FX.co ★ Trading plan for GBP/USD on June 20. Simple tips for beginners

Analyzing Monday's trades:

GBP/USD on 30M chart

GBP/USD reversed its course within the uptrend supported by the ascending trend line on Monday. It was a low-volume trading day. In fact, the most probable scenario was realized as there were no significant events in either the United Kingdom or the United States. The downward correction may persist in the first half of the week. Starting from Wednesday, volatility may sharply increase due to important data, particularly UK inflation and the Bank of England's decision on the key interest rate. In reality, these events may turn out to be hardly surprising. Inflation is likely to slow down, and the BoE is expected to raise the rate by 0.25%. There's a high probability that the market has most likely already priced in these factors. However, the inflation report could bring a surprise, but it is scheduled for Wednesday.

GBP/USD on 5M chart

The situation on the 5-minute chart turned out to be good. Since the movement was very weak, it was better to have fewer signals. In the end, the first signal was formed only in the evening when the price dropped to the level of 1.2772. Naturally, it should not have been executed, so there should have been no open trades throughout the day.

Trading tips on Tuesday:

As seen on the 30M chart, the pair continues its uptrend in the short term. There is no need to talk about any logic in the movements now as the pound is still heavily overbought and is growing with or without reason. This week, the volatility may be quite high again, but hardly today. The economic calendar reminds us of several important events. The key levels on the 5M chart are 1.2457, 1.2499, 1.2538, 1.2597, 1.2629, 1.2698, 1.2772, 1.2860, 1.2913, 1.2981. When the price moves 20 pips in the right direction after opening a trade, a stop loss can be set at breakeven. There are no significant events lined up in the UK. In the US, only the speeches of James Bullard and John Williams may turn out to be interesting. Therefore, there won't be much to react to during the day, and volatility may be low again.

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.