FX.co ★ How to trade GBP/USD on August 23? Simple tips for beginners.

Analysis of Monday's deals:

30M chart of the GBP/USD pair

The GBP/USD pair also continued its downward movement on Monday and reached its 2-year lows. Namely, the 1.1758 level. The price has gone far below the descending channel, which only indicates that the fall is now even stronger than it could be. As you understand, there were no specific reasons for the fall on Monday. Not a single report was published in the UK or the US, not a single fundamental event. The market simply continues to sell off the pound and the euro on a whim. As we said, in the long term, both the euro and the pound have corrected enough to resume their downward trends. This is exactly what we are seeing now. As in the case of the euro, traders now do not even need macroeconomic events to move the pair in the direction they want. Therefore, the fall can continue for any amount of time.

5M chart of the GBP/USD pair

The pound/dollar pair moved less presentably than the euro/dollar pair on the 5-minute timeframe. If the euro stopped in its fall near an important level only for a short period of time, then the pound practically did not fall in the European trading session, and began a powerful downward movement only after lunch. Trading signals were formed only near the area of 1.1807-1.1827. A total of three sell signals were generated. In the first two cases, the pair could not go down even 20 points, but it could not consolidate above the specified area either. Therefore, the only open short position had to remain so at all times. The price rushed down and went about 50 points in the right direction only on the third attempt. Novice traders could get 50 points of profit, since the deal had to be closed manually in the late afternoon (the buy signal was never formed).

How to trade on Tuesday:

The pound/dollar pair continues to follow a downward trend on the 30-minute TF. Therefore, there should be no questions on the pair's movement now, in principle. Most of the factors remain in favor of the US currency, so the pound can safely continue its fall. On the 5-minute TF on Tuesday, it is recommended to trade at the levels of 1.1759, 1.1807-1.1827, 1.1898, 1.1967. 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 will publish indexes of business activity in the services and manufacturing sectors. We doubt that traders generally need these data right now, however, a certain reaction to them may follow. Especially if the actual values differ greatly from the predicted ones.

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.