Trading plan for EUR/USD on August 21. Simple tips for beginners
August 21, 2023 4:22 am
Analyzing Monday’s trades:
EUR/USD on 30M chart
On Friday, EUR/USD extended the same sluggish downward movement. The euro started falling on Monday and continued to do so every day of the week. So how much has the single currency depreciated over the five trading days? By 78 points. In principle, we need a daily volatility of at least this value to expect good signals and good profits. If the pair shows volatility of around 100 points for the week, what else can we talk about?
Take note that the calendar of events was not completely empty. There were quite important reports in the European Union, and reports of medium importance in the US. However, the pair is showing us that it is ready to follow the “main plan,” which implies the euro’s fall, but it’s clearly not in a rush to do so. On Friday, the report on inflation in the EU for July in the second assessment, of course, had no effect on the pair’s movement. The downtrend prevails, but it is better to trade on the higher time frames where deals should be kept open for several days.
EUR/USD on 5M chart
There were two trading signals on the 5-minute chart. In the beginning, the pair spent three hours overcoming the 1.0871 level, afterwards it managed to go down by a “whole” 18 points. In the end, it overcame the same level upwards, but this time it couldn’t even go 18 points. In the first case, beginners could open a short position, which was successfully closed by a Stop Loss at breakeven. In the second case, it was not advisable to enter the market, as there were literally a couple of hours left before closing for the weekend. As a result, neither profit nor loss was made.
Trading tips on Monday:
On the 30M chart, the pair extends its downward movement, and in our opinion, this is still the most justified and logical course of events. We don’t see any macroeconomic background that would be capable of changing market sentiment to bullish in the near future. Last week, it didn’t even have any impact on market sentiment. The key levels on the 5M chart are 1.0733, 1.0761, 1.0835, 1.0871, 1.0901-1.0904, 1.0936, 1.0971-1.0981, 1.1011, 1.1043, 1.1091. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Monday, no important events or reports lined up in the European Union or the US. There will be nothing to react to. Most likely, we should brace ourselves for another low-volatility day.
Basic trading rules:
1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal.
2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored.
3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading.
4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually.
5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel.
6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.
How to read charts:
Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.
Red lines are channels or trend lines that display the current trend and show which direction is better to trade.
MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines.
Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, 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 should remember that every trade cannot be profitable. The development of a reliable 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
Analyzing Monday’s trades:
EUR/USD on 30M chart
On Friday, EUR/USD extended the same sluggish downward movement. The euro started falling on Monday and continued to do so every day of the week. So how much has the single currency depreciated over the five trading days? By 78 points. In principle, we need a daily volatility of at least this value to expect good signals and good profits. If the pair shows volatility of around 100 points for the week, what else can we talk about?
Take note that the calendar of events was not completely empty. There were quite important reports in the European Union, and reports of medium importance in the US. However, the pair is showing us that it is ready to follow the “main plan,” which implies the euro’s fall, but it’s clearly not in a rush to do so. On Friday, the report on inflation in the EU for July in the second assessment, of course, had no effect on the pair’s movement. The downtrend prevails, but it is better to trade on the higher time frames where deals should be kept open for several days.
EUR/USD on 5M chart
There were two trading signals on the 5-minute chart. In the beginning, the pair spent three hours overcoming the 1.0871 level, afterwards it managed to go down by a “whole” 18 points. In the end, it overcame the same level upwards, but this time it couldn’t even go 18 points. In the first case, beginners could open a short position, which was successfully closed by a Stop Loss at breakeven. In the second case, it was not advisable to enter the market, as there were literally a couple of hours left before closing for the weekend. As a result, neither profit nor loss was made.
Trading tips on Monday:
On the 30M chart, the pair extends its downward movement, and in our opinion, this is still the most justified and logical course of events. We don’t see any macroeconomic background that would be capable of changing market sentiment to bullish in the near future. Last week, it didn’t even have any impact on market sentiment. The key levels on the 5M chart are 1.0733, 1.0761, 1.0835, 1.0871, 1.0901-1.0904, 1.0936, 1.0971-1.0981, 1.1011, 1.1043, 1.1091. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Monday, no important events or reports lined up in the European Union or the US. There will be nothing to react to. Most likely, we should brace ourselves for another low-volatility day.
Basic trading rules:
1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal.
2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored.
3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading.
4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually.
5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel.
6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.
How to read charts:
Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.
Red lines are channels or trend lines that display the current trend and show which direction is better to trade.
MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines.
Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, 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 should remember that every trade cannot be profitable. The development of a reliable 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
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