Trading plan for EUR/USD on May 24. Simple tips for beginners

On Wednesday, volatility in EUR/USD was low, and sideways trend prevailed. However, the pair slid some 10-15 pips again, so the bearish trend remains intact. The price continues moving in a descending channel. As mentioned in our previous reviews, the momentum is low, similar to volatility. The current conditions are not suitable for trading the pair. There is some directional movement, but the pair hardly moves 50-60 pips a day. So, it is more reasonable to use medium-term strategies for those who have such an opportunity.

Today, neither the European Union nor the United States published any significant reports. The only event that could draw attention is the Fed minutes slated for release today. Meanwhile, the European traders expect the speech of ECB Chair Christine Lagarde. However, EUR/USD displays virtually no reaction to these events, which speaks much for their significance.

The 5M chart shows a clearer picture of today's EUR/USD performance. Basically, it was moving between 1.0761 and 1.0792. The first two sell signals were identical, so one position should have been opened. Later on, the pair declined below 1.0761, but it did not continue falling and returned to the area above this level. It was a signal to close sell positions, which would bring a profit of 10 pips. The buy signal would allow beginners to get more 10 pips as the price again approached the level of 1.0792. A new rebound from this level would provide new selling opportunities, as the target level of 1.0762 was reached again. As we see, even good trading signals could generate a profit of only 10 pips due to moderate volatility of 50-60 pips.

As seen on the 30M timeframe, the pair continued moving downward, taking a pause occasionally. The bearish trend has been developing for 2 weeks already, which totally matches our expectations. In the nearest future, the upward correction is likely to start, though the descending channel still indicates continuation of the downward trend. The key levels on the 5M timeframe are: 1.0607-1.0613, 1.0715, 1.0761, 1.0792, 1.0857-1.0867, and 1.0918-1.0933. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. No important data is slated for release in the EU on Thursday, while the United States will release a couple of low-impact reports. Specifically, the GDP revised estimate will be published, which is considered to be of minor importance. Also, the US unemployment report will see the light.

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 a 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.

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.

Beginning traders 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.