Trading plan for GBP/USD on November 20. Simple tips for beginners

On Friday, GBP/USD tried to correct but failed to overcome the nearest support level (1.2387) and bounced back up. Throughout the week, the British pound managed to rise due to US data. Since there were few crucial reports, it only managed to show substantial growth on Monday and Tuesday. As with the euro, we believe that the pound has already shown a pronounced correction, therefore, it can now resume the downtrend in the medium-term. As with the euro, an ascending trendline has formed, which can identify the end of the current uptrend in the short-term. Furthermore, the pound doesn't have a good reason to rise on its own, it needs the support of US reports.

On the 5-minute chart, only one trading signal was generated. It was strong and accurate enough – the price bounced off the 1.2372-1.2387 area, afterwards it started to rise, and by the end of the day, the pair reached the level of 1.2457. Therefore, beginners should have opened long positions, and it was necessary to close them closer to the evening. The minimum profit on longs was 45 pips.

On the 30-minute chart, the GBP/USD pair sharply and unexpectedly resumed its upward movement. But we still believe that it will end soon. Initially, we expected a more pronounced correction, and in the last week, the downtrend resumed. But in both cases, U.S. data interfered, and we also have the market's inadequate reaction to the reports. Now we have an ascending trendline, breaking through which will help determine the end of the uptrend. The key levels on the 5M chart are 1.2052, 1.2089-1.2107, 1.2164-1.2179, 1.2235, 1.2270, 1.2310, 1.2372-1.2387, 1.2457-1.2488, 1.2544, 1.2605-1.2620, 1.2653, 1.2688, 1.2748. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. On Monday, there are no significant events planned in the United States, and in the United Kingdom, Bank of England Governor Andrew Bailey will speak. This could be interesting, especially amid a sharp and strong drop in inflation in October. However, no one expected another rate hike from the Bank of England, and right now no one expects it either.

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.