Trading plan for GBP/USD on June 8. Simple tips for beginners
June 8, 2023 4:22 am
Analyzing Wednesday’s trades:
GBP/USD on 30M chart
The GBP/USD pair continued to trade quite chaotically on Wednesday. Throughout the day, the pair managed to both rise and fall, but overall (as clearly seen on the 30-minute chart), it continued to move sideways. Despite breaking the downward trendline a week ago, the uptrend has not started yet. As a result, the market has paused and remained stagnant. In a week’s time, there will be the Federal Reserve meeting, followed by the announcement of results from the Bank of England and the European Central Bank in another week. However, this week lacks significant fundamental and macroeconomic factors. Traders have nothing to react to, and for several days now, we have been observing directionless movements. Volatility remains relatively low. Occasionally, there are more or less volatile days, but the sideways movement persists. It is not always profitable to trade in such conditions.
GBP/USD on 5M chart
There were two trading signals on the 5-minute chart. Initially, the pair broke the level of 1.2445 from bottom to top, and then from top to bottom. However, the target level was not reached in either case. Two levels (1.2445 and 1.2507) were removed, and two levels (1.2457 and 1.2499) were added. Beginners could have made a profit from a long position only if they closed it manually, without waiting for the level of 1.2507 to be reached. The sell signal could have earned only a few pips as it formed quite late in the day, and the trade had to be closed in any price position by the evening. It was not the best day, despite the relatively volatile movements.
Trading tips on Thursday:
As seen on the 30M chart, the GBP/USD pair has ended its downtrend and started a new uptrend in the short-term. However, in reality, we haven’t observed any significant upward movement yet. We believe that the pound has not fallen enough to form a new strong uptrend, so we’re waiting for its decline. However, there will be relatively little important data this week, so we also recommend paying attention to higher charts. The key levels on the 5M chart are 1.2171-1.2179, 1.2245, 1.2307, 1.2372, 1.2457, 1.2499, 1.2538, 1.2597-1.2616, 1.2659, 1.2697. When the price moves 20 pips in the right direction after opening a trade, a stop loss can be set at breakeven. There is nothing scheduled in the UK on Thursday, not even minor reports. In the US, there will be unemployment claims, which have minimal impact and rarely surprise traders. Volatility may decrease again.
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 continued to trade quite chaotically on Wednesday. Throughout the day, the pair managed to both rise and fall, but overall (as clearly seen on the 30-minute chart), it continued to move sideways. Despite breaking the downward trendline a week ago, the uptrend has not started yet. As a result, the market has paused and remained stagnant. In a week’s time, there will be the Federal Reserve meeting, followed by the announcement of results from the Bank of England and the European Central Bank in another week. However, this week lacks significant fundamental and macroeconomic factors. Traders have nothing to react to, and for several days now, we have been observing directionless movements. Volatility remains relatively low. Occasionally, there are more or less volatile days, but the sideways movement persists. It is not always profitable to trade in such conditions.
GBP/USD on 5M chart
There were two trading signals on the 5-minute chart. Initially, the pair broke the level of 1.2445 from bottom to top, and then from top to bottom. However, the target level was not reached in either case. Two levels (1.2445 and 1.2507) were removed, and two levels (1.2457 and 1.2499) were added. Beginners could have made a profit from a long position only if they closed it manually, without waiting for the level of 1.2507 to be reached. The sell signal could have earned only a few pips as it formed quite late in the day, and the trade had to be closed in any price position by the evening. It was not the best day, despite the relatively volatile movements.
Trading tips on Thursday:
As seen on the 30M chart, the GBP/USD pair has ended its downtrend and started a new uptrend in the short-term. However, in reality, we haven’t observed any significant upward movement yet. We believe that the pound has not fallen enough to form a new strong uptrend, so we’re waiting for its decline. However, there will be relatively little important data this week, so we also recommend paying attention to higher charts. The key levels on the 5M chart are 1.2171-1.2179, 1.2245, 1.2307, 1.2372, 1.2457, 1.2499, 1.2538, 1.2597-1.2616, 1.2659, 1.2697. When the price moves 20 pips in the right direction after opening a trade, a stop loss can be set at breakeven. There is nothing scheduled in the UK on Thursday, not even minor reports. In the US, there will be unemployment claims, which have minimal impact and rarely surprise traders. Volatility may decrease again.
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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