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

Analysis of Thursday's deals:

30M chart of the GBP/USD pair

Yesterday, the GBP/USD pair finally corrected as we expected. In many ways, the pound's fall was provoked by the speech of Jeremy Hunt, the British Chancellor of the Exchequer, who presented his financial plan, which provides for a tax increase instead of the cut that Liz Truss wanted to implement. We cannot unequivocally link the pound's fall with Hunt's speech, since the euro was falling at the same time, but the probability of this is still very high. However, the pound continues to be above the trend line, so the upward trend continues. From a technical point of view, the pound may continue to rise, but from a fundamental point of view, it will be even less logical than the pound's growth over the past two weeks. We believe that there were certain reasons to buy the pound from the market, but they were not so strong that the pair rose by 750 points, and the British inflation report, which could have provoked the pound's growth, did not cause such a reaction from the market.

5M chart of the GBP/USD pair

Quite a lot of signals were formed on the 5-minute chart, but the movement was not the best. Let's try to figure out how to trade today. The first buy signal was formed at night near the 1.1863-1.1877 area, from which the price bounced. At the opening of the European trading session, the pair moved away from the formation point by only a few points, so a long position could be opened. Subsequently, the pair went up 70 points, but did not reach the nearest target level. The 1.1957 level is a new one that formed instead of 1.1967. Thus, beginners could get a small profit on this transaction if they were manually closed. The next two signals formed again around 1.1863 -1.1877. First, the pair overcame this area, and therefore bounced from it from below. In the first case, 53 points were passed, but here, too, most likely, Stop Loss worked at breakeven. In the second case, the price reached the target level of 1.1793 and even overcame it, so the position should have been closed with a reverse consolidation above this level. Profit at 40 points. Losses on the euro/dollar pair managed to be covered and we even managed to make some money on Thursday.

How to trade on Friday:

The GBP/USD pair maintains an upward trend on the 30-minute time chart, which continues to be supported by an ascending trend line. Although we still don't see a good reason to show such strong growth, the market can move regardless of our opinion. So we definitely have an upward trend at this time, but we still expect a significant downtrend this week. It has already started after the bounce from 1.2008, the question is how strong will it be in reality? On the 5-minute TF it is recommended to trade at the levels of 1.1550, 1.1608, 1.1648, 1.1716, 1.1793, 1.1863-1.1877, 1.1967, 1.1994, 1.2079. When the price passes after opening a position in the right direction for 20 points, Stop Loss should be set to breakeven. The UK will publish a report on retail sales, but nothing in the US. A slight reaction may follow the only report of the day...

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 positions 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 positions are opened in the time period between the beginning of the European session and until the middle of the US one, when all positions 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.