Analysis of Thursday's deals:
30M chart of the EUR/USD pair
The EUR/USD currency pair showed a zigzag movement on Thursday. At first, the pair actively fell, then actively grew. The total volatility of the day was about 125 points, which is a high value for the euro. Therefore, it is absolutely impossible to say that the pair stood in one place. And there was only one reversal during the day, which somewhat facilitated the task for traders. But the main problem remained the same - a small number of levels around which signals can be formed. There was only one report that newbies could turn their attention to, and that was the GDP report. But since this was already the third estimate for the second quarter, it was hardly worth expecting a strong market reaction and a serious deviation of the actual value from the forecast. As a result, the fall of the American economy amounted to 0.6%, as predicted. After that, the US dollar rose (!!!) literally by 40 points, but this can be considered a coincidence. There were no other important events during the day. The pair consolidated on Wednesday night (already after writing the last review) above the descending channel, so the trend formally changed to an upward one. However, we still believe that the euro may resume its global decline and renew its 20-year lows more than once this year.
5M chart of the EUR/USD pair
Several trading signals were formed on the 5-minute timeframe on Thursday, but each of them could not bring good profit to traders. We should start with the fact that traders missed the beginning of the downward movement due to the fact that it began at night, and the beginning of the upward movement - due to the lack of signals. Therefore, the first buy signal was formed only when the level of 0.9709 was overcome, which became irrelevant by the end of the day. But Wednesday night, the level of 0.9748, which is that day's high, should have appeared. The distance between these levels was about 40 points, so these levels should not be considered as an area. All signals were recognized as correct, but the profit for each of them hardly exceeded 10-15 points. Nevertheless, even this state of affairs brought at least 30 points of profit to novice players.
How to trade on Friday:
The downward trend has reversed on the 30-minute timeframe, so the euro may show moderate growth for some time. If important events were planned in the coming days, the euro could count on support. But there are no events, so the market will trade on bare "technique". However, this does not mean that the upward movement cannot continue. This means that we will have to rely only on the technical factor when making decisions. On the 5-minute TF on Friday it is recommended to trade at the levels of 0.9554, 0.9636 0.9748, 0.9813, 0.9877, 0.9910, 0.9952. When passing 15 points in the right direction, you should set Stop Loss to breakeven. The European Union will publish a report on inflation for September. We said above that there will be no important statistics. This is partly true, since the latest reports on European inflation were, in fact, ignored. The reaction to this report may follow, but is unlikely to be strong. The figure itself is likely to continue to grow.
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.