Trading plan for EUR/USD on November 16. Simple tips for beginners

EUR/USD tried to start a correction after the sharp growth it went through on Tuesday, but it didn't go well. The first obstacle in the form of the 1.0835 level stopped the decline, and it turned out that the euro fell by only 40 pips. After a 200-pip rise in just a few hours, a 40-pip correction seemed negligible. Several interesting reports were released on Wednesday, which triggered the market's similarly inadequate reaction as the day before. In the EU, the industrial production report was worse than the gloomy forecasts. However, the market responded with a 10-pip drop. In the US, the producer price index, which was negative in October, had the same meaning as the inflation report, but the market responded with small dollar purchases. Retail sales in the U.S. decreased by 0.1% in October, and again, there were small dollar purchases. All of this against the backdrop of a strong need for a bearish correction.

On the 5-minute chart, several trading signals were generated, and the pair traded more sideways than downwards. The price crossed the 1.0871 level and bounced off it twice from below. There was also a bounce from the 1.0835 level, but just once. Therefore, beginners could open three trades on Wednesday: two short positions and one long position. Each trade closed at a profit, but the profit wasn't significant since the distance between the levels was just 36 pips. We believe that beginners could earn about 30-40 pips on Wednesday, which is still a good thing.

On the 30-minute chart, the corrective phase remains intact. We saw sharp movements on Tuesday due to the US inflation data. And even if it was a sharp growth, it's still a part of the corrective phase. Therefore, we expect this cycle to end and the downtrend to resume. Unfortunately, the US reports that have been released this month have been very weak, preventing the pair from resuming its downward movement. The key levels on the 5M chart are 1.0526, 1.0568, 1.0611-1.0618, 1.0668, 1.0733, 1.0767-1.0781, 1.0835, 1.0871, 1.0901-1.0904, 1.0936, 1.0971-1.0981, 1.1011. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Thursday, European Central Bank officials Christine Lagarde and Luis de Guindos will speak. From the US, we have a series of speeches by Fed representatives, reports on unemployment claims and industrial production. You should pay attention to Lagarde's speech.

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, post 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 trend line 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.

Beginning traders 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.