How to Trade the GBP/USD Currency Pair on October 28? Simple Tips and Trade Analysis for Beginners

Monday Trade Review:

1H Chart of the GBP/USD Pair

On Tuesday, the GBP/USD pair also traded upward, albeit with minimal volatility. The mere fact that the British pound is rising is already positive, as in recent weeks the market has completely ignored macroeconomic and fundamental factors that, in fact, suggested the pair's growth. We previously mentioned that the key issue is the flatness on the daily timeframe, which causes weak, illogical movements on lower timeframes. However, the flat will not last forever, so one must be prepared for a new, powerful movement. Given the current conditions, such a movement can only be expected in one direction – north. There were no significant events or reports in the UK or the U.S. on Monday, but last Friday had more than enough, with trading behavior being precisely the same as yesterday.

5M Chart of the GBP/USD Pair

On the 5-minute timeframe, several trading signals were formed on Monday, but all were false. As we have stated many times, when volatility is extremely low, it is difficult to expect profits from trading signals, levels, or areas. The pound has overcome the area of 1.3329-1.3331 and may continue to rise, but it has only attempted to surpass this area for the fifth time.

How to Trade on Tuesday:

On the hourly timeframe, the GBP/USD pair has started forming a new upward trend, which could signal the beginning of a new cycle of the global upward trend. However, the British currency has been falling for more than a week. As we mentioned, there are no grounds for a prolonged rise of the dollar, so in the medium term, we expect movement only to the north. Currently, market volatility remains extremely low, and the price is still reluctant to move upward.

On Tuesday, the GBP/USD pair may continue its upward movement, but no news is expected today. The breakout of the area of 1.3329-1.3331 could have been used to open long positions, but it occurred overnight and not on the first attempt.

On the 5-minute timeframe, current levels to trade include 1.3102-1.3107, 1.3203-1.3211, 1.3259, 1.3329-1.3331, 1.3413-1.3421, 1.3466-1.3475, 1.3529-1.3543, 1.3574-1.3590, 1.3643-1.3652, 1.3682, and 1.3763. On Tuesday, there are no significant reports or events scheduled in either the UK or the U.S. Therefore, it is likely we will again see weak volatility and chaotic movements today.

Basic Rules of the Trading System:

1. The strength of a signal is assessed based on the time it took to form the signal (bounce or breakout of a level). The less time it took, the stronger the signal.
2. If two or more trades based on false signals were opened around a specific level, all subsequent signals from that level should be ignored.
3. In a flat market, any pair can generate a plethora of false signals or none at all. In any case, at the first signs of a flat, it is better to stop trading.
4. Trades are opened during the time period between the start of the European session and the middle of the American session, after which all trades should be closed manually.
5. On the hourly timeframe, trading signals from the MACD indicator are preferably used only when there is good volatility and a trend confirmed by a trend line or trend channel.
6. If two levels are located too close to each other (5 to 20 pips), they should be treated as an area of support or resistance.
7. After moving 20 pips in the correct direction, a Stop Loss should be set to breakeven.

What's on the Charts:

• Price support and resistance levels are targets for opening buy or sell positions. Take Profit levels can be placed around them.
• Red lines indicate channels or trend lines, showing the current trend and the preferred trading direction.
• The MACD indicator (14,22,3) – histogram and signal line – is a supplementary indicator that can also be used as a source of signals.

Important speeches and reports (always found in the news calendar) can significantly affect the movement of the currency pair. Therefore, trading during their release should be done with utmost caution, or one should exit the market to avoid sudden price reversals against the preceding movement.

Beginners trading in the Forex market should remember that not every trade can be profitable. Developing a clear strategy and money management are the keys to success in trading over the long term.