FX.co ★ Trading plan for EUR/USD on August 10. Simple tips for beginners

Analyzing Wednesday's trades:

EUR/USD on 30M chart

On Wednesday, EUR/USD showed a volatility of 45 pips. It goes without saying that with such movement, entering the market wasn't advisable at all. However, we have observed weak movements throughout the entire week. This is partly because the calendar is basically empty, as we have repeatedly pointed out. Wednesday was no exception. There was a slight upward slope, but if you look at how the pair has been moving since July 28, it becomes clear that movements are occurring between the levels of 1.0904 and 1.1038. In other words, we have a flat or sideways channel with all the resulting consequences.

EUR/USD on 5M chart

On the 5-minute chart, the movements were kind of forgettable. Throughout the day, the price fluctuated around the range of 1.0971-1.0977. It repeatedly tried to settle above this range, which beginners might have interpreted as buy signals. However, by the US session, it was clear that there would be no significant movements. Beginners could have opened one long position and had plenty of opportunities to close it at breakeven or with minimal loss. Thursday's situation may be slightly more interesting due to the US inflation report. After all, it's not just the main agenda of the week, but practically the only event of the week.

Trading tips on Thursday:

On the 30M chart, the pair continues to correct, and is generally trading in a sideways channel. 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. There are hardly any important reports this week, which is reflected in the pair's volatility. The key levels on the 5M chart are 1.0835, 1.0871, 1.0901-1.0904, 1.0936, 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 Thursday, there are no important reports lined up in the EU. The US will release data on inflation for July and initial jobless claims for the week. The inflation report has the potential to trigger significant market movements.

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.