FX.co ★ Trading plan for EUR/USD on June 12. Simple tips for beginners

Analyzing Friday's trades:

EUR/USD on 30M chart

The EUR/USD pair showed a volatility of 40 pips on Friday. In principle, there is no point in analyzing market movements and events because there were none. The only event of the day was European Central Bank Vice President Luis de Guindos' speech who did not provide any new or interesting information. The pair remained within a limited range throughout the day, highlighted in the chart by a rectangle. In other words, the market was flat on Friday, which has been ongoing for two weeks, with low volatility and a lack of fundamental and macroeconomic background. "Ideal" conditions for trading...

EUR/USD on 5M chart

Two trading signals materialized on the 5-minute chart. It is fortunate that there were only two, since there could have been many false signals with such a pattern. First, the pair bounced off the level of 1.0761, forming a buy signal, and then it fell below that level, forming a sell signal. In the first case, the price moved in the right direction for a maximum of 15 pips, and in the second case, it was even less, but a short position could have been closed with a few pips of profit as the closing had to be manual.

Trading tips on Monday:

On the 30M chart, the pair indicates a slight inclination to terminate its descending trend, but for now, it is moving sideways more than up or down. In the medium term, we anticipate a resumption of the downtrend. However, it may take quite some time before the trend returns. If the pair surpasses the 1.0792 level, it may trade higher. There will be a significant number of important events, so there is a good chance that movements will be better than this week. The key levels on the 5M chart are 1.0517-1.0533, 1.0607-1.0613, 1.0673, 1.0733, 1.0761, 1.0792, 1.0857-1.0867, 1.0918-1.0933. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. In the EU and the US, there are no significant events lined up. Therefore, the pair will probably go through low volatility and volume.

Basic trading rules:

1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal.

2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored.

3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading.

4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually.

5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel.

6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.

How to read charts:

Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.

Red lines are channels or trend lines that display the current trend and show which direction is better to trade.

MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines.

Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, 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 should remember that every trade cannot be profitable. The development of a reliable strategy and money management are the key to success in trading over a long period of time.