Analysis of Trades and Trading Tips for the British Pound
Testing the 1.2965 level occurred when the MACD indicator had already moved well above the zero line, limiting the pair's upward potential—especially given the absence of significant fundamental data. For this reason, I did not buy the pound. A second test of this level shortly afterward found the MACD indicator already in the overbought zone, creating an opportunity to implement Scenario #2 for selling. However, as you can see on the chart, the best outcome was exiting at breakeven, as Friday's trend did not continue. With no U.S. statistics expected in the second half of the day, trading will likely remain within the range, with a slight advantage for pound buyers. For my intraday strategy, I'll primarily focus on implementing Scenario #2.
Buy Signal
Scenario #1: Today, I plan to buy the pound upon reaching an entry point around 1.2992 (green line on the chart) with a target rise to the 1.3034 level (thicker green line on the chart). At 1.3034, I'll exit my buy positions and open sell orders in the opposite direction (anticipating a 30-35 point reversal from that level). The pound may continue its morning upward trend today. Note: Before buying, ensure that the MACD indicator is above the zero line and just beginning its upward movement.
Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.2959 level while the MACD indicator is in the oversold zone. This setup may limit the pair's downward potential and lead to an upward market reversal. A rise toward the opposite levels of 1.2992 and 1.3034 is possible.
Sell Signal
Scenario #1: I plan to sell the pound after it breaks below the 1.2959 level (red line on the chart), leading to a quick drop in the pair. Sellers' main target will be 1.2917, where I'll exit my sell positions and switch to a buy position (anticipating a 20-25 point reversal from that level). Sellers may step in after an unsuccessful break of last Friday's high. Note: Before selling, ensure that the MACD indicator is below the zero line and just starting its downward movement.
Scenario #2: I also plan to sell the pound today if there are two consecutive tests of the 1.2992 level while the MACD indicator is in the overbought zone. This setup will limit the pair's upward potential and may trigger a downward reversal. A decline toward the opposite levels of 1.2959 and 1.2917 can be expected.
Chart Guide:
- Thin Green Line – entry price to buy the trading instrument.
- Thick Green Line – target price for setting take-profit or manually closing positions to secure profits, as further growth above this level is unlikely.
- Thin Red Line – entry price to sell the trading instrument.
- Thick Red Line – target price for setting take-profit or manually closing positions to secure profits, as further decline below this level is unlikely.
- MACD Indicator – use the overbought and oversold zones to guide market entries.
Important Notes for Beginner Forex Traders:
New traders should be extremely cautious when entering the market. It's best to stay out of the market before major fundamental reports to avoid sudden price fluctuations. If you choose to trade during news releases, always set stop orders to minimize losses. Trading without stop orders can lead to significant losses, especially if you lack a solid money management strategy and trade in large volumes.
Remember, successful trading requires a clear plan, like the one outlined above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for intraday traders.
