Analyzing Wednesday's trades:

EUR/USD on 30M chart

EUR/USD is still in the same 1.0587-1.0657 horizontal channel as before. Therefore, the technical picture has not changed. Anyway, who expects a trend movement to start after two weeks of a pre-holidays flat? As usual, there was no macroeconomic or fundamental backdrop, so traders had nothing to react to. So we have to wait for the flat to end, the end of the holidays, but keep in mind that the flat may persist for some time after the New Year.

EUR/USD on M5 chart

Recently, novice traders have been lucky with the euro/dollar pair. The fact is that the price has been within the horizontal channel for two weeks, but there were also false and unprofitable signals. The price prefers to reach the upper or lower limit of the channel, and there is nothing between it. Therefore, in general, all open positions were either closed with profit or with Stop Loss at breakeven. Wednesday was not an exception. At the beginning, the pair rebounded from 1.0657, but managed to go down only 12 pips, so the short position remained open. Further, it returned to the area of 1.0657-1.0663, from which it bounced again and then it nearly managed to go to the nearest target level of 1.0607. Therefore, the position should have been closed manually, the profit was about 20 pips. Not much, but not bad for a total flat.

Trading tips on Thursday:

EUR/USD is still in the 1.0587-1.0657 horizontal channel on the 30-minute chart. Thus, in order to count on any kind of trend movement, the pair should leave this range. The direction of the movement will be determined by which limit the pair will cross. So far, it has more chances to cross the lower limit. On the 5-minute chart, it is recommended to trade at the levels of 1.0465-1.0483, 1.0536, 1.0587-1.0607, 1.0657-1.0663, 1.0697, 1.0736, 1.0787, 1.0806. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. There are no important reports or events scheduled in the EU or the US, so I don't expect the flat to end.

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.