Analyzing trades on Wednesday:

GBP/USD on 30M chart

GBP/USD did not show any interesting movements for most of the day, and so did EUR/USD. The pound only started to sharply fall in the evening, which again is difficult to correlate with at least one of the reports, which were published during the day. Bear in mind that the European inflation report had nothing to do with the pound, while there were only two contradictory reports released in the US. The GDP report turned out to be stronger than forecasts and the previous estimate, and the ADP report was much weaker than expected. So not only did the market not react immediately to these reports, but it also selectively ignored one of them? All in all, no matter which way you look at it, the movement on Wednesday was very strange. Despite the fact that we continue to expect a strong bearish correction, and in the afternoon there was just a downward movement, we still can't say that the market is trading logically and reasonably now. After settling below the trend line, the bearish correction got a technical basis, but the dollar's growth is not strong yet. However it is still present, which is already a good thing.

GBP/USD on M5 chart

On the 5-minute chart, two or three trading signals were formed near 1.1950-1.1957 during the European trading session. All these signals duplicated each other, so a long position should have been opened only once. Subsequently, the pound passed in the right direction of 60 points, so beginners could close in profit. However, the pair did not reach the target level at 1.2064. Closer to the evening, the quotes started falling and it crossed the 1.1950-1.1957 area. However, this sell signal was formed quite late and the price was already 60 pips down when it was formed. Therefore, you shouldn't have used it. Moreover, it is very difficult to connect it with the macroeconomic statistics, which was published in the US. If the market reacted to it, it was very selective and done so with delay by an hour and a half.

Trading tips on Thursday:

The pair started to form a downtrend on the 30-minute time frame, which I have been expecting. Although the pair continues to move quite illogically, at least we are finally witnessing a downward movement, which I have mentioned for so long. So I expect the pound to keep falling. On the 5-minute chart on Thursday, it is recommended to trade at the levels 1.1716, 1.1793, 1.1863-1.1877, 1.1950-1.1957, 1.2064-1.2079 and 1.2141. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. On Thursday, the UK will publish a business activity index for the manufacturing sector, while in the US, the ISM business activity indexes and data on personal income and expenditures of the American population will be published. I believe that investors will react to the ISM data.

Basic rules of the trading system:

1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is.

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

3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement.

4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually.

5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels.

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

The MACD indicator (14, 22, and 3) 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 patterns (channels and trendlines).

Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.