FX.co ★ GBP/USD: Simple trading tips for novice traders on May 31st (US session)

Analysis of transactions and tips on trading the British pound

The first test of the price of 1.2723 came when the MACD indicator went up a lot from zero, limiting the pair's upward potential. After a short period, another test of 1.2723 occurred when the MACD declined from the overbought area, which was a suitable condition for implementing scenario No. 2 for sale. As a result, the pair dropped by 10 points, and it's all over so far. There are chances to implement the morning scenario for sale. Still, for this, you need to wait for the statistics for the United States, and this is already a guessing game, so it's better to get out of positions and wait for new, more suitable conditions. As for the statistics for the United States, the main index of personal consumption expenditures – the Fed's preferred indicator for inflation – will lead to a surge in volatility. The growth of the index will return pressure on the pair, which will result in a fall in the pound and a strengthening of the dollar. It is also worth paying attention to the figures on changes in the level of income of the population, changes in the level of spending of the population, and the Chicago PMI index. Good indicators are a reason to sell the pound again. As for the intraday strategy, I plan to act based on implementing scenarios No. 1 and No. 2.

Buy signal

Scenario No. 1: I plan to buy the pound today when I reach the entry point in the area of 1.2729 (green line on the chart) to grow to the level of 1.2790 (thicker green line on the chart). In the area of 1.2790, I will exit purchases and open sales in the opposite direction (counting on a movement of 30-35 points in the opposite direction from the level). The pound's growth can be counted on today to continue the upward trend, but only after weak data on the United States. Important! Before buying, ensure the MACD indicator is above the zero mark and is just starting to grow from it.

Scenario No. 2: I also plan to buy the pound today in the case of two consecutive price tests of 1.2697 at a time when the MACD indicator will be in the oversold area. This will limit the pair's downward potential and lead to a reverse upward market reversal. We can expect an increase to the opposite levels of 1.2729 and 1.2790.

A sell signal

Scenario No. 1: I plan to sell the pound today after updating the level of 1.2697 (the red line on the chart), leading to a rapid decline in the pair. The key target of sellers will be the 1.2642 level, where I will exit sales and immediately open purchases in the opposite direction (counting on a movement of 20-25 points in the opposite direction from the level). Sellers will prove themselves in the event of a lack of buyer activity at the daily high and strong data indicators related to inflation in the United States. Important! Before selling, ensure the MACD indicator is below the zero mark and is just beginning to fall from it.

Scenario No. 2: I also plan to sell the pound today in the case of two consecutive price tests of 1.2729 at a time when the MACD indicator will be in the overbought area. This will limit the pair's upward potential and lead to a reverse downward reversal of the market. We can expect a decline to the opposite levels of 1.2697 and 1.2642.

What's on the chart:

Thin green line is the entry price at which you can buy a trading instrument.

Thick green line is the estimated price where you can place Take profit or fix profits yourself, since further growth is unlikely above this level.

Thin red line is the entry price at which a trading instrument can be sold.

Thick red line is the estimated price where you can place Take profit or fix profits yourself, since further decline is unlikely below this level.

MACD indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important. Novice forex traders need to make decisions about entering the market very carefully. Before releasing important fundamental reports, staying out of the market is best 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 must place stop orders to avoid losing the entire deposit quickly, especially if you do not use money management but trade in large volumes.

Remember that following the example I presented above, you need a clear trading plan for successful trading. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.