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FX.co ★ Trading plan for EUR/USD on August 23. Simple tips for beginners

Trading plan for EUR/USD on August 23. Simple tips for beginners

Analyzing Tuesday's trades:

EUR/USD on 30M chart

Trading plan for EUR/USD on August 23. Simple tips for beginners

The EUR/USD pair tried to extend its emerging upward movement on Tuesday but it suddenly collapsed. All the recent local lows were updated, so there is no reason to expect a new uptrend in the short term. The euro stopped falling at the 1.0835 level, but at this rate, it might even surpass this mark.

Take note that there were no significant reasons behind the USD's growth on Tuesday. There was only one speech by Federal Reserve official Thomas Barkin and one report on US existing home sales. Neither the first event nor the second could have triggered a nearly 100-point growth in the dollar, not to mention that the pair started to fall before these events. However, overall, we fully support the US dollar's gains, as we still consider it oversold and unreasonably cheap against the euro.

EUR/USD on 5M chart

Trading plan for EUR/USD on August 23. Simple tips for beginners

There were several trading signals on the 5-minute chart, all of them were pretty good since we observed a nice trend throughout the day. Initially, the pair rebounded from the 1.0904 level, forming a buy signal. After this signal, the price rose by 17 pips, enough to set a Stop Loss at breakeven. A sell signal was then formed around the 1.0901-1.0904 area, making it possible for beginners to earn a decent amount. The price fell to the 1.0835 level during the US session, from which it rebounded with perfect precision. Thus, the short position yielded a profit of 45 points. The rebound from the 1.0835 level could also be used to open positions, and long positions brought in another 10 pips of profit.

Trading tips on Wednesday:

On the 30M chart, the pair extends its slide. In our opinion, this is still the most justified and logical course of events. We don't see any macroeconomic background that would be capable of changing market sentiment to bullish in the near future. There are hardly any important reports this week. The key levels on the 5M chart are 1.0733, 1.0761, 1.0835, 1.0871, 1.0901-1.0904, 1.0936, 1.0971-1.0981, 1.1011, 1.1043, 1.1091. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Wednesday, PMIs in the services and manufacturing sectors will be published in Germany, the European Union, and the US. While they are not the most critical indicators, they can still provoke some market reaction.

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.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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