Trading plan for EUR/USD on October 24: analysis and simple tips for beginners
October 23, 2023 10:23 pm
Analysis of Monday trades:
EUR/USD 1H chart
The EUR/USD currency pair experienced a sharp and unexpected surge during Monday’s trading session. There were no significant events or economic releases scheduled for the first trading day of the week. Mondays are often characterized by lower volatility and a lack of clear trend movements, making them somewhat akin to “semi-holiday” trading days. However, exceptions to this norm do exist, and today was one such exception. The euro strengthened significantly without apparent immediate catalysts, although this move appeared logically and fundamentally justified. We have previously discussed the possibility of a second leg of correction, especially given the weakness of the initial correction phase. At this juncture, our forecast has been realized with 100% accuracy. The key question now is the strength and sustainability of this upward correction. Our analysis suggests that this upward move may conclude in the near future, leading to a resumption of the prevailing downward trend. Nevertheless, there are currently no clear signals indicating the imminent completion of this correction phase.
EUR/USD 5M chart
On the 5-minute timeframe chart on Monday, several trading signals were generated. However, despite the strong movement of the currency pair, these signals were far from being the best. The first two sell signals in the range of 1.0613-1.0618 turned out to be false signals and essentially duplicated each other. Therefore, a short position should have been opened only once, and novice traders incurred a loss of about 20 pips on it. Subsequently, a buy signal was formed in the same range, which turned out to be correct, and the price later rose to the level of 1.0673, where profit should have been taken. This profit amounted to about 50 pips and covered the loss from the first trade. However, despite the overall profit, today’s trading day cannot be considered highly successful. The movement was strong, and it presented the opportunity to earn much more.
Trading ideas for Tuesday:
On the hourly timeframe, the pair continues its upward movement, which may be abrupt and unstable, representing a correction. We have repeatedly mentioned our expectation of a decline in the euro currency in the medium term, so the current sideways movement does not surprise us. It can end at any moment. On the 5-minute timeframe, tomorrow, you should consider levels at 1.0391, 1.0433, 1.0451, 1.0483, 1.0533, 1.0559, 1.0611-1.0618, 1.0673, 1.0733, 1.0767-1.0781, 1.0835. When a trade moves 15 pips in the right direction, you can set your Stop Loss to breakeven. On Tuesday in the European Union, business activity indexes in the services and manufacturing sectors for October will be published, along with a speech by Christine Lagarde. In the United States, business activity indexes will also be released. These events could impact the pair’s movement.
Basic rules of a trading system:
1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.
2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.
3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.
4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, post which all open trades should be manually closed.
5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trend line or trend channel.
6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.
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 represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.
The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.
Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.
Beginning traders should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.
The material has been provided by InstaForex Company – www.instaforex.com
Analysis of Monday trades:
EUR/USD 1H chart
The EUR/USD currency pair experienced a sharp and unexpected surge during Monday’s trading session. There were no significant events or economic releases scheduled for the first trading day of the week. Mondays are often characterized by lower volatility and a lack of clear trend movements, making them somewhat akin to “semi-holiday” trading days. However, exceptions to this norm do exist, and today was one such exception. The euro strengthened significantly without apparent immediate catalysts, although this move appeared logically and fundamentally justified. We have previously discussed the possibility of a second leg of correction, especially given the weakness of the initial correction phase. At this juncture, our forecast has been realized with 100% accuracy. The key question now is the strength and sustainability of this upward correction. Our analysis suggests that this upward move may conclude in the near future, leading to a resumption of the prevailing downward trend. Nevertheless, there are currently no clear signals indicating the imminent completion of this correction phase.
EUR/USD 5M chart
On the 5-minute timeframe chart on Monday, several trading signals were generated. However, despite the strong movement of the currency pair, these signals were far from being the best. The first two sell signals in the range of 1.0613-1.0618 turned out to be false signals and essentially duplicated each other. Therefore, a short position should have been opened only once, and novice traders incurred a loss of about 20 pips on it. Subsequently, a buy signal was formed in the same range, which turned out to be correct, and the price later rose to the level of 1.0673, where profit should have been taken. This profit amounted to about 50 pips and covered the loss from the first trade. However, despite the overall profit, today’s trading day cannot be considered highly successful. The movement was strong, and it presented the opportunity to earn much more.
Trading ideas for Tuesday:
On the hourly timeframe, the pair continues its upward movement, which may be abrupt and unstable, representing a correction. We have repeatedly mentioned our expectation of a decline in the euro currency in the medium term, so the current sideways movement does not surprise us. It can end at any moment. On the 5-minute timeframe, tomorrow, you should consider levels at 1.0391, 1.0433, 1.0451, 1.0483, 1.0533, 1.0559, 1.0611-1.0618, 1.0673, 1.0733, 1.0767-1.0781, 1.0835. When a trade moves 15 pips in the right direction, you can set your Stop Loss to breakeven. On Tuesday in the European Union, business activity indexes in the services and manufacturing sectors for October will be published, along with a speech by Christine Lagarde. In the United States, business activity indexes will also be released. These events could impact the pair’s movement.
Basic rules of a trading system:
1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.
2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.
3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.
4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, post which all open trades should be manually closed.
5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trend line or trend channel.
6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.
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 represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.
The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.
Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.
Beginning traders should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: