FX.co ★ How to trade GBP/USD on August 26? Simple tips for beginners.

Analysis of Thursday's deals:

30M chart of the GBP/USD pair

The GBP/USD pair also tried to form a new round of upward correction on Thursday and also failed to overcome the nearest level of 1.1863, which is today's high and the day before yesterday. Thus, by and large, the pound/dollar pair is now also inside the flat, limited by the levels of 1.1716 and 1.1863. There is also a descending channel in the chart, which remains relevant and supports the downward trend. In general, we expect the pound to continue to fall because of the technical picture, and because of the fundamental background, and because of geopolitics. In any case, before the price settles above the channel, it makes no sense to think about buying the pound. If the entire global downward trend ended at this time, then we would see a sharper rise in the pair, rather than a three-day stomp in a limited price range. No important reports were published in the UK on Thursday, and there was nothing interesting at all. Beginners could pay attention only to the US report on GDP for the second quarter. Since the report turned out a little better than expected, the dollar could rise in price in the afternoon based on it. But there was no talk of any strong market reaction.

5M chart of the GBP/USD pair

The pound/dollar pair also moved in a flat on the 5-minute timeframe, although at first glance it may not look obvious. All trading signals of the day were formed near the same level of 1.1825, and there were five of them in total. The 1.1863 level is new and did not take part in today's trading. If the euro's movements were absolutely bad, then in the pound, the newcomers could at least have time to put Stop Loss on each open transaction to breakeven. It was necessary to work out only the first two signals, since they were all false (the price never reached a single target level). Both in the first and in the second cases, at least 20 points were passed upwards, after which the price returned to the level of 1.1825. Thus, both trades were closed by Stop Loss at breakeven. The last three signals should not have been processed. The probability that Friday will also pass between the levels of 1.1716 and 1.1863 is very high.

How to trade on Friday:

The pound/dollar pair continues to follow a downward trend on the 30-minute TF, but this trend has managed to turn into a formal one over the past three days, since the price cannot yet get out of the 1.1716-1.1863 channel. Maybe it's a coincidence, maybe not, but as long as the pair is in the horizontal channel, traders will face all the signs of a flat. In general, we expect the British pound to continue falling. On the 5-minute TF on Friday, it is recommended to trade at the levels of 1.1716, 1.1755, 1.1825, 1.1863-1.1877, 1.1967. When the price passes after opening a deal in the right direction for 20 points, Stop Loss should be set to breakeven. Nothing interesting is planned for Friday in the UK, and in the US, not the most significant reports on personal income and expenses of Americans will be released. Federal Reserve Chairman Jerome Powell's speech will be the highlight of the day, but it will take place late in the evening.

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.