FX.co ★ How to trade EUR/USD on March 17, 2022. Tips and trades analysis for beginners

Analysis of Wednesday's trades:

30M chart of EUR/USD

The EUR/USD pair was in a corrective move on Wednesday and tested the 1.1019 mark by the end of the day. US retail sales increased by 0.3%, while experts had expected the figure to rise by 0.4%. The market clearly showed no reaction to the results. Due to the FOMC meeting, it is hard to tell in what direction the pair might go on Thursday as volatility might soar and several reversals might occur. Given that the market was prepared for the Fed's decision and Powell's speech, its reaction might be short-lived.

M5 chart of EUR/USD

In the M5 time frame, a few trading signals were produced on Wednesday. All the signals were made near the 1.1019 level. Unfortunately, neither of them could have brought beginners a profit. When the first signal was produced, the price went down by about 20 pips and then returned to 1.1019. A stop-loss order triggered and the trade closed at the breakeven point. When the second signal was generated, the quote plunged by 30 pips for 5 minutes at some point. Therefore, it was not the best time for going short. The third signal should have been ignored because two false signals were produced near the level. However, if beginner traders went short after the third signal, their trades would still close at the breakeven point after a stop-loss order had triggered, or they would yield the lowest possible profit.

Trading plan for Thursday:

In the 30M time frame, the downtrend has stopped. The pair has traded in the range between 1.0870 and 1.1019 for 4 days. However, the technical picture may soon reverse. In any case, there is no clear trend, trend line, or channel now. The target levels in the 5M time frame are seen at 1.0870, 1.0902, 1.0932, 1.1019, and 1.1106. A stop-loss order should be set at the breakeven point as soon as the price passes 15 pips in the right direction. No important macro events are to unfold in the US and the eurozone on Thursday and the market will unlikely react to data on US industrial production. Meanwhile, traders will be digesting the outcome of the FOMC meeting, so the reaction might be seen in the market in the next 24 hours.

Basic principles of the trading system:

1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal.

2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored.

3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading.

4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually.

5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel.

6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.

How to interpret charts:

Support and resistance levels can serve as targets when buying or selling. You can place Take Profit near them.

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

MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines.

Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, 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.

Beginner traders should remember that every trade cannot be profitable. The development of a reliable strategy and money management is the key to success in long-term trading.