FX.co ★ How to trade GBP/USD on January 31? Simple tips for beginners.

Analysis of previous deals:

30M chart of the GBP/USD pair

The GBP/USD pair also tried to overcome the important support level of 1.3374 on Friday, but also failed to do so. As a result, the price bounced off the level several more times, but also failed to adjust, as did the European currency. There was only a slight upward pullback. At the same time, the downward trend continues to persist, as evidenced by the downward trend line. It is located far enough from the price's current position, so there is a place to adjust. On Friday, not a single important report was published in the UK, and in America there were only a few minor ones, which, oddly enough, still provoked a market reaction: at the beginning of the US session, the dollar fell by 50 points. In general, the volatility of the pair was low. We believe that the pair may try to adjust on Monday or Tuesday of the new week.

5M chart of the GBP/USD pair

On the 5-minute timeframe, the movement of the pound/dollar pair on Friday was more difficult than for the euro currency. First of all, the price did not stand in one place, but at the same time it was not in a trend kind of movement. Secondly, it crossed the level several times, which at the end of the day was deemed irrelevant. All this made life much more difficult for novice traders. However, let's start to understand the trading signals. The first one was formed when the pair settled below the level of 1.3406 at the beginning of the European session. Subsequently, the price dropped to the level of 1.3366, which just worked perfectly and bounced off it, forming a buy signal. The first deal turned out to be successful and allowed us to earn 22 points. Then newcomers had to open a long position, and the price rushed up, overcame the level of 1.3406, then bounced off it twice, but failed to reach the next target of 1.3439. Thus, this transaction should have been closed either manually in the late afternoon, or after the price dropped below 1.3406. In any case, it managed to earn 30-40 points. Despite the rather complicated and ugly movements, the day turned out to be profitable and without a single unprofitable transaction.

How to trade on Monday:

The pair maintains a downward trend on the 30-minute timeframe, but in order to continue falling, it now needs to overcome the level of 1.3374. Otherwise, a correction to the levels of 1.3440 and 1.3488 will be more likely. At the beginning of the new week, there will be few strong macroeconomic reports, so a correction is possible. Just before the Bank of England meeting. On the 5-minute TF, it is recommended to trade at the levels 1.3310, 1.3342, 1.3366, 1.3431-1.3439, 1.3488. Tomorrow there will be no major publication or other fundamental event in the UK. The US also has an empty calendar of macroeconomic events, so during the day, novice traders will have nothing to pay attention to. But in general, there will be a fairly large number of reports and events in the new week. Promises to be interesting.

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.