Trading plan for GBP/USD on August 17. Simple tips for beginners

GBP/USD displayed a modest upward movement during Wednesday's trading session, but in essence, it is still trading within a sideways channel. We have seen the pound rise in recent days, rather than falling like the euro. On Tuesday, the UK released three quite important reports. Although two of them were weaker than forecasts, the third could support the pound. On Wednesday, it released inflation reports, which are the most important at this time. Even though inflation completely matched forecasts, there were still formal reasons for sterling to rise: the Consumer Price Index is still much higher than the target level. Therefore, the pair's growth in the last two days can still be explained, although we would have preferred to see it fall. However, the most important thing is the sideways channel. The pair has been trading between the levels of 1.2620 and 1.2787 since August 2nd.

Several trading signals were formed on the 5-minute chart. The first buy signal formed around the level of 1.2715. After that, the price went up about 35 points, and beginners could start closing long positions on the first sell signal (around the level of 1.2748). This signal should also be executed, and the rebound from the level of 1.2715 called for an upward reversal and the need to open new longs. In the end, the price returned to 1.2748, rebounded from this level, and has been moderately declining until now. All the trading signals were correct, but volatility was weak again. In the best case scenario, traders could have earned about 30 pips.

On the 30-minute chart, the GBP/USD pair is trading in a sideways channel. However, we insist that the pound fall, as we still believe it is overbought and unreasonably expensive. We already warned you that not all of this week's reports could support the dollar, so we may see confusing movements in the sideways channel. The key levels on the 5M chart are 1.2499, 1.2538, 1.2605-1.2620, 1.2653, 1.2688, 1.2715, 1.2748, 1.2787-1.2791, 1.2848-1.2860, 1.2913. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. No important events lined up in the UK. The US will release a report on claims for unemployment benefits. Maybe this can elicit a response from the market. The pair will probably be traded with low volatility again, and the sideways move will persist.

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.

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.