Trading plan for GBP/USD on August 14. Simple tips for beginners
August 14, 2023 11:20 am
Analyzing Friday’s trades:
GBP/USD on 30M chart
On Friday, the GBP/USD pair demonstrated one thing – an absolute flat trend. The pair moved purely sideways, and the entire movement was more reminiscent of a “swing”. Naturally, trading under such conditions was extremely inconvenient, and there was little hope for high profits. The macro data on Friday, rather than aiding traders, seemed to hinder them instead. In the morning, the UK released its Q2 GDP report (as well as industrial production), which turned out to be better than forecasts and the pound edged up. The US producer price index was released in the afternoon, which supported the dollar. Besides the intraday flat trend, there’s also a two-week sideways channel. Overall, it was not an ideal day to trade.
GBP/USD on 5M chart
Several trading signals were formed on the 5-minute chart. It makes no sense to enumerate all of them, as they were all similar, and some even turned out to be false entry points. Traders couldn’t execute the very first buy signal as the price was almost immediately near the target level. The next sell signal was around 1.2715 and the price couldn’t even hit the 1.2688 target (even though there was only a 27-point distance between them). The next buy signal was false. And afterwards, traders couldn’t even capitalize the next sell signal on time because the price immediately reached the 1.2688 target. The main point is that volatility was 62 points, and the pair was moving sideways. Profitable signals are known to be rare in such conditions.
Trading tips on Monday:
On the 30-minute chart, the GBP/USD pair broke the short-term downtrend but is now in a flat. 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 1.2499, 1.2538, 1.2597-1.2605, 1.2653, 1.2688, 1.2715, 1.2748, 1.2791-1.2801, 1.2848-1.2860, 1.2913. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. On Monday, there are no significant events or reports lined up in the UK or the US, so we should brace ourselves for another low-volatility day with no trends.
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 Friday’s trades:
GBP/USD on 30M chart
On Friday, the GBP/USD pair demonstrated one thing – an absolute flat trend. The pair moved purely sideways, and the entire movement was more reminiscent of a “swing”. Naturally, trading under such conditions was extremely inconvenient, and there was little hope for high profits. The macro data on Friday, rather than aiding traders, seemed to hinder them instead. In the morning, the UK released its Q2 GDP report (as well as industrial production), which turned out to be better than forecasts and the pound edged up. The US producer price index was released in the afternoon, which supported the dollar. Besides the intraday flat trend, there’s also a two-week sideways channel. Overall, it was not an ideal day to trade.
GBP/USD on 5M chart
Several trading signals were formed on the 5-minute chart. It makes no sense to enumerate all of them, as they were all similar, and some even turned out to be false entry points. Traders couldn’t execute the very first buy signal as the price was almost immediately near the target level. The next sell signal was around 1.2715 and the price couldn’t even hit the 1.2688 target (even though there was only a 27-point distance between them). The next buy signal was false. And afterwards, traders couldn’t even capitalize the next sell signal on time because the price immediately reached the 1.2688 target. The main point is that volatility was 62 points, and the pair was moving sideways. Profitable signals are known to be rare in such conditions.
Trading tips on Monday:
On the 30-minute chart, the GBP/USD pair broke the short-term downtrend but is now in a flat. 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 1.2499, 1.2538, 1.2597-1.2605, 1.2653, 1.2688, 1.2715, 1.2748, 1.2791-1.2801, 1.2848-1.2860, 1.2913. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. On Monday, there are no significant events or reports lined up in the UK or the US, so we should brace ourselves for another low-volatility day with no trends.
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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