Trading plan for GBP/USD on October 19. Simple tips for beginners
October 19, 2023 10:23 am
Analyzing Wednesday’s trades:
GBP/USD on 30M chart
After breaking the ascending trendline, GBPUSD retreated further at the end of Wednesday. It has yet to breach the crucial support level at 1.2107, and if it stays above this mark, a new corrective phase may begin. Honestly, we still expect this scenario to unfold, but the pair’s movements have been quite chaotic. There are many contradictions, but at least the pound has the 1.2107 level, which has previously acted as support at least three times. This mark will determine whether the downtrend continues or if a new corrective phase begins.
Yesterday, the UK released its key inflation report. The Consumer Price Index remained unchanged, while the core inflation rate decreased by 0.1% to 6.1%. This was a mild slowdown and the British currency depreciated. You could say it’s based on this report, but that’s not entirely accurate because the pound initially grew after the report, albeit softly.
GBP/USD on 5M chart
There was an abundance of trading signals on the 5-minute chart, and they turned out to be false signals, which is not surprising given the nature of recent movements. The pair rebounded from the level of 1.2179 three times, but the price didn’t even rise by more than 20 pips. However, it’s a good thing that there were at least 20 pips, so the trades were closed at breakeven thanks to Stop Loss. Next came two sell signals in the 1.2164-1.2179 range, afterwards the price also managed to fall by 20-25 pips. Thus, there was no loss incurred.
Trading tips on Thursday:
On the 30-minute chart, GBP/USD might revert to its medium-term downtrend. However, a new phase of the upward correction may also start. Today, you can use the level of 1.2107 as a reference point. The current scenario presents ambiguity; however, we are inclined towards the continuation of the upward correction. The key levels on the 5M chart are 1.1992-1.2010, 1.2052, 1.2107, 1.2164-1.2179, 1.2235, 1.2270, 1.2372-1.2394, 1.2457-1.2488, 1.2544, 1.2605-1.2620, 1.2653, 1.2688. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. On Thursday, the UK event calendar is empty. From the U.S., we can look forward to Federal Reserve Chairman Jerome Powell’s speech and two secondary reports. We believe that most of today’s movement will be driven by technical factors rather than fundamental or economic factors, and at the same time, the movements could be very erratic.
Basic trading rules:
1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.
2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.
3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.
4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, post which all open trades should be manually closed.
5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trend line or trend channel.
6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.
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 represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.
The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.
Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.
Beginners should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.
The material has been provided by InstaForex Company – www.instaforex.com
Analyzing Wednesday’s trades:
GBP/USD on 30M chart
After breaking the ascending trendline, GBPUSD retreated further at the end of Wednesday. It has yet to breach the crucial support level at 1.2107, and if it stays above this mark, a new corrective phase may begin. Honestly, we still expect this scenario to unfold, but the pair’s movements have been quite chaotic. There are many contradictions, but at least the pound has the 1.2107 level, which has previously acted as support at least three times. This mark will determine whether the downtrend continues or if a new corrective phase begins.
Yesterday, the UK released its key inflation report. The Consumer Price Index remained unchanged, while the core inflation rate decreased by 0.1% to 6.1%. This was a mild slowdown and the British currency depreciated. You could say it’s based on this report, but that’s not entirely accurate because the pound initially grew after the report, albeit softly.
GBP/USD on 5M chart
There was an abundance of trading signals on the 5-minute chart, and they turned out to be false signals, which is not surprising given the nature of recent movements. The pair rebounded from the level of 1.2179 three times, but the price didn’t even rise by more than 20 pips. However, it’s a good thing that there were at least 20 pips, so the trades were closed at breakeven thanks to Stop Loss. Next came two sell signals in the 1.2164-1.2179 range, afterwards the price also managed to fall by 20-25 pips. Thus, there was no loss incurred.
Trading tips on Thursday:
On the 30-minute chart, GBP/USD might revert to its medium-term downtrend. However, a new phase of the upward correction may also start. Today, you can use the level of 1.2107 as a reference point. The current scenario presents ambiguity; however, we are inclined towards the continuation of the upward correction. The key levels on the 5M chart are 1.1992-1.2010, 1.2052, 1.2107, 1.2164-1.2179, 1.2235, 1.2270, 1.2372-1.2394, 1.2457-1.2488, 1.2544, 1.2605-1.2620, 1.2653, 1.2688. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. On Thursday, the UK event calendar is empty. From the U.S., we can look forward to Federal Reserve Chairman Jerome Powell’s speech and two secondary reports. We believe that most of today’s movement will be driven by technical factors rather than fundamental or economic factors, and at the same time, the movements could be very erratic.
Basic trading rules:
1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.
2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.
3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.
4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, post which all open trades should be manually closed.
5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trend line or trend channel.
6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.
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 represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.
The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.
Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.
Beginners should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.
The material has been provided by InstaForex Company – www.instaforex.com
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