FX.co ★ Trading plan for GBP/USD on November 24. Simple tips for beginners

Analyzing Thursday's trades:

GBP/USD on 30M chart

The GBP/USD pair rallied upwards on Thursday, primarily driven by British rather than U.S. reports. While purchasing manager indexes (PMIs) data are not considered crucial reports, the pound was boosted by stronger-than-expected PMI data, as two of them returned above the 50 level. Therefore, traders had a good reason to buy the British pound. The GBP/USD pair updated its recent local high, and currently, there is no sign of a correction. The pound still remains near its peak value, and the uptrend is undeniable, as indicated by the ascending trendline.

GBP/USD on 5M chart

On the 5-minute chart, several trading signals were generated. During the Asian session, the price bounced off the level of 1.2488. At the opening of the European session, the price moved away from the signal formation point by only a couple of pips, making it a suitable entry point for a long position. Subsequently, the pair reached the level of 1.2544 and surpassed it. However, the pair failed to continue upward movement, and at the beginning of the U.S. session, a sell signal was formed through a consolidation below 1.2544. At this point, it was better to close long positions and open short ones. Profit amounted to about 30 pips for the first trade and none for the second.

Trading tips on Friday:

On the 30-minute chart, the GBP/USD pair continues an uptrend. The anticipation is for this to conclude. Currently, we have an ascending trend line, and overcoming it will allow us to determine the end of the uptrend. The long-awaited decline has finally started, but now it is necessary for the price to drop to the trendline. The key levels on the 5M chart are 1.2052, 1.2089-1.2107, 1.2164-1.2179, 1.2235, 1.2270, 1.2310, 1.2372-1.2387, 1.2457-1.2488, 1.2544, 1.2605-1.2620, 1.2653, 1.2688, 1.2748. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. On Friday, the UK event calendar is practically empty, and in the U.S., three business activity reports will be published. It seems that we shouldn't expect significant movements on Friday.

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, after 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 trendline 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.

Beginners 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.