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Forex Traiding

Analytics and trading signals for beginners. How to trade the EUR / USD currency pair on May 5? Analysis of Tuesday’s deals. Preparation


Analysis of Tuesday’s deals: 30M chart of the EUR / USD pair. The EUR / USD currency pair on Tuesday resumed the downward movement, which we had predicted earlier. In a more global than 30-minute plan, the price is correcting at this time against the monthly uptrend. Thus, the downward movement was predictable. However, on the 30-minute timeframe, it looks like a downtrend, a downtrend line has formed. Thus, there are now two trend lines at the disposal of novice traders, which formally allow trading both up and down. During today, only one signal from the MACD indicator was generated – to buy. However, from our point of view, the indicator turned up too low again, so this signal should be ignored. There were no other signals during the day, as well as not a single important fundamental event or macroeconomic report. 5M chart of the EUR / USD pair. Now let’s take a look at the 5 minute timeframe. Here, as usual, the picture is much more interesting. I would like to make a reservation right away that, in order not to get confused, we put circles on the illustration only in those places where it was necessary to open positions according to the formed signals. The rest of the signals should have been ignored and now let’s figure out why. The first sell signal was formed at the then still actual level of 1.2023 – the price fixed below it. Therefore, novice traders had to open short positions with the target of the level of 1.1999. Before this target there were only about 20 pips, and there was a clear rebound from the level of 1.1999, so here short positions should have been closed in profit. A rebound from the level of 1.1999 is a buy signal, it should also be worked out with the target of 1.2023. Again, the target was very close, so it was also possible to work with Take Profit, which, however, would not have worked. Further, two signals were generated near the level of 1.2023, one for buying and one for selling, each of which turned out to be false and brought newcomers a loss of 10 points. Thus, all that newbies could earn on the first two trades, they lost on the second two trades. Not the best day to trade. Note that volatility was very low during the part of the day when it was recommended to trade – only about 40 pips. Since false signals were generated twice near the level of 1.2023, this level lost its relevance and all subsequent signals should not have been worked out. How to trade on Wednesday: On Wednesday, the price may continue to move down and start moving up. There are two trend lines now, so the price can bargain between them, and if it overcomes one of them, then the movement can get a new impulse. Thus, tomorrow it is possible to trade on signals from the MACD indicator, but now it is rather problematic to say in which direction the pair will move. Therefore, it is better that tomorrow novice traders trade on a 5-minute timeframe from the levels 1.1990, 1.1999, 1.2044, 1.2056 and 1.2076 for a rebound or overcoming in both directions. Take Profit, as before, is set at a distance of 30-40 points. Stop Loss – to breakeven when the price passes in the right direction by 15-20 points. Recall that it is best to trade using the most accurate and clear signals, and ignore inaccurate ones. On Wednesday, the US will publish a relatively important report on changes in the number of employees in the private sector from the ADP, as well as the index of business activity in the ISM services sector. This data can influence the market sentiment. The European Union will publish a less significant index of business activity in the services sector Markit. What’s on the charts: Price levels of support and resistance are 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 (14,22,3) – 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. – Source: InstaForex

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