Analyzing Thursday's trades:
EUR/USD on 30M chart
EUR/USD showed a volatility of 47 pips on Thursday. The euro clearly saw little movement, with markets closed for the Thanksgiving holiday in the US. During the European session, the purchasing manager indexes (PMIs) had some sort of influence on the pair, but then this completely "died out" in the second half of the day. No significant changes were observed in the technical picture.
PMIs were published in Germany and the EU. All six indexes slightly exceeded forecast values, and the euro edged up. However, traders quickly moved away from the reports since it couldn't be considered essential, and its values were not resonant.
EUR/USD on 5M chart
On the 5-minute chart, two trading signals were generated. First, the pair exceeded the range of 1.0896-1.0904, then bounced off it. In the first case, the pair rose by 5 pips, and in the second, 16 pips. Therefore, beginners should have only opened one long position, as the buy signals simply duplicated each other. After moving in the intended direction by 15 pips, a Stop Loss should be set to breakeven, and the deal was closed successfully.
Trading tips on Friday:
On the 30-minute chart, the pair continues a corrective trend. This trend, reinvigorated by last week's U.S. inflation report, 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, 1.0568, 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 Friday, European Central Bank President Christine Lagarde will speak, Germany will publish the final GDP value for the third quarter, and the U.S. will release business activity indices. Theoretically, Lagarde's speech is the most agenda of the day, followed by the U.S. PMIs, though they are of little significance.
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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