How to trade GBP/USD on April 24. Simple trading tips and analysis for beginners
April 24, 2023 8:24 am
Analyzing Friday’s trades:
GBP/USD on 30M chart
On Friday, the GBP/USD pair also moved sideways, which we observed for most of the week. Perhaps it doesn’t look as eloquent as the euro, but it is still obvious that the price moves more sideways than up or down. Plus, it is important to remember that a lot of important information was published in the UK this week, so although the market was flat, it still tried to react to some reports. This is why the sharp bursts from side to side, which are visible in the chart above, are explained. As for Friday, the UK data turned out to be weaker than expected again. Retail sales were disappointing, and the manufacturing PMI fell even lower. Only the services PMI increased, but overall, the entire package of data was weak. The US PMIs were stronger than expected. All three of them. The market initially bought the dollar, which was logical on Friday. But half an hour later, the bullish sentiment stopped and short positions began, which were completely unfounded.
GBP/USD on 5M chart
The trading signals on the 5-minute chart were terrible. The pair constantly jumped up and down, crossing the level of 1.2396. But first, a sell signal was formed near 1.2444. It formed overnight, but by the time the European trading session opened, the pair had not gone far from the formation point, so a short could be opened. It didn’t bring much profit anyway because volatility was low again. But 25 points could be obtained, which is not too bad in a flat. Then a buy signal followed near 1.2396, which turned out to be false and caused traders a loss of the same 25 points. All subsequent signals around 1.2396 should be ignored, as the first two turned out to be false.
Trading tips on Monday:
On the 30-minute chart, the GBP/USD pair started a bearish correction, which may have already ended since the pair has been flat for four straight days. I believe that the pound should sharply fall by several hundred points, but the market still refuses to sell. The 1.2444 level may create significant resistance for bulls, but for now, the price simply moves along it. On the 5-minute chart, it is recommended to trade at the levels 1.2171-1.2179, 1.2245-1.2260, 1.2343-1.2360, 1.2396, 1.2444, 1.2477, 1.2520, 1.2577-1.2597-1.2616. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. On Monday, no important events are planned in the UK or the US, so volatility may remain low, and we probably won’t see a trend.
Basic rules of the trading system:
1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is.
2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored.
3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement.
4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually.
5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel.
6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels.
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 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, and 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 patterns (channels and trendlines).
Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations.
Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.
The material has been provided by InstaForex Company – www.instaforex.com
Analyzing Friday’s trades:
GBP/USD on 30M chart
On Friday, the GBP/USD pair also moved sideways, which we observed for most of the week. Perhaps it doesn’t look as eloquent as the euro, but it is still obvious that the price moves more sideways than up or down. Plus, it is important to remember that a lot of important information was published in the UK this week, so although the market was flat, it still tried to react to some reports. This is why the sharp bursts from side to side, which are visible in the chart above, are explained. As for Friday, the UK data turned out to be weaker than expected again. Retail sales were disappointing, and the manufacturing PMI fell even lower. Only the services PMI increased, but overall, the entire package of data was weak. The US PMIs were stronger than expected. All three of them. The market initially bought the dollar, which was logical on Friday. But half an hour later, the bullish sentiment stopped and short positions began, which were completely unfounded.
GBP/USD on 5M chart
The trading signals on the 5-minute chart were terrible. The pair constantly jumped up and down, crossing the level of 1.2396. But first, a sell signal was formed near 1.2444. It formed overnight, but by the time the European trading session opened, the pair had not gone far from the formation point, so a short could be opened. It didn’t bring much profit anyway because volatility was low again. But 25 points could be obtained, which is not too bad in a flat. Then a buy signal followed near 1.2396, which turned out to be false and caused traders a loss of the same 25 points. All subsequent signals around 1.2396 should be ignored, as the first two turned out to be false.
Trading tips on Monday:
On the 30-minute chart, the GBP/USD pair started a bearish correction, which may have already ended since the pair has been flat for four straight days. I believe that the pound should sharply fall by several hundred points, but the market still refuses to sell. The 1.2444 level may create significant resistance for bulls, but for now, the price simply moves along it. On the 5-minute chart, it is recommended to trade at the levels 1.2171-1.2179, 1.2245-1.2260, 1.2343-1.2360, 1.2396, 1.2444, 1.2477, 1.2520, 1.2577-1.2597-1.2616. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. On Monday, no important events are planned in the UK or the US, so volatility may remain low, and we probably won’t see a trend.
Basic rules of the trading system:
1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is.
2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored.
3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement.
4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually.
5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel.
6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels.
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 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, and 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 patterns (channels and trendlines).
Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations.
Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.
The material has been provided by InstaForex Company – www.instaforex.com
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