FX.co ★ How to trade GBP/USD on December 27. Simple trading tips and analysis for beginners

Analyzing Monday's trades:

GBP/USD on 30M chart

GBP/USD did not trade on Monday either. At the opening of the day and the week, which occurred about 7 hours later than usual, the price rose by 20 pips, then it showed "convulsive" movements at the European trading session, and finally died at the US session. Basically, I warned you that there would be a flat, so there is nothing to be surprised about. Christmas was celebrated last weekend, so many trading floors were closed on Monday. The pound is still in a downtrend, but if a flat starts, it could cross the trend line.

GBP/USD on M5 chart

On the 5-minute chart, you can clearly see the nature of the pair's movement. Purely theoretically, beginners could try to open a short position, when the pair settled under 1.2064, which happened during the European session. However, after a couple of hours, it became clear that the market would not move, so the position could be closed. The funny thing is that the buy signal was not formed, so the position could be closed. Volatility was 25 points...

Trading tips on Tuesday:

On the 30-minute time chart, GBP maintains a downtrend thanks to the trend line. However, I still believe that there will be a total flat this week. In any case, the two charts we are looking at provide a comprehensive picture of what is happening in the market right now. If there are trading signals, we can try to work them out. But bear in mind that there is a very high probability of a flat. On the 5-minute chart, it is recommended to trade at the levels 1.1793, 1.1863-1.1877, 1.1950-1.1957, 1.2008, 1.2064-1.2079, 1.2141, 1.2186-1.2205, 1.2245-1.2260. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. There are no important events or reports in the UK or US. Thus, there will be nothing to react to and the probability of a flat is even higher.

Basic rules of the trading system:

1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is.

2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored.

3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement.

4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually.

5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels.

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 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, and 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 patterns (channels and trendlines).

Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.