Analysis of Wednesday's Trades:

1H Chart of GBP/USD Pair

The GBP/USD pair also experienced a significant drop on Wednesday, triggered by the U.S. presidential elections. As we mentioned, there is no logical correlation between Donald Trump's possible victory and the dollar's growth. This was purely an emotional market reaction to a major fundamental event.

The pound is already recovering, and if not for the two central bank meetings today, we expect the pound to rise back to Tuesday's levels. However, the Bank of England will first announce its meeting results, which could lead to another drop in the pound. Later, the Federal Reserve will announce its decisions, potentially sparking any market reaction. No one can predict the tone that Jerome Powell and Andrew Bailey will take in advance, making it pointless to forecast the pair's movement on Thursday.

5M Chart of GBP/USD Pair

On the 5-minute time frame Wednesday, the price traded mostly sideways during the European and U.S. trading sessions. Several decent trading signals were formed around the 1.2848-1.2860 zone and the 1.2913 level. However, as mentioned earlier, trading on Wednesday was risky, as the price could easily have moved in any direction.

How to Trade on Thursday:

In the hourly time frame, the GBP/USD pair failed to start a correction after a month-long decline. In the medium term, we fully support a further drop in the pound, as this seems to be the most logical outcome. In the short term, the pound may attempt another correction, but for that to happen, it will need support from the BoE and the Fed.

For Thursday, novice traders should be prepared for any outcome, as the price could continue fluctuating in either direction.

On the 5-minute timeframe, consider trading around the following levels: 1.2791-1.2798, 1.2848-1.2860, 1.2913, 1.2980-1.2993, 1.3043, 1.3102-1.3107, 1.3145-1.3167, 1.3225, 1.3272, 1.3365. Novice traders should pay close attention to the BoE and Fed meetings and even more so to the speeches by Bailey and Powell. The first meeting will occur during the day, so the U.S. session could see the price fluctuating heavily. Increased volatility is also expected in the evening.

Basic Trading System Rules:

1. The strength of a signal is determined by the time it takes to form (whether a bounce or breakthrough of a level). The quicker the formation, the stronger the signal.
2. If two or more trades have been made near a level due to false signals, any further signals from that level should be ignored.
3. In a flat market, a pair can generate many false signals or none at all. In any case, it's best to stop trading at the first signs of a flat market.
4. Trading occurs between the start of the European and middle of the US sessions, after which all trades should be manually closed.
5. On the hourly time frame, it's recommended to trade MACD indicator signals only when there is good volatility and a trendline or trend channel confirms a trend.
6. If two levels are too close together (5 to 20 pips apart), they should be treated as support or resistance areas.
7. After the price moves 20 pips in the intended direction, set the Stop Loss to breakeven.

What's on the Charts:

Support and Resistance Levels: Levels that serve as targets for opening buys or sells. Take Profit levels can be placed around these areas.

Red Lines: Channels or trend lines that indicate the current trend and the preferred trading direction.

MACD Indicator (14,22,3): Histogram and signal line—an auxiliary indicator that can also be used as a source of signals.

Major speeches and reports (always found in the news calendar) can significantly impact currency pair movements. Therefore, it's advised to trade cautiously or exit the market during their release to avoid sharp price reversals against prior movements.

Beginners trading on the forex market should remember that not every trade will be profitable. A clear strategy and money management are the keys to success in long-term trading.