Analyzing Friday's trades:
EUR/USD on 30M chart
EUR/USD exhibited a volatility of 55 pips on Friday. The pair saw little volatility for two consecutive days, making it extremely difficult to trade. We would like to remind you that the lower the volatility, the higher the probability of a flat, false signals, and lack of profit. Even if it was possible to open a trade on a good signal, the price cannot reach the target level. Therefore, low volatility is the trader's first enemy. On Friday, the pair continued to gradually rise, which was not based on anything. From macroeconomic events, we can only highlight the business activity indices in the US and the GDP in Germany. Traders brushed off all four PMI data, so the reaction to them, if any, was minimal. At the moment, the uptrend persists, so it doesn't matter if the current upward movement is logical or not. It continues regardless.
EUR/USD on 5M chart
On the 5-minute chart, two trading signals were generated. Initially, the pair rebounded from the 1.0904 level for almost the entire European trading session and then reached the 1,0936 level and surpassed it. Thus, in the first case, beginners could open a long position, and in the second case, they could hold it. The trade could be closed manually anywhere above the 1.0936 level. The profit on it was about 25 pips, which is quite good for the current volatility.
Trading tips on Monday:
On the 30-minute chart, the pair continues a corrective trend. This trend remains a correction despite the pair's sharp rally. Therefore, the anticipation is for this correction to conclude and the downward trend to resume. Currently, an ascending trend line is present, which will help determine the end of the correction. The key levels on the 5M chart are 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, 1.1043, 1.1091. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Monday, we can only highlight the speech of European Central Bank President Christine Lagarde. Even then, this event is interesting only to the extent that it is. All recent speeches by Lagarde have passed without providing the market with useful and important information.
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.
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