FX.co ★ How to trade GBP/USD on December 21? Simple tips for beginners. The pound also returned to the horizontal channel

Analysis of previous deals:

30M chart of the GBP/USD pair

The GBP/USD pair traded in a completely different way from the EUR/USD pair on Monday. There were at least two reversals during the day, and the beginning of the day was left for the dollar. Nevertheless, if you do not take into account Thursday and Friday of the previous week, when the British currency quotes first went above the level of 1.3268, and then returned below this level for the whole day, the pair continues to remain in the 1.3173-1.3268 horizontal channel... In this way, it is very similar to the EUR/USD pair. Consequently, in the coming days, the British currency may also continue to remain in the specified range, especially since no important statistics and "foundation" are planned for this week. On Tuesday for sure. Traders showed on Monday that they are not going to sit on the fence, but still, with the approaching holidays, volatility may fall. For this, novice traders should be prepared.

5M chart of the GBP/USD pair

On the 5-minute timeframe, the movement of the pound/dollar pair on Monday was very good. There were two reversals, as already mentioned, and the movements themselves were without a bunch of corrections and pullbacks. There was only one trading signal, since there are practically no local lows and highs between the levels of 1.3172 and 1.3268. We have already mentioned the reasons in the EUR/USD article. The 1.3241 level only appeared today, so it did not participate in today's trading. As a result, the only buy signal was generated when the rebound from the level of 1.3172. Novice traders had to work it out with a long position. Subsequently, the price went up 56 points, but could not reach the nearest level, so the deal had to be closed at any of the Take Profit we recommend (40-50 points). In any case, this is a profit, with which we congratulate novice traders.

How to trade on Tuesday:

At this time, on the 30-minute timeframe, the pair returned to the 1.3173-1.3268 horizontal channel. Therefore, we expect this trend to continue in the coming days. However, this does not mean that the price cannot leave the horizontal channel under any circumstances. Therefore, when consolidating below or above it, a new trend may form. The important levels on the 5-minute timeframe are 1.3172, 1.3241, 1.3268, 1.3310. We recommend trading on them on Tuesday. The price can bounce from them or even surpass them. As before, we set Take Profit at a distance of 40-50 points. At the 5M TF, you can use all the nearest levels as targets, but then you need to take profit, taking into account the strength of the movement. When passing 20 points in the right direction, we recommend setting Stop Loss to breakeven. Not a single important report will be published in the UK and the US again on December 21. Thus, volatility may gradually decrease on the eve of Christmas and New Years, and the pair's movement may become more and more like an outright flat.

Basic rules of the trading system:

1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal.

2) If two or more deals were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored.

3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading.

4) Trade deals are opened in the time period between the beginning of the European session and until the middle of the US one, when all deals must be closed manually.

5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance.

On the chart:

Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.

The MACD indicator consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, 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 on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.