Analysis of Friday deals:
30M pair chart GBP/USD.
The GBP / USD pair traded on a 30-minute timeframe quite understandably, but, unfortunately, only on this timeframe. The uptrend is still preserved, as the upward channel remains relevant. And, as we can see, the price bounced twice from its lower border on Thursday and Friday. If the signal on Thursday formed closer to the night and should not have been processed, then the Friday signal was formed during the day and it was possible to work with it. The rebound was very accurate, and after the formation of a buy signal, the price went up exactly 40 points, which would have been enough for the Take Profit to trigger. In any case, any open positions should have been closed before the market closed on Friday and the profit on the trade would have been only slightly smaller anyway. But I managed to make money on this signal – and this is very good. The second signal was formed by the MACD indicator, turning up (circled). However, at the time of its formation, a buy deal had already been opened, so, of course, it should not be duplicated. As for macroeconomic statistics and fundamental background, in addition to the ignored PMIs and Janet Yellen’s speech in the UK, PMIs in services and manufacturing were also published, as well as a report on retail trade. Considering the fact that all four reports were positive and exceeded their forecasted values, the pound sterling showed a very modest growth after their release, no more than 35 points, so there are doubts that the markets generally reacted to them.
5M pair chart GBP/USD.
On the 5-minute timeframe, a whole scattering of trading signals formed during the day, and the most important thing was not to get confused in all this splendor. Let’s start in order to analyze all the signals that theoretically should have been processed. At the very beginning of the European trading session, quotes rebounded from the level of 1.3865, which served as a signal for selling. This signal turned out to be false, a loss of 16 points was received on it. Further, a buy signal was generated in the form of overcoming the level of 1.3865 from the bottom up. Long positions should have been opened on it, which closed at a profit of 9 points, since a rebound followed from the nearest level of 1.3885, at which new sell orders should have been opened. However, in this case, the price could not overcome the closest level of 1.3865 and the deal had to be closed manually with a profit of 8 points. The rebound from the level of 1.3865 was a signal for new purchases, which should have been opened again, and the price again failed to overcome the level of 1.3885 and bounced off it again !!! Thus, another 8 pips of profit and a new sell signal, which should also be worked out with short positions. However, this time the signal turned out to be false, and the price did not even reach the nearest level of 1.3865. A loss of 11 points was received. After that, the level of 1.3885 should have been treated with caution, since the price at that moment worked it out three times and never managed to go down more than 20 points. Therefore, a new rebound from this level should not have been worked out, but the next sell signal – consolidation below the level of 1.3865 – should have been worked out, and it brought about 16 points of profit, since the nearest level 1.3838 was worked out, and from it it was executed again, an ideal bounce in terms of accuracy, which should have been interpreted as a signal to buy and open long positions. As a result, the price again rose to the level of 1.3865 and immediately overcame it, so the longs should have been left open, and the price eventually returned to the level of 1.3885, where long positions should have been closed at 40 pips profit, since at that time closing time was approaching. In total, on a 5-minute timeframe, it was possible to earn about 50 pips, despite the huge number of signals.
How to trade on Monday:
On Thursday, we recommend trading again according to the upward trend on the 30-minute timeframe. Thus, tomorrow it will be necessary to wait for the formation of new buy signals in the form of upward reversals of the MACD indicator or bounces from the lower border of the channel. This indicator is now near the zero level and can form potentially strong signals. In America, only the durable goods orders report is scheduled for April 26, while in the UK the news calendar is empty. On the 5 minute timeframe, the important levels are 1.3838, 1.3865, 1.3890, 1.3913 and 1.3947. The price can bounce off them or overcome them. As before, Take Profit is set at a distance of 40-50 points on a 30-minute timeframe, on a 5-minute timeframe, the target is the closest level (if it is located more than 20 points). If the nearest level is too far away, then it is recommended to maintain the deal in manual mode, tracking changes in the market. When passing 20 points in the right direction, we recommend setting Stop Loss to breakeven.
What’s on the chart:
Support and Resistance Price Levels – Levels that are targets when buying or selling. You can place Take Profit levels near them.
Red lines – channels or trend lines that display the current trend and show which direction it is preferable to trade now.
MACD indicator is a histogram and a signal line, the crossing of which is a signal to enter the market. It is recommended to use in combination with trend plots (channels, trend lines).
Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, 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 in the Forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.