Analysis of Trades and Tips for Trading the British Pound
The test of the 1.2682 price level occurred when the MACD indicator started to move down from the zero mark, confirming the correct entry point for selling the pound and resulting in a drop of more than 20 points. In the afternoon, we are waiting for data on changes in retail trade volume, changes in industrial production and changes in the output of the processing industry of the United States. If the data diverges from economists' forecasts, volatility may jump, which will lead to a larger implementation of the morning sell scenario. In case of weak statistics, demand for the pound will return, and the pair will continue trading within the channel. Regarding the intraday strategy, I plan to act based on the implementation of Scenario #2.
Buy SignalScenario #1: Today, I plan to buy the pound upon reaching the entry point around 1.2692 (green line on the chart) with a target of rising to the 1.2739 level (thicker green line on the chart). Around 1.2739, I will exit the buy positions and open sell positions in the opposite direction (expecting a 30-35 point movement in the opposite direction from the level). The rise of the pound today can only be expected after weak US data. Important! Before buying, ensure the MACD indicator is above the zero mark and starting to rise.Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.2656 price level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. Growth to the opposite levels of 1.2692 and 1.2739 can be expected.Sell SignalScenario #1: Today, I plan to sell the pound after breaking the 1.2656 level (red line on the chart), leading to a quick decline of the pair. The key target for sellers will be the 1.2615 level, where I will exit the sell positions and open buy positions in the opposite direction (expecting a 20-25 point movement in the opposite direction from the level). Sellers will assert themselves in the case of unsuccessful attempts to return to the daily high. Important! Before selling, ensure the MACD indicator is below the zero mark and starting to fall from it.Scenario #2: I also plan to sell the pound today in the case of two consecutive tests of the 1.2692 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline to the opposite levels of 1.2656 and 1.2615 can be expected.
Chart Explanation:
- Thin Green Line: Entry price for buying the trading instrument.
- Thick Green Line: The anticipated price where Take Profit can be set, or profits can be manually fixed, as further growth above this level is unlikely.
- Thin Red Line: Entry price for selling the trading instrument.
- Thick Red Line: The anticipated price at which Take Profit can be set, or profits can be manually fixed, as further decline below this level is unlikely.
MACD Indicator: Following the overbought and oversold areas when entering the market is important.Important. Novice traders in the forex market need to make decisions about entering the market very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid falling into sharp fluctuations in the exchange rate. If you decide to trade during the news release, always place stop orders to minimize losses. You can quickly lose your entire deposit without stop orders, especially if you do not use money management and trade in large volumes.Remember, for successful trading, you need a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are initially a losing strategy for an intraday trader.
