FX.co ★ How to trade EUR/USD on August 2? Simple tips for beginners.

Analysis of Monday's deals:

30M chart of the EUR/USD pair

The EUR/USD currency pair continued to grow on Monday. It is a completely different matter that it still cannot settle above the level of 1.0269. However, its persistent attempts to overcome it may eventually lead to a consolidation above. We have even formed an ascending trend line, which is currently signaling an upward trend. Thus, slowly, almost crawling, but the euro is also becoming more expensive and moving away from its 20-year lows. We still believe that there are no good reasons for the euro's growth. Of course, it can continue the technical upward correction within the global downward trend, but now everything looks as if the downward trend will resume, and it is only a matter of time. The thing is that the geopolitical situation in the world continues to heat up, and the fundamental background, which partly led the pair to its 20-year lows, has not changed at all lately. Therefore, on what basis should we expect a strong growth from the euro? However, at this time there is an ascending trend line, so long positions on the pair are still a priority. There was a macroeconomic background on Monday, but traders paid practically no attention to data on business activity in the manufacturing sectors of the US and the EU.

5M chart of the EUR/USD pair

The movements on the 5-minute timeframe were rather weak on Monday, but at the same time, almost perfect signals were formed. The price rebounded from the level of 1.0221 at the very beginning of the European trading session, after which it was able to grow to the level of 1.0269. The distance that was covered is not too great, but the accuracy of the signals allowed novice traders to earn about 20 points according to our recommendations. This was followed by a rebound from the level of 1.0269, after which the pair fell almost to the level of 1.0221 - only 4 points were missing. Four points is quite a lot to consider this as a "signal with an error", so the short position closed at breakeven by Stop Loss. The last signal was formed in the evening, when the pair returned to the area of 1.0269-1.0277, but at the time this area was worked out, it was not even clear what exactly would happen: a rebound or breakthrough? Thus, this signal should not have been worked out, since it formed too late. As a result, only one transaction was opened and it turned out to be profitable.

How to trade on Tuesday:

A slight upward trend has been formed on the 30-minute timeframe at the moment, but the price must first overcome the level of 1.0269 in order to count on a stronger growth. We still doubt the euro's ability to continue its upward movement, but it should be recognized that the euro can still rise in price at a low pace. On the 5-minute TF on Tuesday, it is recommended to trade at the levels of 1.0123, 1.0156, 1.0221, 1.0269-1.0277, 1.0354, 1.0383. When passing 15 points in the right direction, you should set Stop Loss to breakeven. No major events or publications are scheduled for Tuesday in the US or the EU. Thus, given the general nature of the movement, it is quite possible that we will be quite reluctant to trade the pair again. A weak upward trend may persist, but the pair may often pull back down.

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 (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.