Analyzing Tuesday's trades:

GBP/USD on 30M chart

GBPUSD didn't show any interesting movements on Tuesday. Similar to the euro, the British pound stood in the same place for most of the day. While such market behavior is entirely logical when fundamental and macroeconomic news are scarce, it was not much different from Monday when we saw a significant drop in quotes, even though a rise would have been more logical.

As of now, we believe that the downtrend will persist, and the pound will continue to fall. However, a correction is still looming and it would be more logical for the pound to start a corrective phase that than to fall further. Perhaps the market is waiting for important events and news so it can start buying again. Crucial data on the US labor market and unemployment will be released on Friday. But for now we don't see how these reports could particularly help the pound.

GBP/USD on 5M chart

On the 5-minute chart, the pair moved sideways along the 1.2065-1.2079 range throughout the day. Naturally, more than a dozen false signals were generated in this area, making it meaningless to execute them. The most challenging aspect was identifying the flat on Tuesday. We assume that beginners may have opened a trade during the European session, but in the future, there should not have been such errors since the flat was clearly visible.

Trading tips on Wednesday:

On the 30-minute chart, GBP/USD has ended its bullish correction and can now resume its downward movement. However, we believe that the pound may trade higher for quite some time, even without specific fundamental and macroeconomic reasons behind it. We expect the pound to resume its decline in the medium term since the British currency has been rising for too long and without a solid basis. But a corrective phase would be more logical at the moment. The key levels on the 5M chart are 1.1992-1.2010, 1.2065-1.2079, 1.2143, 1.2171-1.2179, 1.2235, 1.2307, 1.2372-1.2394, 1.2457-1.2488, 1.2544, 1.2605-1.2620. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. On Wednesday, the UK will publish the final estimate of the Services PMI for September, and the US will release the ADP report and the ISM Services PMI. Market participants will keep an eye on the US data and this should be sufficient to stir some market reaction, so the volatility may gradually increase.

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.