Analysis of transactions Friday:
30M chart of the GBP/USD pair.
The GBP/USD pair continued its regular collapse on Friday and, during the day, set a new anti-record for the last 37 years. This time, the British pound fell to 1.1350, 60 points lower than the previous anti-record. I don't even want to talk about the reasons for such a movement since there were no grounds for a new fall in the pound on Thursday and Friday. Even the European currency, after the collapse on Tuesday, was kept from falling again. But the laws are not written for the pound, and the market is still trying only to sell the British currency. Of the important data on Friday, we can note only retail sales in the UK, which turned out to be significantly worse than forecasts, and the consumer sentiment index from the University of Michigan in the USA, which generally corresponded to forecasts. Retail sales are, of course, not the weakest indicator, but it is unlikely that they or their value could provoke a drop in the pound by 100 points. Yes, there was a certain market reaction, but it seems that the pound would have fallen even if this report had not been at all. The downward trend now does not cause any doubts, with none of the timeframes. So far, it's hard to say if this downward trend can stop.
5M chart of the GBP/USD pair.
In the 5-minute timeframe, the situation on Friday was quite difficult. There were no price benchmarks below that level since it was at least 37 years old at that time. Thus, novice traders did not even have a target level when the price dropped below it. Nevertheless, two trading signals for sale were formed in the morning and could be worked out, but it should immediately be understood that the transaction would have to be closed manually. It was possible to earn about 50 points in this position. This was followed by a rebound from the level of 1.1411, which could also be worked out, but it was impossible to earn in this position. The next three signals were also quite good and accurate, but two of them formed quite late. The main thing is that not a single false signal was formed on Friday. Thus, newcomers could make good money in any case.
How to trade on Monday:
On the 30-minute TF, the pound/dollar pair was fixed below the ascending trend line, so a downward trend was formed again. The pound's fall continues despite the euro being in one place. The lows have been updated, and so far, it does not appear that the market will stop there. The pound will also fall to price parity with the dollar at this rate. On the 5-minute TF tomorrow, it is recommended to trade by levels 1.1353, 1.1411, 1.1443, 1.1481, 1.1550, and 1.1608. When the price passes after opening a deal in the right direction, 20 points should be set to stop loss at breakeven. No important events are scheduled for Monday in the UK and the US. But on Wednesday and Thursday, the Fed and the Bank of England will hold meetings, so we are waiting for a very interesting and volatile week, during which the British currency may update its lows for 37 years a couple more times.
Basic rules of the trading system:
1) The strength of the signal is calculated by the time it takes to generate the signal (rebound or overcome the level). The less time it takes, the stronger the signal.
2) If two or more trades were opened near a certain level on false signals, then all subsequent signals from this level should be ignored.
3) In a flat, any pair can form many false signals or not form them at all. But in any case, it is better to stop trading at the first signs of a flat.
4) Trade transactions are opened between the beginning of the European session and the middle of the American session, when all transactions must be closed manually.
5) On a 30-minute TF, signals from the MACD indicator can be traded if there is good volatility and a trend, which is confirmed by a trend line or a trend channel.
6) If two levels are located too close to each other (from 5 to 15 points), they should be considered a support or resistance area.
What's on the chart:
Price support and resistance levels are the levels that are the targets when opening purchases or sales. Take Profit levels can be placed near them.
Red lines are channels or trendlines that display the current trend and show which direction is preferable to trade now.
The MACD indicator(14,22,3) is a histogram and a signal line – an auxiliary indicator that can also be used as a signal source.
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 to avoid a sharp price reversal against the previous movement.
To trade in the forex market, beginners should remember that every transaction cannot be profitable. Developing a clear strategy and money management is the key to success in trading for a long period.
