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FX.co ★ How to trade GBP/USD on August 12? Simple tips for beginners.

How to trade GBP/USD on August 12? Simple tips for beginners.

Analysis of Thursday's deals:

300M chart of the GBP/USD pair

How to trade GBP/USD on August 12? Simple tips for beginners.

The GBP/USD pair, after showing impressive growth a day earlier, also tried to continue it on Thursday. But the pound failed to even reach the level of 1.2260, which it hit on Wednesday. Thus, as with the euro/dollar pair, further upward movement is far from obvious. In fairness, it should be noted that there were neither important macroeconomic statistics, nor a "foundation" that could force traders to trade a little more actively and continue to push the pair up. But the most important report on GDP for the second quarter will be released in the UK on Friday, and now it can provoke both further growth of the British currency and its powerful fall. However, let's not get ahead of ourselves. So far, it should be said that there is a formal upward trend in the pound, since a couple of days ago the quotes settled above the descending channel. There are not enough reasons to build an upward trend line now, plus I would not want to do this less than a day before the release of important statistics, after which the pair may collapse. After all, forecasts say that the British economy will shrink in the second quarter. And the second quarter will be the starting point for a recession that will last five quarters, according to the forecasts of Bank of England Governor Andrew Bailey...

5M chart of the GBP/USD pair

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How to trade GBP/USD on August 12? Simple tips for beginners.

The pound/dollar pair moved in absolute flat on the 5-minute timeframe. All day it was between the levels of 1.2186 and 1.2245, alternately rebounding from the first, then from the second. Levels 1.2186 and 1.2205 should be considered as a support area. As a result, the first signal to buy was formed during the European trading session, when the price bounced off this area. Subsequently, it rose to the level of 1.2245 and then built a "fence". In order not to describe all the signals (they were completely the same type), let's say this: each rebound should have been processed by the corresponding signal and each open transaction brought about 15 points of profit. There were four deals in total, so novice players could earn 60 points of profit. Given that the total volatility of the day was 68 points, this is an excellent result!

How to trade on Friday:

The pound/dollar pair skyrocketed to the 1.2260 level on the 30-minute time frame, but now it needs to break this level to confirm its intentions to form a new upward trend. It is easy to show a strong movement on one report, but is the market ready to continue buying the pound? Especially with a weak UK GDP report looming on the horizon? On the 5-minute TF on Friday, it is recommended to trade at the levels of 1.2106, 1.2186-1.2205, 1.2245-1.2260, 1.2329-1.2337. When the price passes after opening a deal in the right direction for 20 points, Stop Loss should be set to breakeven. The UK is set to publish reports on GDP (there will be several of them) and on industrial production on Friday, and in the US - only the consumer sentiment index from the University of Michigan. The most important report will be GDP in quarterly terms. It should show a reduction of 0.2%, and the lower it actually is, the more the pound can fall.

Basic rules of the trading system:

1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal.

2) If two or more deals were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored.

3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading.

4) Trade deals are opened in the time period between the beginning of the European session and until the middle of the US one, when all deals must be closed manually.

5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance.

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.

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 speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.

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 market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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