Analysis of previous deals:
30M chart of the GBP/USD pair
The GBP/USD pair moved approximately the same as the EUR/USD pair on Monday. And this is very strange, since the European currency has been growing for most of the day, but it fell by 30 points after the eurozone GDP report was released. And exactly the same movement was observed at the same time for the pound, although the EU GDP report had nothing to do with it. And there were no macroeconomic publications in the UK on Monday. But, nevertheless, both pairs showed approximately the same movements. The pound/dollar pair also adjusted against the downward trend that has been observed for more than two weeks. The downward trend line is still far away, so the pound has a lot to grow. The greatest interest this week is the Bank of England meeting, which can greatly affect the pound/ dollar pair. But it will take place only on Thursday, and until that time, the price may continue to adjust under the trend line. It's pretty hard to predict what will happen on Thursday right now. So far, the further fall of the pair has been put on pause, since the bears failed to overcome the level of 1.3374.
5M chart of the GBP/USD pair
On the 5-minute timeframe, the movement of the pound/dollar pair on Monday was also not the most pleasant. The 1.3431 and 1.3439 levels formed a resistance area that the price tried to overcome twice. It bounced off it the first time, and then overcame it the second time. Both times the signals were formed for several hours, so I can't call them strong and accurate. In addition, we have a downward trend on the 30-minute TF, so long positions should be opened with a half lot. After the formation of the first sell signal, the price managed to go down about 35 points. That's how much novice traders could earn on this deal. The price failed to reach the nearest target level, so the only option was to close the deal manually. If you didn't have time to do this, then it doesn't matter, because after 20 points down, you should have set the Stop Loss to breakeven, so there was no loss on a short position in any case. The next buy signal was formed when the price overcame 1.3439 and it turned out to be blatantly false, and the price after its formation began to jump from side to side. But since evening was already approaching, it was necessary to close all transactions and no longer enter the market.
How to trade on Tuesday:
The pair maintains a downward trend on the 30-minute TF, but in order to continue falling, it is now necessary to complete the correction. It may end near the trend line or near the level of 1.3488. The movement can be very strong on Thursday and Friday, but not until these days. Therefore, the correction is likely to continue on Tuesday. On tomorrow's 5-minute TF, it is recommended to trade by levels 1.3342, 1.3366, 1.3431-1.3439, 1.3488, 1.3521-1.3531. You can pay attention only to the report on business activity in the manufacturing sector for January in the UK. However, there is little chance that this report will be worked out. A report on business activity in ISM production will also be released in America, and it has a much better chance of being noticed by market participants.
Basic rules of the trading system:
1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal.
2) If two or more deals were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored.
3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading.
4) Trade deals are opened in the time period between the beginning of the European session and until the middle of the American one, when all deals must be closed manually.
5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel.
6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance.
On the chart:
Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.
Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.
The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).
Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, 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 on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.