FX.co ★ Trading plan for EUR/USD on August 9. Simple tips for beginners

Analyzing Tuesday's trades:

EUR/USD on 30M chart

On Tuesday, EUR/USD extended the downward bias against Friday's growth. As a result, it ended up near the previous week's lows, putting traders in a twofold situation. On one hand, the pair will likely fall in the medium term. On the other hand, the pair could correct in the short term, especially since the pair breached the descending trendline the week before. Therefore, we shouldn't rush into conclusions. The pair saw a light economic calendar, with the Federal Reserve officials representing the fundamental events. We've already mentioned that these speeches could turn out to be interesting, but they may not drastically change traders' sentiment. They merely reflect the Fed's sentiment, which could impact future monetary policy decisions.

EUR/USD on 5M chart

On Tuesday, there was only one trading signal on the 5-minute chart. During the mid-European trading session, the pair broke through the range of 1.0971-1.0977 and then went down by about 25 pips. Volatility was not particularly high, so it was difficult to expect substantial profits. Beginners could have earned around 20-25 pips using a short position, closing it manually closer to the evening. There were simply no other options to leave the position since the pair did not approach those levels by the end of the day.

Trading tips on Wednesday:

On the 30M chart, the pair started to correct, but we still expect it to fall since it is significantly overbought in the long term and also lacks significant reasons to enter a new rally. The key levels on the 5M chart are 1.0835, 1.0871, 1.0901-1.0904, 1.0971-1.0977, 1.1011, 1.1038, 1.1091, 1.1132-1.1145, 1.1184, 1.1241, 1.1279-1.1292. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Wednesday, no important reports or events lined up for the EU and the US. Most likely, we will see weak movements or a flat market.

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.