Trade Analysis and Tips for Trading the British Pound
The test of the price at 1.2788 occurred when the MACD indicator had moved significantly above the zero mark, which limited the pair's upward potential at the end of the trading day. For this reason, I did not buy the pound and was proven right. There was no significant movement. Today, there are no important statistics from the UK, and the housing price index data is unlikely to cause a spike in market volatility. Therefore, I will focus on the second half of the day and the important US labor market data, preferring to trade within a sideways channel during the European session. For the intraday strategy, I will rely more on the implementation of Scenario #2.
Buy Signal
Scenario #1: Today, I plan to buy the pound when the entry point reaches around 1.2797 (green line on the chart) with a target of rising to the level of 1.2825 (thicker green line on the chart). Around 1.2825, I plan to exit purchases and open sales in the opposite direction (expecting a move of 30-35 pips in the opposite direction from the level). Counting on the pound's rise today will only work within a small upward correction before the US data. Important! Before buying, make sure the MACD indicator is above the zero mark and 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 1.2780 when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reverse market turnaround upwards. Expect growth to the opposite levels of 1.2797 and 1.2825.
Sell Signal
Scenario #1: I plan to sell the pound today after updating the level of 1.2780 (red line on the chart), which will lead to a quick decline of the pair. The key target for sellers will be the level of 1.2755, where I plan to exit sales and immediately open purchases in the opposite direction (expecting a move of 20-25 pips in the opposite direction from the level). Selling the pound is only advisable after an unsuccessful consolidation around the daily high. Important! Before selling, make sure the MACD indicator is below the zero mark and 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 1.2797 when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reverse market turnaround downwards. Expect a decline to the opposite levels of 1.2780 and 1.2755.
On the chart:
Thin green line – entry price for buying the trading instrument.
Thick green line – the expected price where you can place Take Profit or manually secure profits, as further growth above this level is unlikely.
Thin red line – entry price for selling the trading instrument.
Thick red line – the expected price where you can place Take Profit or manually secure profits, as further decline below this level is unlikely.
MACD indicator – When entering the market, it is important to be guided by overbought and oversold zones.
Important. Beginner traders in the forex market should be very cautious when making decisions to enter the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid sudden exchange rate fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade in large volumes.
Remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.
