Trading plan for GBP/USD on July 21. Simple tips for beginners
July 21, 2023 3:23 am
Analyzing Thursday’s trades:
GBP/USD on 30M chart
The GBP/USD pair retreated on Thursday. The pair has faced negative pressure for four days, which is somewhat unusual considering that the pound has been mostly rising over the past six months. However, given the current overbought conditions and the fact that bullish factors have already been played out, this downward movement is not surprising.
The new downtrend line may not be very strong, but it still illustrates the current market conditions. The pound is expected to fall regardless of the fundamental background, just as it has persistently risen before.
GBP/USD on 5M chart
The trading signals on the 5-minute chart were not the best. The first buy signal turned out to be false when the price bounced off the level at 1.2913. The upward movement did not exceed 20 pips, making it difficult to set a stop-loss for the trade. Later on, the pair breached the 1.2913 level, and it fell to the target level at 1.2860 and rebounded, which could have been considered as a buy signal. However, given that the pair has already sharply fallen by 100 pips from the day’s high, it was unlikely that it could fall even further by 50 pips without any significant macroeconomic factors. Moreover, there was a significant resistance area at 1.2860-1.2848. Overall, there were only a few pips of profit to be made, unfortunately.
Trading tips on Friday:
On the 30-minute chart, the GBP/USD pair finally experienced a sharp decline. We believe that the pound should continue its downward movement, possibly pause at some instances. The pound is still heavily overbought and has no grounds for further growth. The key levels on the 5M chart are 1.2688, 1.2748, 1.2801, 1.2848-1.2860, 1.2913, 1.2981-1.2993, 1.3043, 1.3107, 1.3145. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. The UK will release its retail sales report for June, which may not be crucial, and also the market is already geared towards selling, so this report is unlikely to push the pair back to an uptrend. Meanwhile, there are no significant reports lined up for the US.
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 Thursday’s trades:
GBP/USD on 30M chart
The GBP/USD pair retreated on Thursday. The pair has faced negative pressure for four days, which is somewhat unusual considering that the pound has been mostly rising over the past six months. However, given the current overbought conditions and the fact that bullish factors have already been played out, this downward movement is not surprising.
The new downtrend line may not be very strong, but it still illustrates the current market conditions. The pound is expected to fall regardless of the fundamental background, just as it has persistently risen before.
GBP/USD on 5M chart
The trading signals on the 5-minute chart were not the best. The first buy signal turned out to be false when the price bounced off the level at 1.2913. The upward movement did not exceed 20 pips, making it difficult to set a stop-loss for the trade. Later on, the pair breached the 1.2913 level, and it fell to the target level at 1.2860 and rebounded, which could have been considered as a buy signal. However, given that the pair has already sharply fallen by 100 pips from the day’s high, it was unlikely that it could fall even further by 50 pips without any significant macroeconomic factors. Moreover, there was a significant resistance area at 1.2860-1.2848. Overall, there were only a few pips of profit to be made, unfortunately.
Trading tips on Friday:
On the 30-minute chart, the GBP/USD pair finally experienced a sharp decline. We believe that the pound should continue its downward movement, possibly pause at some instances. The pound is still heavily overbought and has no grounds for further growth. The key levels on the 5M chart are 1.2688, 1.2748, 1.2801, 1.2848-1.2860, 1.2913, 1.2981-1.2993, 1.3043, 1.3107, 1.3145. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. The UK will release its retail sales report for June, which may not be crucial, and also the market is already geared towards selling, so this report is unlikely to push the pair back to an uptrend. Meanwhile, there are no significant reports lined up for the US.
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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