FX.co ★ How to trade GBP/USD on January 26? Simple tips for beginners

Analysis of previous deals:

30M chart of the GBP/USD pair

The GBP/USD pair traded in different directions on Tuesday. But at the same time, during the day, it reached key levels and formed good trading signals around them. Therefore, despite the rather low volatility, the pair formed a number of good signals, corrected itself, and maintained a downward trend. The downward trend line remains on the 30-minute, so now short positions on the pair remain more preferable. In general, the pound continues to fall against the dollar after being in growth for more than a month. Today, there were practically no macroeconomic statistics either in America or in the UK, but the pair still did not stand in one place, and in the afternoon it also showed growth that was not weak. The results of the Federal Reserve meeting will be summed up tomorrow, which may have a strong impact on the pair's movement and its prospects. We believe that the downward trend will continue after tomorrow, but in any case we have a guideline in the form of a downward trend line.

5M chart of the GBP/USD pair

On the 5-minute timeframe, the movement of the pound/dollar pair for most of the day proceeded between the levels of 1.3439 and 1.3488. The first sell signal was formed in the form of a price rebound from the level of 1.3488. It should have been reached, although it was not the most accurate, because the price bounced off it three times. Nevertheless, it turned out to be strong, as the pair rushed down and stopped falling only near the level of 1.3439, from which it also rebounded, but much more clearly and accurately. Therefore, beginners could close short positions here and open longs. The price returned to the level of 1.3488 during the US trading session and this time it crossed an important level. Therefore, formally, it was possible to stay in the longs until the evening. However, wherever traders closed a long position, they still made a profit on it. As a result, both deals closed in profit, which could amount to 60-70 points.

How to trade on Wednesday:

On the 30-minute TF, the pair began to adjust after two bounces from the 1.3440 level. So today it may even continue to grow towards the trend line as part of an upward correction. As we have already said, there could be any form of reaction to the Fed meeting, but we still expect that the general mood of traders will not change after it. Consequently, we expect a resumption of the fall of the pound. At this time, short positions are more relevant, as the downward trend continues. On the 5-minute TF tomorrow, it is recommended to trade by levels 1.3366, 1.3414, 1.3439, 1.3488, 1.3521-1.3531, 1.3572. There won't be a single important publication or other event in the UK tomorrow. But in the US, the announcement of the results of the meeting of the Fed Monetary Committee and the speech of Fed Chairman Jerome Powell will take place. These are events in the evening, so before they start, novice traders can leave the market or put a Stop Loss on all transactions.

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 American 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 (14,22,3) 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.