Trading plan for GBP/USD on November 7. Simple tips for beginners

GBP/USD also tried to continue its upward movement on Monday. However, it didn't have any good reasons to support the upward movement. In the second half of the day, the price gradually went back to the opening levels. So, the short-term uptrend persists, but it mainly consists of the movement from Friday, which had a particular reason to back its growth. Therefore, we don't expect the British pound to rise further without any new fundamental and macroeconomic support. This week, there will be very few significant events, so we expect a correction.

It's also important to understand that all the movement over the past month has been a correction. When a corrective cycle ends, the main trend resumes. This is the scenario we are expecting since we don't see any grounds for further growth. Of course, the downward movement might start a bit later, but currently, the correction looks convincing.

On the 5-minute chart, there were a couple of trading signals, specifically two. The second one was generated so late that there was no sense in executing it. The first signal, a buy signal involving the area of 1.2372-1.2394, pushed the pound to rise by 20 pips, which was enough to set a stop loss to breakeven. This was when the trade was closed. In general, volatility was 62 pips, which made it difficult to expect good signals and profits in advance.

On the 30-minute chart, we had been anticipating a proper upward correction cycle for the GBP/USD pair for quite some time, and it has finally materialized. However, the upcoming week's movements may be much calmer, and the correction could come to an end. Monday showed us that the market has no strong desire to continue buying at current levels. The key levels on the 5M chart are 1.1992-1.2010, 1.2052, 1.2089-1.2107, 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. There are no significant events or reports lined up in the UK and the US. Therefore, we shouldn't expect volatility to rise on Tuesday. We anticipate a downward correction.

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, after 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 trendline 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.

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.