FX.co ★ Trading plan for GBP/USD on August 21. Simple tips for beginners

Analyzing Friday's trades:

GBP/USD on 30M chart

On Friday, the GBP/USD pair moved sideways in a horizontal channel, where it has been for several weeks now. This means that the pound is currently in a flat trend. Yes, it has done well in reaching certain levels. On Thursday, the price perfectly bounced off the 1.2787 level, and on Friday, it did so from 1.2688, which makes it somewhat easier for traders. However, this does not negate the fact that the pair is still in a sideways channel.

A significant amount of important reports were released in the UK, but not a single report managed to change the attitude of traders of the pound. In other words, between technique and macroeconomics, the technique won. Almost all reports from Great Britain turned out to be weak, but the pound did not experience particular pressure on itself during the week. On Friday, there was another disappointing report on retail sales, but the pound only depreciated locally. Therefore, for now, it is necessary to wait for the flat to end.

GBP/USD on 5M chart

A large number of trading signals were formed on the 5-minute chart, but let's start with the fact that the nature of the pair's movement again left much to be desired. But what can we expect from intraday movements if the price has been stuck in a sideways channel for three weeks now? Fortunately, good signals were formed around the levels of 1.2748 and 1.2688, but all signals around the 1.2715 level, which was removed at the end of the day, turned out to be false. Beginners could have earned approximately 50-60 points on Friday, mainly thanks to a rebound from the 1.2688 level.

Trading tips on Monday:

On the 30-minute chart, the GBP/USD pair continues to move in a sideways channel. However, we insist that the pound fall, as we still believe it is overbought and unreasonably expensive. However, the market has taken a break for now, so either trade within the sideways channel or wait for the flat to end. The key levels on the 5M chart are 1.2499, 1.2538, 1.2605-1.2620, 1.2653, 1.2688, 1.2748, 1.2787-1.2791, 1.2848-1.2860, 1.2913. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. No important events lined up for the UK and the US, so the pair will likely move sideways 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.