FX.co ★ How to trade GBP/USD on June 1? Simple tips for beginners.

Analysis of Tuesday deals:

30M chart of the GBP/USD pair

The GBP/USD pair has been trading in a very limited range today. In general, the last few days have passed in a very limited range. The pair, of course, managed to settle below the level of 1.2597, but by the evening it returned to the area above it. Therefore, the pound continues to be close to its local highs. This is what we talked about in the article on the euro/dollar. Even if the ascending trend line is overcome, it is not a fact that a downward trend will now begin. For the pound, the trend line has already been transformed once to take into account all the turns of the movement. Thus, the chances for the fall of the British currency are now greater, but not by much. Neither the US nor the UK published a single important report on Tuesday, there was not a single important event. Nevertheless, the pound showed a volatility of about 100 points, so after two days of relative calm, the pair is trading very actively again. This gives us reason to expect that the trend movement will continue in the near future. I really don't want to start "swings", "borders" and flat.

5M chart of the GBP/USD pair

The pair formed such signals on the 5-minute timeframe today that it would be better if it did not form them. In principle, the chart above clearly shows the nature of the movement of the pair during the day. It can hardly be called a calm trend movement, which we recommend that novice traders work out in the first place. Six signals were formed at the European trading session, all in the area of 1.2597-1.2616. Therefore, signals for a rebound from the boundaries of this horizontal channel clearly should not have been worked out. However, one false signal was formed when the pair settled above the level of 1.2616. Unfortunately, it closed at a loss. The next signal worth trying to work out is consolidating under the level of 1.2597. After that, the price went down about 20 points and bounced perfectly from the level of 1.2559. Therefore, a profit of 15 points could be obtained. It was also necessary to work out a signal to buy in the form of a rebound from 1.2559, after which the pair went up 60 points. A long position should have been closed when the price fell below the level of 1.2616. Thus, a total of three positions were opened, of which two turned out to be profitable and covered the loss on the first trade.

How to trade on Wednesday:

The upward trend is formally canceled on the 30-minute timeframe, however, the pair continues to remain close to its peaks, so it can still resume. There will no longer be a trend line, which complicates the process of trading and determining the trend. The pound must now decide in which direction to move further. On the 5-minute TF it is recommended to trade at the levels 1.2471-1.2477, 1.2559, 1.2597-1.2616, 1.2659-1.2674, 1.2697. When the price passes after opening a deal in the right direction for 20 points, Stop Loss should be set to breakeven. The UK and the US are set to publish indexes of business activity in the manufacturing sectors. This is far from the most significant data, so the reaction to them can follow only if the actual and forecast values differ greatly from each other. Slightly more likely to not be ignored is the ADP report.

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.