Analysis of Wednesday's Trades

1H Chart of GBP/USD

On Wednesday, the GBP/USD pair continued to trade in a sideways manner. For the second consecutive day, traders had ample reason to buy the British pound, as UK macroeconomic data fully supported this outlook. On Tuesday and Wednesday, the market showed little interest in making new purchases. Last week, despite having fewer reasons to buy, the market was quite eager to engage in transactions. The current market movements seem illogical, and this week, there has been essentially no activity. The upward trend remains intact on the hourly timeframe, and the upward correction continues on the daily timeframe. Today's situation is unlikely to change, as the macroeconomic and fundamental event calendar is practically empty for both the UK and the US.

5M Chart of GBP/USD

On Wednesday, one sell signal was formed in the 5-minute TF near the 1.2613 level. After this signal, the price declined by approximately 25-30 pips, which novice traders could have capitalized on by closing the trade manually in the evening.

Trading Strategy for Thursday:

On the hourly timeframe, GBP/USD may begin a short-term downtrend; however, recent movements still appear to be part of a correction on the daily TF. From a medium-term perspective, we expect the pound to decline toward 1.1800, as this seems to be the most logical outcome. Therefore, it is just a matter of waiting for the upward correction on the daily TF to conclude.

On Thursday, the GBP/USD pair might initiate a new downward movement. The price has risen for six consecutive days without any major reasons and has since remained stagnant for three days. Nevertheless, the short-term uptrend is still intact, and the market has largely ignored reports that would typically support further purchases of the pound.

For the 5-minute TF, trading can be conducted based on the following levels: 1.2010, 1.2052, 1.2089-1.2107, 1.2164-1.2170, 1.2241-1.2270, 1.2301, 1.2372-1.2387, 1.2445, 1.2502-1.2508, 1.2547, 1.2633, 1.2680-1.2685, 1.2723, and 1.2791-1.2798. There are no significant events or reports scheduled for Thursday in the UK or the US that could increase volatility or trigger strong market movements. The only report on the agenda is US jobless claims, which is unlikely to have a substantial impact on market sentiment.

Core Trading System Rules:

1. Signal Strength: The shorter the time it takes for a signal to form (a rebound or breakout), the stronger the signal.
2. False Signals: If two or more trades near a level result in false signals, subsequent signals from that level should be ignored.
3. Flat Markets: In flat conditions, pairs may generate many false signals or none at all. It's better to 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, then manually close all trades.
5. MACD Signals: On the hourly timeframe, trade MACD signals only during periods of good volatility and a clear trend confirmed by trendlines or trend channels.
6. Close Levels: If two levels are too close (5–20 pips apart), treat them as a support or resistance zone.
7. Stop Loss: Set a Stop Loss to breakeven after the price moves 20 pips in the desired direction.

Key Chart Elements:

Support and Resistance Levels: These are target levels for opening or closing positions and can also serve as points for placing Take Profit orders.

Red Lines: Channels or trendlines indicating the current trend and the preferred direction for trading.

MACD Indicator (14,22,3): A histogram and signal line used as a supplementary source of trading signals.

Important Events and Reports: Found in the economic calendar, these can heavily influence price movements. Exercise caution or exit the market during their release to avoid sharp reversals.

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