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How to trade GBP/USD on December 27? Simple tips for beginners. The pound died on Friday, but promised to resurrect

Analysis of previous deals:

30M chart of the GBP/USD pair


The GBP/USD pair showed volatility equal to 29 points. There is nothing surprising in this, since Friday was a half-day on the foreign exchange market, and trading stopped 3 hours earlier than usual. Christmas was celebrated all over the world on Saturday, so there was practically no trade on Friday. However, the upward trend remains for the pound, as evidenced by the uptrend line. Thus, before the pair settles below it, novice traders should consider long positions on this timeframe. However, it is completely incomprehensible how the pair will trade on New Year's week. On the one hand, a drop in volatility to almost zero will be an absolutely logical development of events. On the other hand, the pound traded quite briskly during the Christmas week. Macroeconomic statistics will be scarce, but it was also scarce this week.

5M chart of the GBP/USD pair


On a 5-minute timeframe, the movement of the pound/dollar pair on Friday does not even need any comments. The pair moved sideways all day and did not even approach the levels around which signals could form. Thus, not a single signal was generated during the day, which is just fine, since with a volatility of 29 points, there would be a lot of false signals. Perhaps this is all that can be said about the pair's movement on Friday. On Monday, the situation may be as similar as possible, since there will be no interesting macroeconomic plan again. Moreover, the holidays continue and will only end next week.

How to trade on Monday:

At this time, the upward trend is maintained on the 30-minute timeframe. Therefore, before the price settles below the trend line, preference should be given to long positions. The important levels on the 5-minute timeframe are 1.3342, 1.3366, 1.3435, 1.3470. We recommend trading on them on Monday if there is at least some movement. The price can bounce from them or overcome. 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 December 27, not a single interesting report will be published in the UK or America, not a single important event planned.

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 -