Trading plan for EUR/USD on September 6. Simple tips for beginners
September 6, 2023 4:22 am
Analyzing Tuesday’s trades:
EUR/USD on 30M chart
On Tuesday, EUR/USD traded with considerably more volatility. However, the reasons were quite unclear as there were no influential events. Let’s take a deep dive into it. In the morning, European Central Bank President Christine Lagarde spoke for the second time, but it ended with the same outcome as Monday’s. PMIs for Germany and the EU (final assessments) were released, but they certainly didn’t exert downward pressure on the euro. The EU Producer Price Index also didn’t have an impact. It seems that only Lagarde’s speech could have caused the drop. So, what did she say?
It’s better to look into what Lagarde didn’t announce. She did not announce that the ECB will continue to raise rates in September and this autumn. Since the market expects further tightening of monetary policy and is ready to buy the euro only on this condition, the failure to meet this expectation weighed on the euro. We believe that this is the most logical explanation.
EUR/USD on 5M chart
Once again we saw quite erratic movements on the 5-minute chart. The first sell signal around the 1.0767-1.0781 area was decent. The price dropped to the level of 1.0733 and even surpassed it, but within half an hour, it settled back above it, indicating a buy signal. Therefore, the profit from shorts was only 10 pips. The buy signal turned out to be false, and the next sell signal was also unsuccessful. In both cases, the pair couldn’t even move 15 pips in the right direction. So, beginners incurred losses on both trades. Unfortunately, this happens too.
Trading tips on Wednesday:
The pair’s movements on the 30M chart have been quite erratic in recent weeks. Since the pair surpassed the 1.0767-1.0781 area, and the descending trendline remains relevant, the downward movement has probably resumed. We support the downtrend in the medium term regardless of any macroeconomic or fundamental background. The key levels on the 5M chart are 1.0517-1.0533, 1.0607-1.0613, 1.0673, 1.0733, 1.0767-1.0781, 1.0835, 1.0871, 1.0901-1.0904, 1.0936, 1.0971-1.0981. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Wednesday, the EU will release its retail sales report, and in the US, we can look forward to PMIs in the services sectors according to S&P and ISM versions. Pay attention to the ISM index as it is objectively the main item this week.
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 Tuesday’s trades:
EUR/USD on 30M chart
On Tuesday, EUR/USD traded with considerably more volatility. However, the reasons were quite unclear as there were no influential events. Let’s take a deep dive into it. In the morning, European Central Bank President Christine Lagarde spoke for the second time, but it ended with the same outcome as Monday’s. PMIs for Germany and the EU (final assessments) were released, but they certainly didn’t exert downward pressure on the euro. The EU Producer Price Index also didn’t have an impact. It seems that only Lagarde’s speech could have caused the drop. So, what did she say?
It’s better to look into what Lagarde didn’t announce. She did not announce that the ECB will continue to raise rates in September and this autumn. Since the market expects further tightening of monetary policy and is ready to buy the euro only on this condition, the failure to meet this expectation weighed on the euro. We believe that this is the most logical explanation.
EUR/USD on 5M chart
Once again we saw quite erratic movements on the 5-minute chart. The first sell signal around the 1.0767-1.0781 area was decent. The price dropped to the level of 1.0733 and even surpassed it, but within half an hour, it settled back above it, indicating a buy signal. Therefore, the profit from shorts was only 10 pips. The buy signal turned out to be false, and the next sell signal was also unsuccessful. In both cases, the pair couldn’t even move 15 pips in the right direction. So, beginners incurred losses on both trades. Unfortunately, this happens too.
Trading tips on Wednesday:
The pair’s movements on the 30M chart have been quite erratic in recent weeks. Since the pair surpassed the 1.0767-1.0781 area, and the descending trendline remains relevant, the downward movement has probably resumed. We support the downtrend in the medium term regardless of any macroeconomic or fundamental background. The key levels on the 5M chart are 1.0517-1.0533, 1.0607-1.0613, 1.0673, 1.0733, 1.0767-1.0781, 1.0835, 1.0871, 1.0901-1.0904, 1.0936, 1.0971-1.0981. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Wednesday, the EU will release its retail sales report, and in the US, we can look forward to PMIs in the services sectors according to S&P and ISM versions. Pay attention to the ISM index as it is objectively the main item this week.
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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