Trading plan for GBP/USD on August 10. Simple tips for beginners
August 10, 2023 3:24 am
Analyzing Wednesday’s trades:
GBP/USD on 30M chart
The GBP/USD pair has also been trading in a sideways channel for about a week. The pound shows more volatile movements than the euro, but it isn’t easy to profit from this. This week, there hasn’t been a single significant event in the UK, and there are no economic reports either. The same situation applies to the US. Thursday will bring the first important report – the US inflation data, followed by the UK’s GDP in the second quarter on Friday. Therefore, we are expecting a more active conclusion to this week.
In general, trading has taken place between the levels of 1.2688 and 1.2801. Two reports at the end of the week have the potential to take the pair out of this channel, but only if their values significantly differ from the forecasts. Undoubtedly, there’s a possibility that the market will react even without deviations, but it’s quite low.
GBP/USD on 5M chart
Several trading signals were formed on the 5-minute chart, and volatility was 70 pips, which is a bit low for the British pound, but at least it was possible to trade with such movement. Initially, the pair crossed the level of 1.2748 and managed to move up by 23 pips, allowing beginners to set a Stop Loss at breakeven, at which point the trade closed. Afterwards, it settled below the level of 1.2748 and fell by 25 pips. The result was the same. Another rebound from the level of 1.2748 during the US session – and again a movement of 25 pips. This time, beginners could have made a profit if they had opened a short position, as the first two signals turned out to be false.
Trading tips on Thursday:
On the 30-minute chart, the GBP/USD pair broke the short-term downtrend. Now, the pound may continue its corrective phase, but we shouldn’t expect a strong uptrend. We insist that the pound fall, as we still believe it is overbought and unreasonably expensive. The key levels on the 5M chart are 1.2538, 1.2597-1.2605, 1.2653, 1.2688, 1.2715, 1.2748, 1.2791-1.2801, 1.2848-1.2860, 1.2913, 1.2981-1.2993, 1.3043. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. On Thursday, there are no significant events or reports lined up in the UK, but volatility could rise due to the US inflation report.
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 Wednesday’s trades:
GBP/USD on 30M chart
The GBP/USD pair has also been trading in a sideways channel for about a week. The pound shows more volatile movements than the euro, but it isn’t easy to profit from this. This week, there hasn’t been a single significant event in the UK, and there are no economic reports either. The same situation applies to the US. Thursday will bring the first important report – the US inflation data, followed by the UK’s GDP in the second quarter on Friday. Therefore, we are expecting a more active conclusion to this week.
In general, trading has taken place between the levels of 1.2688 and 1.2801. Two reports at the end of the week have the potential to take the pair out of this channel, but only if their values significantly differ from the forecasts. Undoubtedly, there’s a possibility that the market will react even without deviations, but it’s quite low.
GBP/USD on 5M chart
Several trading signals were formed on the 5-minute chart, and volatility was 70 pips, which is a bit low for the British pound, but at least it was possible to trade with such movement. Initially, the pair crossed the level of 1.2748 and managed to move up by 23 pips, allowing beginners to set a Stop Loss at breakeven, at which point the trade closed. Afterwards, it settled below the level of 1.2748 and fell by 25 pips. The result was the same. Another rebound from the level of 1.2748 during the US session – and again a movement of 25 pips. This time, beginners could have made a profit if they had opened a short position, as the first two signals turned out to be false.
Trading tips on Thursday:
On the 30-minute chart, the GBP/USD pair broke the short-term downtrend. Now, the pound may continue its corrective phase, but we shouldn’t expect a strong uptrend. We insist that the pound fall, as we still believe it is overbought and unreasonably expensive. The key levels on the 5M chart are 1.2538, 1.2597-1.2605, 1.2653, 1.2688, 1.2715, 1.2748, 1.2791-1.2801, 1.2848-1.2860, 1.2913, 1.2981-1.2993, 1.3043. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. On Thursday, there are no significant events or reports lined up in the UK, but volatility could rise due to the US inflation report.
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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