FX.co ★ How to trade EUR/USD on October 18? Simple tips for beginners.

Analysis of Monday's deals:

30M chart of the EUR/USD pair

The EUR/USD currency pair was trading in absolute flat on Monday morning, and then it started a new round of upward movement in the afternoon. Since there were no important macroeconomic statistics either in America or in the European Union, we believe that the movement was purely technical. Formally, we have an upward trend that formed after the downtrend line was broken about a week ago. The euro is again striving to grow, but at the same time it continues to be located very close to its 20-year lows. Thus, the next round of growth by 100 points does not make the euro special. We are still inclined to believe that the long-term downward trend will continue. It just doesn't mean that the pair should move exclusively down every day. From time to time there are periods when the movements are horizontal or multidirectional. In any case, you need to trade on the levels that we have at our disposal.

5M chart of the EUR/USD pair

The moves on the 5-minute timeframe on Monday were very bad. It is enough to look at the European trading session to understand that we were dealing with an absolute flat. As we remember, false signals are often formed in the flat, and Monday was just such a case. Four trading signals were formed near the 0.9748-0.9753 area, three of which were false. Novice traders could try to work out the first two. In the first case, we were frankly lucky with a short position, because the pair went down the necessary 15 points in order to set Stop Loss to breakeven. In the second case, there was no 15 points up, so the long position closed at a loss. The third and fourth signals should no longer be worked out, because the first two turned out to be false. The last buy signal near the level of 0.9807 was a "borderline", as it was formed rather late. However, one could still try to work it out, since by that time a trend movement was already visible. As a result, the price managed to reach the level of 0.9845, where the position should have been closed. So we got one losing position and one profitable one. The total profit was about 0.

How to trade on Tuesday:

On the 30-minute timeframe, the pair is again aiming for growth, but now it is very difficult to understand how long this growth will continue and how strong it will be. There is no trend line or channel at our disposal right now, so trading comes "by touch". The pair is now in a position where further selling should have quite good reasons, but still, it is the fall that remains the most likely course of events. On the 5-minute TF on Tuesday, it is recommended to trade at the levels of 0.9636, 0.9709, 0.9807, 0.9845, 0.9877, 0.9952, 1.0020. When passing 15 points in the right direction, you should set Stop Loss to breakeven. There are no major events or reports scheduled in the EU on Tuesday. Only the most significant report on industrial production will be published in the US. It may provoke a market reaction, but we don't think it will be strong.

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.