Analysis of previous deals:
30M chart of the GBP/USD pair
After facing several days that were completely vague, the GBP/USD pair finally began to trade in a more "humane" manner on the 30-minute timeframe, as seen on the chart above. The pair's quotes were in a downward movement last Friday. Recall that, formally, there is no trend in the 30-minute timeframe at this time, since the price had previously left the rising channel. However, in our recent reviews, we still advise you to only consider buy signals from the MACD indicator, so we will not change these recommendations. And so, a buy signal did not appear last Friday. Therefore, novice traders should not have opened any deals on this timeframe. No important reports from the UK last Friday, so the decline in quotes, which started in the morning, certainly has nothing to do with macroeconomic statistics. The reports from the United States that were released in the afternoon were not the most significant. Traders could pay attention to the report on personal income and expenses of Americans, but even they did not cause any particular reaction.
5M chart of the GBP/USD pair
At least eight signals on the 5-minute timeframe were formed that could be worked out last Friday. They are all marked in the chart above. Let's try to figure them out. First of all, we recorded a sell signal, which was formed in the European session in the form of a rebound from the 1.3947 level. Here the pair should have been sold, but even if you didn't have time to do it, another sell signal was formed after 20 minutes - surpassing the 1.3928 level. Thus, novice players had to be in short positions until the very beginning of the US trading session. We would like to remind you that we recommend 40-50 points for Take Profit and their pair was quite easy and simple to trade on Friday. Thus, the very least that beginners could earn was already 40 points. If the players waited until the quote reached the nearest level of 1.3865, then they could have earned 67 points. Three signals formed around this level at once. The first one was false, since the price did not continue to rise after the rebound from the 1.3865 level, the second and the third are identical, since the price initially surpassed the 1.3865 level, and then rebounded off it. Therefore, beginners could lose around 25 points on the first signal, and gain at least 40 points of profit on the second or third, because the price again went down at least 40 points, and even reach both the closest levels of 1.3838 and 1, 3811. Moreover, there was a rebound from the 1.3811 level - a buy signal, which could have been earned only if the profit settled around 1.3838. And there was also a rebound from the 1.3838 level, which you could have earned if you manually take profit around 1.3811. But even if you didn't make anything on the latest signals, you still end up in big profits on Friday. The 1.3811 level is no longer relevant, instead the 1.3802 level.
How to trade on Monday:
On Monday, we recommend considering signals from the MACD indicator for both upward and downward movements. The problem is that there is no trend on the 30 minute timeframe right now. Therefore, it may even be better to do the opposite: do not consider either buy or sell signals. Better to trade on the 5 minute timeframe. 1.3725, 1.3773, 1.3802, 1.3838 and 1.3865 are the important levels on it. The price can bounce off them or surpass them. As before, we set Take Profit at a distance of 40-50 points. You can also use all the nearest levels as targets, but then you need to take the profit, taking into account the strength of the movement, so as not to close the deal too early. If the nearest level is too far away, and the volatility is low, then it is recommended to maintain the deal in manual mode, tracking changes in the market. When passing 20 points in the right direction, we recommend setting Stop Loss to breakeven. There will be no major events in the UK on Monday, only the ISM index in America.
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.