Analysis of previous deals:
30M chart of the EUR/USD pair
The EUR/USD pair continued to trade very sluggish on Tuesday. If on Monday, it passed about 55 points from the low to the high of the day, then today it was no more than 40 points. Thus, we are once again forced to pay attention to the indicators of volatility and talk about the fact that they continue to remain extremely low. Recall that the normal volatility for the euro/dollar pair is 60-80 points per day. Now on average, the pair passes 40-45 points in a day. Therefore, it is still possible to work with it but it is very difficult: there could be some signals that were formed and a lot of false signals, or there are none generally. On Tuesday, on the 30-minute timeframe formally, one signal was formed to buy from the MACD indicator. And novice traders could work it out. However, much earlier a signal for a long position was also formed on the 5-minute timeframe, so the long should have been opened first on the lower TF, and you shouldn't have duplicated it on the higher one. Please also note that there were no reports in the European Union and the United States today.
5M chart of the EUR/USD pair
The picture of the pair's movements still looks dull on the 5-minute timeframe. It is clearly seen that the price not only traded with low volatility, but also without a definite direction of movement. The quotes generally stayed in one place during the European trading session, and there were literally a couple of movements at the US session, which, however, were also very weak. Nevertheless, several trading signals were formed today. The first buy signal - a rebound from the 1.1730 level - allowed novice traders to open long positions. However, the upward movement ended already near the level of 1.1756, from which the price immediately rebounded. At this moment, it was necessary to close long positions (profit = 10 points) and open short positions. The second sell signal turned out to be false, but the price crawled down 15 points with grief in half, which allowed beginners to set Stop Loss to breakeven. Therefore, when the price returned back to the level of 1.1756, this trade was closed at breakeven. In the future, there was no need to open new positions, although three more signals were formed near the level of 1.1756. By that time, it had already become obvious that volatility would again be very low, and there would be no trend movement.
Trading tips for Wednesday:
The EUR/USD pair continues to be above the downward trend line on the 30-minute timeframe, so buy signals should be considered tomorrow. However, we once again draw attention to the weak volatility, in which the MACD indicator can also generate false signals. Therefore, we recommend considering buy signals from the MACD indicator on Wednesday, when it falls to the zero level, but do it with the utmost caution. It is better to trade at the lowest timeframe now. On a 5-minute timeframe, it is recommended to trade from the levels of 1.1704, 1.1730, 1.1756 - 1.1765, 1.1802. Take Profit, as before, is set at a distance of 30-40 points. Stop Loss - to breakeven when the price passes in the right direction by 15 points. At the 5M TF, the target can be the nearest level if it is not too close or too far away. If located - then you should act according to the situation. The US will publish a report on orders for durable goods, and there is nothing interesting in the EU. The US report has theoretical chances to be reflected in the chart of the EUR/USD pair. But they are short.
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 (14,22,3) 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 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