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FX.co ★ GBP/USD: Simple trading tips for novice traders for May 3rd (US session)

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Forex Analysis:::2024-05-03T10:14:02

GBP/USD: Simple trading tips for novice traders for May 3rd (US session)

Trade analysis and advice on trading the British pound

The test of the price at 1.2560 in the first half of the day coincided with the moment when the MACD indicator surged significantly above the zero mark, limiting the further upward potential of the pair – especially ahead of the release of important US statistics. For this reason, I did not buy it. The PMI activity data for the UK services sector suited pound buyers, but there was no significant upward movement, leaving everything for the American session. In the second half of the day, figures on the unemployment rate, nonfarm payrolls change, average hourly earnings change, and ISM services purchasing managers' index are expected. Strong reports will help the dollar as they maintain the chances of high inflation, which the Fed is still actively combating. If the data disappoints traders and turns out worse than economists' forecasts – I sell the dollar and buy the pound. Regarding the intraday strategy, I plan to act based on the realization of Scenario #1, even despite the MACD indicator readings, as I expect a strong and directional movement.

GBP/USD: Simple trading tips for novice traders for May 3rd (US session)

Buy Signal

Scenario #1: Today, I plan to buy the pound when the entry point reaches around 1.2565 (green line on the chart), with a target for growth to the level of 1.2609 (thicker green line on the chart). At around 1.2609, I will exit the purchases and open sales in the opposite direction (expecting a movement of 30–35 points in the opposite direction from the level). Pound growth can be expected today only after weak US statistics and a breakthrough of the daily maximum. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.

Scenario #2: I also plan to buy the pound today in case of two consecutive tests of the price at 1.2537 when the MACD indicator is in oversold territory. This will limit the downward potential of the pair and lead to a reverse market turn upward. Expect growth towards the opposite levels of 1.2565 and 1.2609.

Sell Signal

Scenario #1: I plan to sell the pound today after updating the level of 1.2537 (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the level of 1.2491, where I will exit the sales and also immediately open purchases in the opposite direction (expecting a movement of 20–25 points in the opposite direction from the level). Sellers will show themselves in case of a lack of activity around the daily maximum and strong US data. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.

Scenario #2: I also plan to sell the pound today in case of two consecutive tests of the price at 1.2565 when the MACD indicator is in overbought territory. This will limit the upward potential of the pair and lead to a reverse market turn downward. Expect a decline towards the opposite levels of 1.2537 and 1.2491.

GBP/USD: Simple trading tips for novice traders for May 3rd (US session)

Chart Elements:

Thin green line – entry price, at which the trading instrument can be bought.

Thick green line – the expected price where Take Profit can be set, or profits can be fixed independently, as further growth above this level is unlikely.

Thin red line – entry price at which the trading instrument can be sold.

Thick red line – the expected price where Take Profit can be set, or profits can be fixed independently, as further decline below this level is unlikely.

MACD indicator. When entering the market, it is important to refer to overbought and oversold zones.

Important. Beginner traders in the forex market need to be very cautious when making decisions to enter the market. It is best to stay out of the market before the release of important fundamental reports to avoid being caught in sharp exchange rate fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. You need to set stop orders to avoid losing your entire deposit, especially if you do not use money management and trade with large volumes.

And remember, for successful trading, it is necessary to have a clear trading plan similar to the one I presented above. Spontaneous trading decisions based on the current market situation are initially a losing strategy for an intraday trader.

Analyst InstaForex
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