FX.co ★ Trading plan for EUR/USD on July 4. Simple tips for beginners

Analyzing Monday's trades:

EUR/USD on 30M chart

The EUR/USD pair started the trading day of the week by demonstrating chaotic movements, although it went through low volatility - just over 60 points. This is not a flat, but somewhat close to it. Especially since the pair managed to rise and fall during the day. The pair quickly overcame the downward trend line, but at the same time, it could not cross the 1.0918 level. Therefore, we still don't know whether it will rise further.

All of Monday's economic reports were related to PMIs in the manufacturing sector. Reports on Germany and the European Union were disappointing, as their second estimate turned out to be even worse than the first. Not only have they been below the "waterline" of 50 for about a year, but they also fall from month to month. Therefore, it was logical for the euro to fall during the European session. And in the second half of the day, we received slightly less disappointing data on the US. Both indices were worse than the previous month, but the dollar started to fall long before they were published. Thus, the market simultaneously worked out and did not work out the macro data.

EUR/USD on 5M chart

There was one entry point on the 5-minute chart, which you could have executed. At the very beginning of the European session, the pair rebounded from the level of 1.0918, after which it went down about 50 points, almost reaching the level of 1.0867. There was a shortage of just 4 points. This is a big error for the euro, but beginners could still close the sell deal manually. But it was not worth opening longs from this level, as there was no signal. At the end of the day, the pair returned to the area of 1.0918-1.0933, but there were no new signals. Formally, there was a rebound from this area, but it was not possible to get either profit or loss from it.

Trading tips on Tuesday:

On the 30M chart, the pair has secured a position above the downward trend line, but failed to cross the 1.0918 level. So it's obvious that the pair is not going to rise further anytime soon. We are still in favor of the downtrend. Right now we still don't know which way the pair intends to move during the week. The key levels on the 5M chart are 1.0733, 1.0761, 1.0803, 1.0857-1.0867, 1.0918-1.0918, 1.0971-1.0977, 1.1038, 1.1091, 1.1132. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Tuesday, no important events lined up in the European Union and the US, so we should brace ourselves for another low-volatility day. The pair could move in an erratic manner or something close to a flat.

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.