Review of Trades and Tips for Trading the British Pound
The 1.2195 price test in the first half of the day occurred when the MACD indicator had already moved significantly below the zero mark, which, in my opinion, limited the pair's downward potential. For this reason, I didn't sell. No other entry points materialized.
The lack of UK economic data today should have been a reprieve for pound buyers, but the opposite occurred. Pressure on the pound quickly returned, highlighting concerns about the state of the British economy amid uncertainty over interest rates and the incoming Trump administration's actions. In the second half of the day, investors will find themselves in an unpredictable situation without significant statistical data. This period might offer unique opportunities but also poses risks linked to changes in the news landscape following Trump's inauguration. During such moments, it is essential to closely monitor the latest developments that could impact financial markets, and exercise maximum caution when trading.
Regarding intraday strategy, I will primarily rely on the execution of Scenario #1 and Scenario #2.
Buy Signal
Scenario #1:
Today, I plan to buy the pound if the price reaches 1.2213 (green line on the chart), with a target of rising to 1.2256 (thicker green line on the chart). At 1.2256, I will exit the market and simultaneously open short positions, aiming for a 30–35 point movement in the opposite direction. Any upward momentum for the pound today may hinge on Trump's statements.Important! Before buying, ensure that the MACD indicator is above the zero line and just beginning to rise.
Scenario #2:
I also plan to buy the pound if the price tests 1.2184 twice, with the MACD indicator in the oversold zone. This will limit the pair's downward potential and trigger a market reversal upward. A rise toward the opposite levels of 1.2213 and 1.2256 can be expected.
Sell Signal
Scenario #1:
I plan to sell the pound after the price breaks below 1.2184 (red line on the chart), leading to a quick decline in the pair. Sellers' primary target will be 1.2136, where I will exit the market and simultaneously open long positions, aiming for a 20–25 point movement in the opposite direction. Sellers may become active at any time.Important! Before selling, ensure that the MACD indicator is below the zero line and just beginning to fall.
Scenario #2:
I also plan to sell the pound if the price tests 1.2213 twice, with the MACD indicator in the overbought zone. This will limit the pair's upward potential and trigger a market reversal downward. A decline toward the opposite levels of 1.2184 and 1.2136 can be expected.
Chart Details
- Thin Green Line: Entry price for buying the trading instrument.
- Thick Green Line: Estimated price to set 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: Estimated price to set Take Profit or manually secure profits, as further decline below this level is unlikely.
- MACD Indicator: Use overbought and oversold zones for market entries.
Important Notes for Beginner Forex Traders
Beginner traders must exercise extreme caution when entering the market. It is best to remain out of the market before the release of significant fundamental reports to avoid abrupt exchange rate fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Trading without stop orders can quickly deplete your account, especially if you trade large volumes without applying proper money management strategies.
Remember, successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.
The material has been provided by InstaForex Company - www.instaforex.com
