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Forex Analysis & Reviews: How to trade GBP/USD on November 24, 2022. Simple trading tips and analysis for beginners
time 23.11.2022 11:42 PM
time Relevance up to, 24.11.2022 06:28 PM

Analyzing Wednesday's trades:

GBP/USD on 30M chart

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GBP/USD moved up and rose by 150 pips. Again, it is hard for us to explain why the pair rallied on Wednesday, when the British data was as weak as the ones from the US. However, the pound was moving sideways in the morning, and then it suddenly grew in the afternoon for some reason. Anyway, we still believe that both European currencies have been showing quite illogical movement lately. The British pound at least has technical reasons for such a movement, since it did not settle below the ascending trend line. Moreover, in the last few days it was moving exactly along this line and even rebounded from it several times. That's why the pair had some technical reasons to grow. But from a fundamental point of view. By the way, the US reports were not that bad. Yes, indexes of business activity either declined or remained unchanged (i.e. below 50), but, for instance, the number of durable goods orders increased more than expected. The number of new home sales also rose more than experts had expected...

GBP/USD on M5 chart

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The 5-minute chart shows that the day's trading signals were quite good, despite the fact that the growth was absolutely illogical. There were two buy signals when the pair rebounded from the level of 1.1877 during the European session. After the first one the price went up about 20 pips, which made it possible for us to set the Stop Loss to Breakeven, which was then used to close the deal. After the second one, the pair started a strong rally, crossed the area of 1.1950-1.1957, and then the level of 1,1994. Therefore, beginners could gain significant profit on this long position, not less than 120 pips. The position should have been closed manually closer to the evening. Congratulations on the great profits.

Trading tips on Thursday:

The pound/dollar pair is still rising on the 30-minute time frame, which continues to be supported by the ascending trend line. We still believe that the pair will fall in the next week or two, so we are waiting for the pair to head below this line. If it happens, then the pound can finally fall in a logical manner. However, so far it has not happened, the technical grounds are on the pound's side, and so it can still rise. On the 5-minute chart on Thursday, it is recommended to trade at the levels of 1.1550, 1.1608, 1.1648, 1.1716, 1.1793, 1.1863-1.1877, 1.1950-1.1957 and 1.1994. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. On Thursday, there are no important events or reports in the UK or the US. Nevertheless, we have a clear uptrend and the market can still buy the pair, despite the lack of good reasons to do so. Volatility is also up, so it could be high again.

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.

Paolo Greco,
Analytical expert of InstaForex
© 2007-2022
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