stop loss

The best traders follow exactly what is happening in the market intelligently and are rarely surprised by events. They also use the many tools available to better manage their activities. Indicators are often such tools. The ones that attract the most attention of traders are presented in this article. Currency Strength Indicator Currency trading is fundamentally different from trading other assets as you are exposed to not one but two different assets in the form of two different currencies. Therefore, forex trading requires the development of special skills. One of the most important is measuring the strength and weakness of different currencies. This is where the currency strength indicator comes in handy. It is an indicator used for technical analysis to obtain information on the strength of a given currency against a basket of other 7 currencies as each currency has a certain degree of strength against other currencies. CSI is based on an algorithm that takes price and volume into account. The basic working principle of the CSI is to serve as a filter in decision making. This allows you to quickly determine whether, for example, the US dollar is strengthening or weakening. Based on real-time data on the current market, we can judge which currency is overbought and which is oversold. In general, it is important to compare market sentiment across different time frames when using the CSI. Another equally important issue is to remember that the strength of a given currency is always determined for a given time frame. For example, the Euro may show strength today, but be weak on a monthly basis. The CSI is used as additional confirmation and is not sufficient on its own to make decisions. Even though it does not provide 100% accurate signals, it is very useful in determining the trend direction. Generally, we can distinguish two types of CSI in terms of visuals. In the case of the first one, each currency is represented by a line moving on a uniform field, therefore all currencies are arranged in a series of different lines. In the second type of indicator, each currency is shown as a bar divided into units (squares) - the more units, the stronger the currency. Break Even Point The break-even point for a trade or investment is determined by comparing the market price of an asset to the original cost; the break even point is reached when the two prices are equal. In corporate accounting, the break-even point formula is determined by dividing the total fixed costs associated with production by the revenue per individual unit minus the variable costs per unit. When calculating the BEP for our transaction, we can consider it as a profitability indicator for our investment. If the price of an asset has increased so much that we are above the break-even point, it means that it is profitable. However, if we are below BEP, it means that the position is at a loss at the moment. Many traders use the BEP to determine where they place their stop loss when the value of their investment is temporarily higher than at the time of purchase. Thanks to this, they ensure that the position will not be closed with a loss. Means for company The break-even point is the achievement of a situation in the enterprise in which the revenues fully balance the costs and do not exceed them. In practice, this means a situation in which the company does not bring either profit or loss. Stop loss Stop loss is a specific type of pending stop order. The order is tied to a specific position and closes it when the price goes down or up and reaches the Stop Loss level. Buy trades defend a sell stop order as a stop loss. Conversely, sell trades defend a buy stop order as a stop loss. Source: investopedia.com

EUR/USD On Tuesday, the euro went through a correction, defined by the convergence with the Marlin oscillator. The price once again tested the target level of 1.0738 and the embedded line of the descending channel. The signal line of the oscillator has entered its own descending channel.     According to the main scenario, the price can now consolidate below the support level of 1.0692 and continue moving towards 1.0620, which is the lower embedded line of the price channel. The alternative scenario is simple - after settling above 1.0738, a test of the target resistance at 1.0804 is possible. This would extend the correction.     On the four-hour chart, the price has returned below the MACD indicator line after a false breakout above it. The Marlin oscillator has moved into the negative territory after briefly staying in the positive area. The trend is bearish.  

On Friday, the GBP/USD pair fell after strong US data. The first half of the day saw a similar flat movement as the euro, while the second half witnessed a decline. However, the GBP/USD pair maintains an uptrend, with the price still above the Ichimoku indicator lines. Therefore, it could trade higher this week, despite the complete absence of fundamental and macroeconomic reasons for such a move. We still believe that both the pound and the euro should be falling. It is possible that they corrected last week so that it can continue moving downward.       The trading signals for the pound were almost identical to those for the euro. During the European trading session, the price rebounded from the level of 1.2520 but failed to move in the right direction even by 20 pips. It was advisable to close the long position before the release of US data. Later, two sell signals formed near the same level, which traders could use to open a short position. Long positions were not recommended at that time as the reports clearly favored the dollar. Subsequently, the price dropped to the level of 1.2445, where the shorts should have been closed. The profit from them amounted to around 60 pips.     According to the latest report, non-commercial traders opened 1,100 long positions and closed 500 short ones. The net position increased by 600 and remained bullish. Over the past 9-10 months, the net position has been on the rise despite bearish sentiment. The pound is bullish against the greenback in the medium term, but there have been hardly any reasons for that. We assume that a prolonged bear run has begun. COT reports suggest a bullish continuation. However, we can hardly explain why the uptrend should go on.   Both major pairs are in correlation now. At the same time, the positive net position on EUR/USD shows the end of the uptrend. Meanwhile, the net position on GBP/USD is neutral. The pound has gained about 2,300 pips. Therefore, a bearish correction is now needed. Otherwise, a bullish continuation would make no sense even despite the lack of support from fundamental factors. Overall, non-commercial traders hold 57,000 sell positions and 70,300 long ones. We do not see the pair extending growth in the long term.     In the 1-hour time frame, the pair has started an upward movement, and even after Friday's decline, it remains above the Ichimoku indicator lines. The pound doesn't exactly have grounds to buy the pound, which remains heavily overbought. However, take note that the market has the right to trade regardless of the fundamental and macroeconomic backdrop.   For now, let's consider that we have seen a strong correction last week and expect a revival of the downward movement. On June 5, trading levels are seen at 1.2269, 1.2349, 1.2429-1.2445, 1.2520, 1.2589, 1.2666, 1.2762. The Senkou Span B line (1.2408) and the Kijun-sen line (1.2434) lines may also generate signals when the price either breaks or bounces off them.   A Stop Loss should be placed at the breakeven point when the price goes 20 pips in the right direction. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance which can be used for locking in profits.   Today, both the UK and the US will release their respective Services PMIs for May. The UK data can influence traders' sentiment, as well as the US ISM data. Of course, it would be nice for the values of these data to deviate from the forecast, and the stronger the deviation, the stronger the market reaction may be.   Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. The Kijun-sen and Senkou Span B lines are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.  

The EUR/USD pair sharply fell on Friday. Volatility was high, but the day can be roughly divided into two parts: before Nonfarm Payrolls (NFP) and after. Prior to the release of US data, the market was relatively flat. This is not surprising as there were no significant events or reports in the first half of the day.     After the release of the NFP data, the pair sharply fell, which was logical, as the data exceeded expectations. Moreover, it exceeded forecasts twice as much, which speaks for itself: the US labor market is in excellent condition, despite the high interest rates set by the Federal Reserve.     The increase in the unemployment rate by 0.3% was no longer of particular importance. Trading signals were not the best due to the morning flat. During the European trading session, the pair rebounded from the level of 1.0762 thrice and failed to move up even by 10 pips each time.     After the release of the NFP data, the pair initially started to decline, then returned to the level of 1.0762, and then it fell again. Since the NFP data was very strong, it was reasonable to consider only trades that anticipated the dollar's growth, in other words, selling opportunities.     The last sell signal resulted in a profit of about 40 pips. The morning trade (which was only one) could have been closed at breakeven due to the same flat market conditions.   The COT report for May 30 was delivered on Friday. Over the past nine months, COT data has been in line with developments in the market. The net position (second indicator on the chart) has been on the rise since September 2022. The euro started to show strength approximately at the same time. Currently, the net non-commercial position is bullish and keeps growing further. Likewise, the euro is bullish.   Notably, we may assume by the extremely bullish net position that the uptrend may soon stop. The first indicator shows that, and the red and green lines are far away from each other, which is usually a sign that the end of the trend might be nearing.   The euro attempted to go down several months ago, but those were just minor pullbacks. In the reporting week, long positions of non-commercial traders decreased by 8,200 and short positions fell by 200. The net position dropped by 8,000. The number of long positions exceeds that of short ones by 165,000, a rather big gap. A correction or a new downtrend has started. So, it is clear that the pair will be bearish even without COT reports.     In the 1-hour time frame, the pair surpassed the descending trendline again, clearly indicating its intention to form an uptrend. This should be a correction, and afterwards the downward movement should resume. From a fundamental perspective, there are still no grounds for the pair to rise, but technically it may correct this week.   However, the price is below the Ichimoku indicator lines again, so it may fall again. On June 5, trading levels are seen at 1.0537, 1.0581, 1.0658-1.0669, 1.0762, 1.0806, 1.0868, 1.0943, 1.1092, as well as the Senkou Span B line (1.0785) and the Kijun-sen line (1.0708). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. Signals could be made when the price either breaks or bounces from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction.   In case of a false breakout, it could save you from possible losses. Today, both the EU and the US will release their respective Services PMIs for May. You should pay attention to the US ISM services, since it is more important than "ordinary" business activity indexes. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe.   They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.    

1H chart of GBP/USD In the 1-hour time frame, the pair started an upward movement and just as quickly ended it. The market insists on buying the pound, which remains significantly overbought and unjustifiably high. However, take note that the market has the right to trade regardless of the fundamental and macroeconomic backdrop. For now, we will consider the strong correction that we've seen last week and expect a revival of the downward movement.   On June 7, trading levels are seen at 1.2269, 1.2349, 1.2429-1.2445, 1.2520, 1.2589, 1.2666, 1.2762. The Senkou Span B line (1.2395) and the Kijun-sen line (1.2455) lines may also generate signals when the price either breaks or bounces off them. A Stop Loss should be placed at the breakeven point when the price goes 20 pips in the right direction. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance which can be used for locking in profits. On Wednesday, there are no important events scheduled in either the UK or the US. Therefore, there will be no specific events to react to during the day, and volatility could be low again, and we can't expect trend-driven movements either.     Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. The Kijun-sen and Senkou Span B lines are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.  

GBP/USD accelerates on Friday. Yesterday, there were no significant events lined up in the UK, but the US data turned out to be slightly weaker than expected. Reports on unemployment claims and industrial production were worse than traders' expectations, but there were also reports that exceeded forecasts (retail sales).   Therefore, if the US data were not in favor of the dollar, it was not to the extent that it would fall by 140 pips in a day. On the other hand, the European Central Bank held its meeting, the results of which had no relation to the pound. In addition, the market had already expected its results a couple of weeks ago, if not more. And despite all that the pound still rallied, even more strongly than the euro. Thus, the pound extends its illogical growth. The first sell signal near the 1.2659 level turned out to be false. The price could not move in the right direction even by 20 pips, so the short position closed with a small loss at the beginning of the US trading session when a buy signal appeared. Later, the pair confidently rose to the 1.2762 level and surpassed it. No sell signals were formed for the rest of the day, so traders could close their long positions anywhere.     The profit from this trade amounted to at least 100 pips. COT report: According to the latest report, non-commercial traders closed 5,200 long positions and 4,500 short ones. The net position dropped by 700 but remained bullish. Over the past 9-10 months, the net position has been on the rise despite bearish sentiment. In fact, sentiment is now bullish, but it is a pure formality. The pound is bullish against the greenback in the medium term, but there have been hardly any reasons for that. We assume that a prolonged bear run may soon begin even though COT reports suggest a bullish continuation. However, we can hardly explain why the uptrend should go on.     The pound has gained about 2,300 pips. Therefore, a bearish correction is now needed. Otherwise, a bullish continuation would make no sense even despite the lack of support from fundamental factors. Overall, non-commercial traders hold 52,500 sell positions and 65,000 long ones. We do not see the pair extending growth in the long term. 1H chart of GBP/USD In the 1-hour chart, maintains a bullish bias. The ascending trend line serves as a buy signal but I believe that further growth of the British currency is groundless. The pound sterling has been climbing for too long and downward corrections are short-lived. Judging by the technical indicators, we have an uptrend.   Yet, it is hard to find the reasons which may push it higher. Nevertheless, the market has no logical reason to buy at the moment. On June 16, trading levels are seen at 1.2349, 1.2429-1.2445, 1.2520, 1.2589, 1.2666, 1.2762, 1.2863, 1.2981-1.2987. The Senkou Span B line (1.2472) and the Kijun-sen line (1.2638) may also generate signals when the price either breaks or bounces off them. A Stop Loss should be placed at the breakeven point when the price goes 20 pips in the right direction. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance which can be used for locking in profits. On Friday, there are no important events lined up in the UK, while the US will only release the University of Michigan Consumer Sentiment Index. Since there are no significant events today, we might witness a slight bearish correction. However, the pound can still rise since it doesn't need any logical reason behind it.

GBP/USD edged down on Monday. This is a classic depiction of how the pound is currently being traded. When it rises, the movement is sharp, but when it falls, it only edges down. It can rise even without macroeconomic or fundamental reasons, but it is reluctant to fall, even when there are corresponding causes.     For example, yesterday there was an excellent opportunity for a correction based on pure technicals. The pair could have fallen simply because it was overbought. However, instead of a significant correction, we saw the pair reverse its course by just 30 pips amidst a low-volume trading day. Throughout the day, neither the UK nor the US had any important events or reports. Speaking of trading signals, there was nothing notable about it. The pair did not even come close to any significant levels or lines.   This is probably a good thing because weak movements bordering on a flat can lead to false signals. Traders have been fortunate with the euro, but there simply hasn't been any signal for the pound. COT report: According to the latest report, non-commercial traders closed 5,200 long positions and 4,500 short ones. The net position dropped by 700 but remained bullish. Over the past 9-10 months, the net position has been on the rise despite bearish sentiment. In fact, sentiment is now bullish, but it is a pure formality. The pound is bullish against the greenback in the medium term, but there have been hardly any reasons for that. We assume that a prolonged bear run may soon begin even though COT reports suggest a bullish continuation. However, we can hardly explain why the uptrend should go on.   The pound has gained about 2,300 pips. Therefore, a bearish correction is now needed. Otherwise, a bullish continuation would make no sense even despite the lack of support from fundamental factors. Overall, non-commercial traders hold 52,500 sell positions and 65,000 long ones. We do not see the pair extending growth in the long term. 1H chart of GBP/USD In the 1-hour chart, GBP/USD maintains a bullish bias.   The ascending trend line serves as a buy signal but I believe that further growth of the British currency is groundless. The pound sterling has been climbing for too long and downward corrections are short-lived. Judging by the technical indicators, we have an uptrend. Yet, it is hard to find the reasons which may push it higher. However, it is naturally not advisable to sell the pair without proper signals. The market can sustain the trend even without a "fundamental" basis.   On June 20, trading levels are seen at 1.2349, 1.2429-1.2445, 1.2520, 1.2589, 1.2666, 1.2762, 1.2863, 1.2981-1.2987. The Senkou Span B (1.2494) and Kijun-sen (1.2724) may also generate signals when the price either breaks or bounces off them. A Stop Loss should be placed at the breakeven point when the price goes 20 pips in the right direction. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance which can be used for locking in profits.   There are no significant events lined up in the UK, and only a few secondary events in the US. We believe that volatility may edge up today, as the Bank of England's meeting and the UK inflation report will be published later this week. The market may start to anticipate and react to this data in advance.  

The EUR/USD pair has been going through low volatility and volume. The chart above may suggest that the pair moved quite actively, but in reality, there was only a 53-pip range between the day's high and low. Thus, we have witnessed the third consecutive boring and uninteresting day. Yesterday's only notable report was the number of approved construction permits in the United States. The report turned out slightly better than expected, which helped strengthen the dollar to some extent. But what kind of reaction are we talking about?   A mere 20 pips, which is not interesting at all and does not affect the current technical picture. The pair continues to correct sluggishly downward against an empty calendar. Yesterday, one signal was even formed. During the European trading session, the pair rebounded from the level of 1.0943 and then moved down by the aforementioned 50 pips. However, the price could not reach the target level by the end of the day, and no further signals were formed. Therefore, it was advisable to manually close the sell trade anywhere closer to the evening. It was possible to earn around 30 pips from it, which is not bad considering the current volatility. COT report: On Friday, a new COT report for June 6 was released. In the last 9 months, COT reports have fully corresponded to what is happening on the market. The chart above clearly shows that the net position of big traders (the second indicator) began to grow again in September 2022.   At the same time, the euro resumed an upward movement. The net position of non-commercial traders is bullish. The euro is trading at its highs against the US dollar. I have already mentioned that a fairly high value of the "net position" indicates the end of the uptrend. The first indicator also signals such a possibility as the red and green lines are very far from each other. It often occurs before the end of the trend. The euro tried to start falling a few months ago but there was only a pullback. During the last reporting week, the number of long positions of the "Non-commercial" group of traders decreased by 5,700 and the number of short positions rose by 1,500. The number of long positions is higher than the number of short ones. This is a very large gap. The number of long positions is 59,000 higher than short ones.     The difference is more than three times. The correction has begun. Yet, it may not be a correction but the start of a new downtrend. At this time, it is clear that the pair is likely to resume a downward movement without COT reports. 1H chart of EUR/USD In the 1-hour chart, the pair is trying to start an uptrend but there are no drivers for growth. Last week, there were many events that bolstered its rise. However, in the medium term, there are still no reasons to go long. Technical indicators signal an uptrend.   It would be better not to sell the pair now. We need to wait at least for consolidation below the trend line and the target level. On June 21, trading levels are seen at 1.0581, 1.0658-1.0669, 1.0762, 1.0806, 1.0868, 1.0943, 1.1092, 1.1137, as well as the Senkou Span B line (1.0766) and the Kijun-sen line (1.0889) lines. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels.   Signals could be made when the price either breaks or bounces from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. Several ECB and Fed officials are scheduled to deliver speeches today. However, traders are likely to ignore their statements. Federal Reserve Chairman Jerome Powell will deliver an important speech in Congress. The main focus is on that.  

On Friday, the GBP/USD pair did not even try to extend its downward movement. Take note that there was an ascending trend line during the entire bearish correction period (already two weeks), and the British currency does not seem like it is going to fall anytime soon.   At the same time, a new descending trend line has formed on the hourly chart, causing the pair to be trapped between two trend lines. On Friday, the UK released its GDP report. If it did provoke a market reaction, it was minimal, as its value for the first quarter fully coincided with the forecasts. There were no significant reports in the US, and secondary data such as personal income and spending, as well as the Personal Consumption Expenditures Price Index with the Consumer Sentiment Index, were unlikely to add pressure on the dollar. Especially considering that the USD has started falling in the morning. Therefore, we tend to believe that the nature of the movements were more technical. It was almost impossible to predict the upward reversal in the morning. On the hourly chart, a new support area was formed at 1.2598-1.2605, from which the pair rebounded. Currently, it is located between the Senkou Span B and Kijun-sen lines, and has also tested the trend line. There's a high probability of a rebound and a new downtrend, but the movement is currently volatile. The only signal was formed at the beginning of the US session when the price broke through the Ichimoku indicator lines and the level of 1.2693. It was not the best signal, and traders could only gain 10 pips. But it's better than false signals or losses.     COT report: According to the latest report, non-commercial traders opened 2,800 long positions and closed 2,500 short ones. The net position increased by 5,300 in just a week and continues to grow. Over the past 9-10 months, the net position has been on the rise. We are approaching a point where the net position has grown too much to expect further growth. We assume that a prolonged bear run may soon begin, even though COT reports suggest a bullish continuation. It is becoming increasingly difficult to believe in it with each passing day. We can hardly explain why the uptrend should go on. However, there are currently no technical sell signals. The pound has gained about 2,500 pips. Therefore, a bearish correction is now needed. Otherwise, a bullish continuation would make no sense. Overall, non-commercial traders hold 52,300 sell positions and 104,400 long ones. Such a gap suggests the end of the uptrend. We do not see the pair extending growth in the long term.     1H chart of GBP/USD In the 1-hour chart, GBP/USD maintains a bullish bias, although it is correcting at the moment. The ascending trend line serves as a buy signal. However, we still believe that the British currency is overvalued and should fall in the medium term. The fundamental backdrop for the pound is getting weaker. The dollar also lacks a fundamental advantage but has already lost 2,500 pips over the past 10 months and requires a correction. On July 3, trading levels are seen at 1.2349, 1.2429-1.2445, 1.2520, 1.2598-1.2605, 1.2693, 1.2762, 1.2863, 1.2981-1.2987. The Senkou Span B (1.2737) and Kijun-sen (1.2674) may also generate signals when the price either breaks or bounces off them. A Stop Loss should be placed at the breakeven point when the price goes 20 pips in the right direction. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance which can be used for locking in profits. On Monday, manufacturing PMIs are scheduled for release in both the UK and the US. All the reports, except for the US ISM, will be released in the second estimate, which is unlikely to surprise traders. However, the ISM index may show an unexpected value and, accordingly, stir some market reaction.   Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals.   The Kijun-sen and Senkou Span B lines are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.  

1H chart of GBP/USD In the 1-hour chart, GBP/USD maintains a bullish bias, although it is correcting at the moment. The ascending trend line serves as a buy signal. However, we still believe that the British currency is overvalued and should fall in the medium term. The pair overcame the downward trend line, so the pound has an opportunity to show another round of the uptrend. So far, it has not crossed the Senkou Span B line, but it is the last line of defense on the way to a new uptrend. On July 5, trading levels are seen at 1.2349, 1.2429-1.2445, 1.2520, 1.2598-1.2605, 1.2693, 1.2762, 1.2863, 1.2981-1.2987. The Senkou Span B (1.2726) and Kijun-sen (1.2662) may also generate signals when the price either breaks or bounces off them.   A Stop Loss should be placed at the breakeven point when the price goes 20 pips in the right direction. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance which can be used for locking in profits. On Wednesday, services PMI numbers for the UK in the second estimate for June will be released. Not the most significant indicator. We have the FOMC minutes for release in the US, which rarely contains important information. The pair will likely go through low volatility, but as we can see, the lack of news does not prevent the pound from continuing to rise against the USD.       Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. The Kijun-sen and Senkou Span B lines are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.  

Analyzing Friday's trades: EUR/USD on 30M chart   The EUR/USD pair took a breather and traded flat on Friday. Let's refresh our memory a bit: the pair has been rising all week, in most cases without any apparent reasons, and on Friday, it failed to show even a bit of a correction! That's all you need to know about the current movement. The demand for the euro is as strong as it is unfounded. Throughout the week, the market desperately reacted to the inflation report. At least, that's the only assumption we can make because there were no other important events or reports. Moreover, the reaction to the US inflation began as early as Monday (two days before its release), and it continued on Thursday (one day after the release). Even the FOMC meetings had a much weaker impact. Nevertheless, the uptrend persists, supported by the trend line. Therefore, it would be wise not to consider short positions in the medium term until the price firmly breaks below this line (with the exception of intraday trading with strong signals).   EUR/USD on 5M chart   Several entry signals materialized on the 5-minute chart, which is completely normal for a flat market. Throughout the day, the price crossed the distant level of 1.1228 five or six times. Naturally, in a flat market, all trading signals turned out to be false. Beginners could only execute the first two signals. In the first case, the price moved in the right direction for about 15 pips, which was enough to set a stop loss at breakeven, but not in the second case. Thus, the day turned out to be not the most successful, but what could one expect when volatility was only 40 pips and there were no important reports or events?   Trading tips on Monday:   On the 30M chart, the pair continues to form an uptrend. On Friday, there was an excellent opportunity for a slight correction with an empty event calendar, but the market did not take advantage of it. Therefore, the euro may extend its upward movement for the rest of the week. The key levels on the 5M chart are 1.0871, 1.0901, 1.0932, 1.0971-1.0977, 1.1038, 1.1091, 1.1132, 1.1184, 1.1279-1.1292, 1.1330, 1.1367. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Monday, there are no important reports or events lined up in the US or the euro area, so we can see any type of movement. It is highly likely to be a flat, but we may well see both an increase and a correction.   Basic trading rules: 1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal. 2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored. 3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading. 4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually. 5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel. 6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.   How to read charts: Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them. Red lines are channels or trend lines that display the current trend and show which direction is better to trade. MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines. Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, 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 should remember that every trade cannot be profitable. The development of a reliable strategy and money management are the key to success in trading over a long period of time.