Analysis of Monday's Trades

1H Chart of GBP/USD

On Monday, the GBP/USD pair also traded downward from the market opening. There were no clear reasons for the British currency to fall overnight, leading us to believe that the market has shown the direction it intends to take this week. Later, the U.S. released the ISM Manufacturing PMI, which showed stronger growth than expected. The accompanying S&P Business Activity Index also surpassed market expectations. As a result, during the U.S. trading session, the dollar had solid grounds for growth. Considering the overall technical and fundamental picture, it becomes evident that the pound sterling is likely to continue its decline in nearly any scenario. The only question is how long the corrective phase will last. As is well known, corrections can be quite prolonged, but this does not imply a significant rise in the pair.

5M Chart of GBP/USD

Three good trading signals were formed on the 5-minute TF on Monday. First, the price bounced from the area of 1.2680-1.2685, then overcame this area, and finally bounced (with a small error) from the level of 1.2613. The first signal can be false, but the price moved 20 pips in the desired direction, allowing the trade to close at breakeven with a Stop Loss. The second and third signals yielded profits for novice traders.

Trading Strategy for Tuesday:

The GBP/USD pair continues to show a downward bias on the hourly timeframe. We fully support the pound's decline in the medium term as we believe this is the only logical outcome. The pound sterling remains in a corrective phase, which could take some time. However, it's important to remember that the current rise in the British currency is driven purely by technical factors.

On Tuesday, novice traders can anticipate a new decline in the British pound, given that the 1.2680–1.2685 area has already been broken.

On the 5-minute TF, you can now trade at 1.2387, 1.2445, 1.2502-1.2508, 1.2547, 1.2633, 1.2680-1.2685, 1.2754, 1.2791-1.2798, 1.2848-1.2860, 1.2913, 1.2980-1.2993. The only significant event on Tuesday is the JOLTs report on job openings in the U.S. However, this report is only moderately important, as it is published with a two-month lag.

Core Trading System Rules:

1. Signal Strength: The strength of a signal is measured by the time it takes to form (a rebound or level breakthrough). The shorter the time, the stronger the signal.
2. False Signals: If two or more trades near a level result in false signals, all subsequent signals from that level should be ignored.
3. Flat Markets: Pairs may generate numerous false signals or none during a flat market. Stop trading at the first signs of a flat market.
4. Trading Hours: Open trades between the start of the European session and the middle of the US session. Close all trades manually afterward.
5. MACD Signals: Trade MACD signals on the hourly timeframe only when there is good volatility and a trend confirmed by trendlines or channels.
6. Close Levels: If two levels are close (5–20 pips apart), treat them as a support or resistance area.
7. Stop Loss: Place a Stop Loss at breakeven after the price moves 20 pips in the intended direction.

Key Chart Elements:

Support and Resistance Levels: Target levels for opening or closing positions. Take Profit orders can also be set here.

Red Lines: Channels or trendlines that show the current trend and the preferred trading direction.

MACD Indicator (14,22,3): A histogram and signal line that serve as supplementary trading signals.

Important Events and Reports: Found in the economic calendar, these can strongly influence price movements. During their release, trade cautiously or exit the market to avoid sharp reversals against the preceding trend.

Forex beginners should remember that not every trade will be profitable. Developing a clear strategy and practicing proper money management are critical for long-term success in trading.