FX.co ★ How to trade EUR/USD on March 6. Simple trading tips and analysis for beginners

Analyzing Friday's trades:

EUR/USD on 30M chart

In terms of technique, EUR/USD moved perfectly on Friday. The price rebounded from 1.0587 on Thursday evening and did it again on Friday. Volatility was only 50 points. Trading was inconvenient in such conditions. After the pair left the descending trend channel, the uptrend started and didn't at the same time. Formally, we saw an upward movement, but it was too weak. For most of the week, the pair traded mostly sideways rather than up or down. The fundamental and macroeconomic background were quite weak, just remember the EU inflation report and the US ISM Services Business Activity Index. Officials of the European Central Bank and the Federal Reserve also delivered speeches, but they did not particularly affect the pair's movement and traders' sentiment. Active trading was only observed on Wednesday and Thursday.

EUR/USD on 5M chart

The pair traded sideways on the 5-minute chart. Since we were dealing with a flat, the trading signals left much to be desired. The price rebounded from 1.0587-1.0607 four times during the day, and the upward movement did not even exceed 12-15 points. It means that beginners could try to use the first buy signal, but later on there were no signals to close the positions. Stop Loss did not work either, since traders couldn't set it because the price only passed the necessary 15 points late in the evening, which is when they had to leave the market. Thus, there was no profit or loss on Friday.

Trading tips on Monday:

On the 30-minute chart, the pair left the descending channel, but it could not gain anything special from it. Theoretically, the pair could continue its very sluggish move to the upside for a few more days, but I believe that it could fall again at any moment. On the 5-minute chart, it is recommended to trade at the levels 1.0433, 1.0465-1.0483, 1.0535, 1.0587-1.0607, 1.0669-1.0692, 1.0792, 1.0857-1.0867. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. On Monday the ECB retail sales report will be released and Philip Lane, the ECB's chief economist, will give a speech. Ordinary speeches of central bankers rarely provoke traders' reactions, but they can be used to understand the vector of future changes in monetary policy. In any case, it could be interesting. All in all, I don't expect any strong movements on Monday. Most likely, trading will be the same as Friday.

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.