FX.co ★ Trading plan for EUR/USD on October 3. Simple tips for beginners

Analyzing Monday's trades:

EUR/USD on 30M chart

EUR/USD faced negative pressure on Monday, which began on Friday afternoon. Perhaps some traders are slightly surprised by this fact, and we were also quite taken aback. While many factors pointed to an inevitable corrective rise, the pair unexpectedly dropped to its local lows. On one hand, this shouldn't come as a total surprise, as we continue to insist on the euro's decline in the medium-term. At the same time, the decline, with almost no retracements or bullish corrections, has been ongoing for two months now.

Manufacturing PMIs were published in the United States, the European Union, and Germany. Take note that the US data turned out to be much more optimistic and even exceeded expectations. However, this data came out almost in the evening, and the pair was already falling throughout the day. The market behavior was quite strange on Monday.

EUR/USD on 5M chart

On the 5-minute chart, Monday's movement was also far from ideal. It was not possible to catch the beginning of the movement, and we certainly did not expect a sharp downturn during the European session. Eurozone data was not exactly strong, but it also wasn't disastrous compared to the previous month's values. Two sell signals were formed around the levels of 1.0533 and 1.0517. Traders could open short positions on the first signal, and the second one suggested holding them open. There were no more signals formed until the evening, so the trade had to be closed manually. You could make a profit of about 25-30 pips on it.

Trading tips on Tuesday:

On the 30-minute chart, the pair has not definitively ended its corrective rise. In the medium term, we anticipate the euro's further decline, but in the next few days, the pair may start an upward movement (the corrective move on Thursday and Friday turned out to be too weak). The key levels on the 5M chart are 1.0391, 1.0433, 1.0465, 1.0491, 1.0517-1.0533, 1.0611-1.0618, 1.0673, 1.0733, 1.0767-1.0781, 1.0835. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Tuesday, European Central Bank Chief Economist Philip Lane and Federal Reserve official Raphael Bostic will speak. The US will release a report on Job Openings and Labor Turnover (JOLTS), which is also quite interesting and important.

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.