Analysis of trades and tips for trading the British pound
The test of the 1.3055 price level occurred as the MACD indicator had just begun to move down from the zero line, confirming a good entry point for selling the pound. However, as seen on the chart, a significant downward movement has yet to occur, and it is unlikely to happen soon. The focus for the second half of the day will be on the speeches by FOMC members Neel Kashkari and Christopher Waller. However, given how many Fed officials spoke last week, the overall stance from the Fed is already clear, so today's speeches are unlikely to significantly impact the markets. For my intraday strategy, I plan to follow scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the pound if the price reaches the area around 1.3066 (the green line on the chart), aiming for a rise to the level of 1.3092 (the thicker green line on the chart). I will exit my long positions at 1.3092 and open short positions in the opposite direction, aiming for a movement of 30-35 points in the reverse direction from that level. A significant rise in the pound is unlikely today.It is important to note: Before buying, ensure that the MACD indicator is above the zero line and just beginning to rise from it.
Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.3046 level when the MACD indicator is in the oversold area. This will limit the downward risk of the pair and trigger a reversal upward. We can expect a rise to the opposite levels of 1.3066 and 1.3092.
Sell Signal
Scenario #1: I plan to sell the pound after the price breaks below 1.3046 (the red line on the chart), which should lead to a quick drop in the pair. The key target for sellers will be 1.3023, at which point I will exit my short positions and immediately open long positions (aiming for a movement of 20-25 points in the opposite direction from that level). Sellers will likely gain strength if the pair fails to hold above the daily high.It is important to note: Before selling, ensure that the MACD indicator is below the zero line and just beginning to decline from it.
Scenario #2: I also plan to sell the pound today if there are two consecutive tests of the 1.3066 level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and trigger a reversal downward. We can expect a decline to the opposite levels of 1.3046 and 1.3023.
Chart Explanation:
- Thin green line: Entry price for buying the instrument.
- Thick green line: Suggested price for placing a Take Profit order or manually locking in profits, as further growth above this level is unlikely.
- Thin red line: Entry price for selling the instrument.
- Thick red line: Suggested price for placing a Take Profit order or manually locking in profits, as further decline below this level is unlikely.
- MACD Indicator: It is crucial to pay attention to overbought and oversold zones when entering the market.
Important Notes
Beginner traders in the forex market must be very cautious when making market entry decisions. It is best to stay out of the market before major fundamental reports are released to avoid getting caught in sharp price swings. If you choose to trade during news releases, always set stop-loss orders to minimize losses. Without stop-loss orders, you could quickly lose your entire deposit, especially if you do not practice proper money management and trade with large volumes.
Remember, successful trading requires a clear trading plan, such as the one outlined above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.
