FX.co ★ Trading plan for EUR/USD on August 25. Simple tips for beginners

Analyzing Thursday's trades:

EUR/USD on 30M chart

On Thursday, the EUR/USD pair tried to extend its downward movement. As we can see, our expectations are still being met, as the pair is slowly but surely falling. At the moment, there is no clear trend. To be more precise, it's undoubtedly a downtrend, but it's impossible to establish a trend line or channel due to the weak movement. Only two reports were published on Thursday. The number of orders for durable goods in the US was significantly below forecast (which is bad for the dollar), but at the same time, the number of US unemployment benefit claims was also below forecast (which is good for the dollar). Cumulatively, the dollar appreciated during the day, which is not surprising to us since that's the scenario we anticipated.

EUR/USD on 5M chart

We saw plenty of trading signals on the 5-minute chart. First, the pair rebounded from the 1.0871 level, then it fell to the 1.0835 level and overcame it. Beginners should have opened a short position, and closed it at the nearest buy signal, which was formed just half an hour after surpassing 1.0835. This short position brought in about a 20-pip profit. The buy signal could have been executed with a long position, but it turned out to be false, so there was a loss of the same 20 pips. The last sell signal should not have been executed since the last two signals around the 1.0835 mark were false.

Trading tips on Friday:

On the 30M chart, the pair extends its slide. In our opinion, this is still the most justified and logical course of events. Even the Jackson Hole Symposium should not significantly influence the traders' sentiment, but a bullish correction is also possible. The key levels on the 5M chart are 1.0673, 1.0733, 1.0761, 1.0835, 1.0871, 1.0901-1.0904, 1.0936, 1.0971-1.0981, 1.1011. After initiating a trade, if the price moves 20 pips in the anticipated direction, it's prudent to set a break-even Stop Loss. European Central Bank President Christine Lagarde and U.S. Federal Reserve Chairman Jerome Powell are expected to speak later in the day at the annual economic symposium in Jackson Hole, Wyoming. Naturally, these are the two key events of the day. From the macroeconomic reports, you can highlight the University of Michigan's consumer sentiment index in the US and Germany's Q2 GDP. But these are secondary data.

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.