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How to trade GBP/USD on October 29? Simple tips for beginners. The pound was delighted with the failed US GDP report

Analysis of previous deals:

30M chart of the GBP/USD pair

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The GBP/USD pair moves between the levels of 1.3740 and 1.3833 on the 30-minute timeframe for the eighth trading day. That is, less than a 100-point horizontal channel. Quotes left this channel for a long time, but they spend most of their time in it. And today, despite a rather strong upward movement (although weaker than for the euro/dollar pair), the quotes remained within this range. Thus, if we cannot talk about a trend in the euro currency now, then even more so for the pound. Therefore, signals from the MACD indicator should still not be considered as there is still no trend. It should also be noted that today's growth in the pound was driven solely by the US GDP report, which completely failed. Recall that the US economy grew by only 2.0% in the third quarter, although the previous quarter recorded growth of 6.7%.

5M chart of the GBP/USD pair

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The technical picture was twofold on the 5-minute timeframe today. Several trading signals were generated, which did not raise any questions, but there was also one rather difficult one for novice traders. Let's figure it out. The first buy signal was formed at the very beginning of the European trading session, when the price bounced rather imprecisely from the level of 1.3740. The upward movement after it was 23 points. Therefore, newcomers should have had time to place a Stop Loss order at breakeven. And on this order, the short position was closed, as the price returned to the level of 1.3740 and bounced off it again. Therefore, the second buy signal should also be processed with a long position. This time the price could not go up more than 20 points and once again returned to the level of 1.3740. This happened neatly by the beginning of the US session, when the publication of the GDP report was scheduled in the United States. Thus, there were two options for possible action. Or stay in a long position by setting Stop Loss, but not at breakeven, but slightly lower, since SL is set to breakeven only after passing 20 points in the right direction. Or, you can close the deal before the GDP is published, and then open a new one, as the price bounced off the 1.3740 level again, and the GDP report itself did not speak in favor of the dollar. That in the first, that in the second case, the deal eventually turned out to be profitable and made it possible to earn almost 50 points, since the price subsequently rose to the level of 1.3814 and bounced off it. The last trading signal to sell could no longer be worked out, although it turned out to be profitable and allowed us to earn about 10 more points.

How to trade on Friday:

At this time, there is still no trend on the 30-minute timeframe, and the volatility remains low. 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 1.3708, 1.3740, 1.3814, 1.3830 - 1.3833, 1.3852. We recommend trading on them on Friday. 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. Novice traders may not look into the calendar of macroeconomic events on October 29, because it is empty. Thus, volatility may become lower and movements not as good as on Thursday.

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