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How to trade GBP/USD on October 28? Simple tips for beginners. The pound has been swinging all day

Analysis of previous deals:

30M chart of the GBP/USD pair

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The GBP/USD pair managed to break out of its horizontal channel at 1.3740-1.3833 on the 30-minute timeframe, in which it spent at least five days. However, this did not make it easier, since there is still no trend movement, as well as a trend line or channel. Today the price went below the 1.3740 level twice, but each time it returned to this level and eventually settled above it. Thus, compared to yesterday, nothing has changed. There is still no trend, therefore, it is not recommended to consider signals from the MACD indicator. Only one more or less significant report was published during the day, which in fact turned out to be quite neutral and did not provoke any reaction from traders. Thus, there were movements today, but, first, it was weak (the total volatility of the day is only 70 points), and secondly, it was a classic "swing", when the price is constantly changing the direction of movement.

5M chart of the GBP/USD pair

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The technical picture is also very eloquent on the 5-minute timeframe. Novice traders can take a good look at the swing that we talked about above. They started in the middle of the European trading session, when the first sell signal was formed. The price broke through the level of 1.3740, so it was necessary to open short positions, although the nearest target was quite close - only 32 points. Nevertheless, in conditions of low volatility, this is even good. A few hours later, the price dropped to the specified level and bounced off it, which served as a signal to close short positions and open longs. The profit on the first trade was 12 points. At the same moment, long positions should have been opened. The price then returned to the level of 1.3740 and bounced off it twice very imprecisely. Thus, at this point, it was necessary to close longs at 15 points profit and open new short positions. The price returned to the level of 1.3708 again and bounced off it again: we close the shorts and open new long positions. Profit - another 11 points. The last long position could have closed even above the level of 1.3740, since this time there was no rebound from it. Therefore, a long position could be left open until the evening and closed manually at a profit of about 30 points. Thus, despite the flat, today we managed to make good money on the pound, only about 68 points.

How to trade on Thursday:

At this time, there is no trend on the 30-minute timeframe, and the volatility is low again. Since there is no trend, we do not advise beginners to follow the signals on the MACD indicator for some time. For these signals to be relevant, a trend movement is required. The important levels on the 5-minute timeframe are 1.3688, 1.3708, 1.3740, 1.3814. We recommend trading on them on Thursday. The price can bounce off them or overcome them. As before, we set Take Profit at a distance of 40-50 points. At the 5M TF, you can use all the nearest levels as targets, but then you need to take profit, taking into account the strength of the movement. When passing 20 points in the right direction, we recommend setting Stop Loss to breakeven. On October 28, novice traders can turn their attention only to the US GDP report for the third quarter. The extent to which the actual value does not correspond to the predicted one will be of particular importance.

Basic rules of the trading system:

1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal.

2) If two or more deals were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored.

3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading.

4) Trade deals are opened in the time period between the beginning of the European session and until the middle of the US one, when all deals must be closed manually.

5) On the 30-minute TF, using signals from the MACD indicator, you can trade only 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), then they should be considered as an area of support or resistance.

On the chart:

Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.

The MACD indicator consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and 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 on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.

The material has been provided by InstaForex Company - www.instaforex.com