FX.co ★ How to trade GBP/USD on March 7. Simple trading tips and analysis for beginners

Analyzing Monday's trades:

GBP/USD on 30M chart

On Monday, GBP/USD traded sideways, with low volatility. This is clearly visible even on the hourly chart. However, that's not the main point. The main thing is that now the pair has been staying in the horizontal channel for several weeks, riding the "swing". And this is also clearly seen in the picture above or in the 4-hour chart. Thus, beginners should understand that the pair isn't moving quite logically right now, and doesn't always act in accordance with the macroeconomic or fundamental background. On Monday, the macroeconomic background was empty for both the UK and the US. That's why the 50 point movement was somewhat logical. In addition, there is often a low volatility pattern on Mondays. I think that the pair should keep falling in the middle term, but till it leaves the sideways channel there is no point in discussing it. Today, Powell's speech can theoretically influence trader sentiment, but the pair is already in the middle of the horizontal channel, so it will likely stay in it.

GBP/USD on 5M chart

On Monday, the pair only moved sideways. Thus, it was very difficult to count on strong and profitable signals. In the best case, the pair could simply fail to reach any level, but this was too perfect to be true. As a result, we got three trading signals near 1.2008, of course, all three of them were false. The price did not even pass 20 points in the right direction in both cases (the third signal should not have been triggered any more), so you could lose on both trades. Remember that it is impossible to gain profit in the market every day, and every signal cannot be profitable. That's why such days happen from time to time, you just have to put up with it.

Trading tips on Tuesday:

On the 30-minute chart, GBP/USD started a new upward movement inside the horizontal channel and within the "swing". Therefore, the pound may rise as it aims to hit 1.2143, simply because it is the upper limit of the channel. The fundamental and macroeconomic background at this time are of secondary importance. On the 5-minute chart, it is recommended to trade at the levels 1.1716, 1.1793, 1.1863-1.1877, 1.1924, 1.1992-1.2008, 1.2065-1.2079, 1.2143, 1.2171-1.2179, 1.2245-1.2260. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. No important events scheduled for Tuesday in the UK. In the US, Federal Reserve Chairman Jerome Powell will give a speech later in the evening. However, the pair is flat, which means that the movements may be any strong, weak, trendy or flat. We should be ready for any developments.

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.