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

GBPUSD started a new upward movement on Monday. At least, this is the conclusion that seems fitting at the moment. We already warned you that the pair may not have completed its bullish correction, and that the dollar's rise on Thursday and Friday appeared illogical. In this case, the market needed to amend the situation. As a result, the market has recently been occupied with balancing exchange rates following illogical movements.

No economic reports were released on Monday. We can highlight Bank of England Chief Economist Huw Pill's speech, although he didn't make any groundbreaking statements. However, we have repeatedly mentioned that traders already know what they can expect from the central banks. As a result, there was no reaction to their speeches. Also, there are simply no economic reports. We witnessed the pair's movements with a 70-pip volatility. It's not insignificant, but it wasn't substantial either.

There were two trading signals on the 5-minute chart. The pair initially rebounded from the 1.2164-1.2179 area, but it couldn't even pass 20 pips in the right direction. Then, a buy signal was formed around the same area, and this time the pair moved 20 pips in the right direction. Beginners could have earned the 20 pips by manually closing the trade in the evening (as there were no other options for closing it), but the first short position resulted in a loss. So basically, the day ended with no profit.

On the 30-minute chart, GBP/USD may resume its downtrend in the medium-term. The rise could be a part of the new corrective phase, which would be logical, but it could also be a retracement against the pair's decline on Thursday and Friday. The current situation is vague, but we believe that the pair should correct higher. 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, and 1.2688. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. Unemployment, jobless claims, and wage data from the United Kingdom is due to be published on Tuesday. These reports are of moderate importance. U.S. retail sales and industrial output data will also be released. These are weaker reports but are still meaningful for the market.

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.