trend for the pound/dollar pair has been canceled again on the 30-minute timeframe, as the price has overcome the upward trend line. In general, movement in the horizontal channel is clearly visible. So now we do not recommend that novice traders follow any signals from the MACD indicator, as there is still a high probability of the pair moving in a flat. The important levels on the 5 minute timeframe are 1.4091, 1.4111, 1.4165, 1.4191 and 1.4219. The price can bounce off them or overcome them. As before, we set Take Profit at a distance of 40-50 points. At the 5M TF, you can use all the nearest levels as targets, but then you need to take profit, taking into account the strength of the movement. When passing 20 points in the right direction, we recommend setting Stop Loss to breakeven. On Thursday in Great Britain, one of the important events is scheduled for the next speech by Andrew Bailey, Governor of the Bank of England. And in the US, a relatively important ADP report on changes in the number of employees in the private sector and the index of business activity in the ISM services sector will be released.
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 the channels or trend lines that display the current trend and show in which direction it is better to trade now.
Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.
The MACD indicator 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 lines (channels and trend lines).
Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.
Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.
The material has been provided by InstaForex Company - www.instaforex.com