FX.co ★ How to trade EUR/USD on May 10. Simple trading tips and analysis for beginners

Analyzing Tuesday's trades:

EUR/USD on 30M chart

The EUR/USD pair showed low volatility and weak downward movement again on Tuesday. It is not worth celebrating that the euro has finally shown at least a small decline, since it is clearly visible on any higher timeframe that the pair is in a flat, meaning it is in a sideways channel. And within a sideways channel, twists of decline are quite possible, which do not mean that a new downward trend is beginning. Therefore, the technical picture has not changed at all for Tuesday.

There was not a single important event in either the European Union or the United States. In Europe, several European Central Bank representatives spoke, and some of them even said that the ECB rate could rise longer and stronger than previously assumed. But (surprisingly!) the bulls were not interested in this information, which further convinces us that the pair is in a flat. Thus, for now, we can only trade on the 5-minute chart and wait for more important information, which will be very scarce this week.

EUR/USD on 5M chart

On the 5-minute chart, in essence, only one trading signal was formed on Tuesday. The pair overcame the 1.0965-1.0980 area in the middle of the European trading session, but the subsequent downward movement was so weak that it was extremely difficult to make a profit from it. Volatility is generally very weak now, so even with strong signals, it is not possible to get a good profit. Beginners should take this fact into account and decide for themselves whether they want to trade if the pair moves 50 points a day.

Trading tips on Wednesday:

On the 30-minute chart, the pair started a new downward movement within the general flat. The "swings" continue, the fundamental and macroeconomic backgrounds do not lead to a logical reaction, and there will be very few important reports and events this week. The euro remains at high, unjustified values for itself and is very overbought, so we still expect a strong decline in quotes. On the 5-minute chart, consider levels 1.0792, 1.0857-1.0867, 1.0920-1.0933, 1.0965-1.0980, 1.1038, 1.1070, 1.1132, 1.1184, 1.1228. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. On Wednesday, inflation reports will be published in Germany and the United States. Naturally, US inflation will be of paramount importance for the pair, but German inflation can also provoke a market reaction.

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.