Analyzing Tuesday's trades:

GBP/USD on 30M chart

GBP/USD started a downward spiral on Tuesday. We can't say it was triggered by any particular event or report, because there were neither the former nor the latter in the UK or the US. So we saw a downward movement based on nothing. At the same time, the euro continued to grow. Perhaps, the market participants began to lock in their profits on positions, as they prepare for the meetings of the Federal Reserve and the Bank of England. As we said earlier, it is hard to tell right now what decisions the central banks are going to take, and there is about a 50-50 chance that both of them will raise the rate by 0% or 0.25%. That's why the market is wary that there will be "surprises," trying to leave the market early. There is no trend line or channel right now. The pair keeps swinging, which is why the direction changes before we can form a trend line. But even in those cases when we manage to put a trend line on the chart, it becomes irrelevant very quickly.

GBP/USD on 5M chart

On the 5-minute chart, the pound was in the area of 1.2245-1.2260 for a long time, but eventually started a trend movement. Two sell signals were formed in the specified area. The first one should have been filled by a short position, but the pair was unable to go down even 20 pips. Thus, when the second signal was formed, traders should have simply stayed in the short positions, since there was no reason to close it (there was no buy signal). After that the pair started falling and by the end of the day, it was near 1.2179, from which it bounced back perfectly, making it possible to close the short positions with about 40 pips profit. Beginners could also take the buy signal, but it was formed late enough. Take note that the volatility of European and US sessions was 80 pips.

Trading tips on Wednesday:

On the 30-minute chart, GBP/USD continues to trade in the classic "swings", but already more in the long term. It is not obvious on the current chart, but when moving to the higher charts it becomes clear as day. Therefore we should keep in mind that the movements in the near future may be absolutely random. In the next two days it will be volatile, because two central banks will meet. On the 5-minute chart, it is recommended to trade at the levels 1.1924, 1.1992-1.2008, 1.2065-1.2079, 1.2143, 1.2171-1.2179, 1.2245-1.2260, 1.2337-1.2343, 1.2387, 1.2444-1.2471. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. On Wednesday, Great Britain will release its inflation report for February, which is very important and interesting in itself. And it may influence the decision which will be taken by the BoE on Thursday. And in the evening, there is the US central bank meeting and Fed Chairman Jerome Powell's speech.

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.