Analysis of Trades and Tips for Trading the British Pound
The test of the 1.2738 price level occurred when the MACD indicator had moved significantly above the zero mark, which limited the pair's upward potential in the first half of the day—especially after weak UK labor market data and against the prevailing downward trend. For this reason, I did not buy the pound, and it turned out to be the right decision. In the second half of the day, the complete absence of US statistics may positively affect British pound buyers, who already showed strength during the European session. However, for increasing purchases, it is best to continue using corrections and trade within the channel. Regarding the intraday strategy, I plan to act based on Scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the pound upon reaching the entry point around 1.2748 (green line on the chart) with a target of rising to the 1.2779 level (thicker green line on the chart). At around 1.2779, 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). Upward movement of the pound today can only be expected within a small upward correction. 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 1.2731 price when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upward. We can expect a rise to the opposite levels of 1.2748 and 1.2779.
Sell Signal
Scenario #1: Today, I plan to sell the pound after updating the 1.2731 level (red line on the chart), which will lead to a quick decline in the pair. The key target for sellers will be the 1.2692 level, where I will exit the sales and immediately open purchases in the opposite direction (expecting a movement of 20-25 points in the opposite direction from the level). Sellers will show strength in case of unsuccessful attempts to return to the daily high. Important! Before selling, make sure the MACD indicator is below the zero mark and just starting to fall from it.
Scenario #2: I also plan to sell the pound today in case of two consecutive tests of the 1.2748 price when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. We can expect a decline to the opposite levels of 1.2731 and 1.2692.
Chart Legend:
Thin green line: Entry price for buying the trading instrument.
Thick green line: Estimated price for setting Take Profit or manually fixing profits, as further growth above this level is unlikely.
Thin red line: Entry price for selling the trading instrument.
Thick red line: Estimated price for setting Take Profit or manually fixing profits, as further decline below this level is unlikely.
MACD Indicator: When entering the market, it is important to consider overbought and oversold zones.
Important: Beginner traders in the Forex market need to be very cautious when making market entry decisions. It is best to stay out of the market before the release of significant fundamental reports to avoid sudden price 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 large volumes.
Remember that successful trading requires a clear trading plan, like the one I presented above. Spontaneous trading decisions based on the current market situation are initially a losing strategy for an intraday trader.
