FX.co ★ Trading plan for EUR/USD on November 17. Simple tips for beginners

Analyzing Thursday's trades:

EUR/USD on 30M chart

On Thursday, EUR/USD failed to settle below the level of 1.0835. Thus, after rallying on Tuesday due to the U.S. inflation report, two days have passed during which the pair has not even started a correction. An ascending trend line was formed, which has a rather formal nature since the second extremum is not an extremum at all. It is just a convenient point for drawing a trend line. Therefore, we have an uptrend, but the trend line itself does not serve as a strong support for the price.

The dollar had a chance to edge up, but the U.S. data came out, and the pair once again resisted a decline. This time, reports on industrial production and initial jobless claims spoiled the whole picture. Both of these reports are not crucial on their own, but both showed values below expectations. Therefore, if the market was initially planning to sell the pair, it changed its decision during the U.S. trading session.

EUR/USD on 5M chart

On the 5-minute chart, several trading signals were generated. At the beginning of the European trading session, the price bounced off the level of 1.0835, and the pair started an upward movement. It surpassed the level of 1.0871, which was removed from the charts by the end of the day, and reached the level of 1.0896, which is new. Therefore, beginners could only close long positions after consolidating below the level of 1.0871. The profit was about 10 pips. You could open short positions based on this signal, but there was no major fall, so you could earn a maximum of 10 pips. The total volatility of the day was 64 pips.

Trading tips on Friday:

On the 30-minute chart, the corrective phase remains intact. It entered this phase due to the U.S. inflation data. Despite the substantial growth, a correction is still a correction. Therefore, we expect it to end and the downtrend to resume. Unfortunately, the recent U.S. reports have been very weak, which prevents the pair from restarting the downward movement. The key levels on the 5M chart are 1.0526, 1.0568, 1.0611-1.0618, 1.0668, 1.0733, 1.0767-1.0781, 1.0835, 1.0896-1.0904, 1.0936, 1.0971-1.0981, 1,1011. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Friday, the eurozone will publish its second estimate of the Harmonized Index of Consumer Prices for October, and the U.S. will release a minor report on building permits.

Basic trading rules:

1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.

2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.

4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, post which all open trades should be manually closed.

5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trend line or trend channel.

6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.

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 represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.

The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.

Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.

Beginning traders should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.