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FX.co ★ GBPUSD: Simple trading tips for beginner traders on October 31st (US session)

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Forex Analysis:::2023-10-31T12:07:30

GBPUSD: Simple trading tips for beginner traders on October 31st (US session)

Trade Analysis and Tips for Trading the British Pound

The first test of the price at 1.2158 occurred when the MACD indicator was in the overbought zone, which clearly limited the pair's further downward potential. The second test at 1.2158 coincided with a drop in the MACD from the overbought zone, which appeared to be a good entry point to sell the pound. However, the signal was not realized, and the pair continued to rise. All of this resulted in losses. Ahead, we have data on the US real estate market and the consumer confidence indicator. Modest figures are expected, indicating a decline that could trigger another wave of pound growth against the US dollar. Changes in the housing price index in the 20 largest cities in S&P/Case-Shiller and the Chicago PMI index will not significantly affect the intraday market direction, so they can be overlooked. I will act based on the realization of scenario #1.

GBPUSD: Simple trading tips for beginner traders on October 31st (US session)

Buy Signal

Scenario #1: Today, you can buy the pound when the entry point reaches around 1.2212 (green line on the chart), with the target of reaching 1.2257 (a thicker green line on the chart). At around 1.2257, I recommend exiting the purchases and opening sales in the opposite direction, targeting a 30-35 point move in the opposite direction from the level. Pound growth can be expected to continue the morning uptrend, especially if weak statistics come out from the US. Important! Before buying, make sure that the MACD indicator is above the zero level and has just started to rise from it.

Scenario #2: You can also buy the pound today if there are two consecutive tests of the price at 1.2180 while the MACD indicator is in the oversold zone. This will limit the downward potential of the pair and lead to a market reversal upward. Expect an increase to the opposite levels of 1.2212 and 1.2257.

Sell Signal

Scenario #1: Selling the pound today can only be done after the level of 1.2180 is updated (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 1.2139, where I recommend exiting sales and opening purchases in the opposite direction, targeting a 20–25 point move in the opposite direction from the level. Pressure on the pound will increase in the case of good consumer confidence figures in the US. Important! Before selling, make sure that the MACD indicator is below the zero level and has just started to decline from it.

Scenario #2: You can also sell the pound today if there are two consecutive tests of the price at 1.2212 while the MACD indicator is in the overbought zone. This will limit the upward potential of the pair and lead to a market reversal downward. Expect a decrease to the opposite levels of 1.2180 and 1.2139.

GBPUSD: Simple trading tips for beginner traders on October 31st (US session)

On the chart:

Thin green line – entry price for buying the trading instrument.

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

Thin red line – entry price for selling the trading instrument.

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

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

Important. For novice traders in the forex market, it is essential to be very cautious when making entry decisions. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price swings. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you are not using proper risk management and are trading with large volumes.

And remember that for successful trading, you need to have a clear trading plan, similar to the one presented above. Making spontaneous trading decisions based on the current market situation is initially a losing strategy for intraday traders.

Analyst InstaForex
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