FX.co ★ GBP/USD: Simple Trading Tips for Novice Traders on October 2. Analysis of Yesterday's Forex Trades

Trade Analysis and Tips for Trading the British Pound

The test of the 1.3306 price level occurred when the MACD indicator started to move down from the zero mark, confirming the correct entry point to sell the pound. As a result, the pair fell by more than 30 pips, reaching the target level of 1.3275. I didn't buy on the rebound from this level at the end of the day, as the situation around Israel didn't allow for much hope of a rapid growth in risk assets. Yesterday's UK Manufacturing PMI data didn't help the pound, as it matched economists' forecasts, but the escalation of geopolitical tensions increased pressure on the pair, leading to a significant sell-off. Today, the summary and minutes of the Bank of England's Financial Policy Committee meeting will be released in the first half of the day, and only a very cautious tone could help the pound recover against the dollar. Otherwise, I expect further decline. I'll focus more on implementing Scenarios #1 and #2 for the intraday strategy.

Buy Signal

Scenario #1: Today, I plan to buy the pound when it reaches the entry point at 1.3296 (green line on the chart), targeting a rise to the level of 1.3334 (the thicker green line on the chart). At 1.3334, I plan to exit the purchases and open sell positions in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the level). A rise in the pound is possible, but positive news is needed. Important! Before buying, ensure that the MACD indicator is above the zero mark and beginning its upward movement.

Scenario #2: I also plan to buy the pound today in case of two consecutive tests of the 1.3269 price level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth can be expected toward the opposite levels of 1.3296 and 1.3334.

Sell Signal

Scenario #1: Today, I plan to sell the pound after it breaks below the 1.3269 level (red line on the chart), leading to a quick decline in the pair. The key target for sellers will be the 1.3219 level, where I plan to exit the sales and immediately open buy positions in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from the level). Selling the pound can align with the bearish market's continuation. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning its downward movement.

Scenario #2: I also plan to sell the pound today in case of two consecutive tests of the 1.3296 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline can be expected toward the opposite levels of 1.3269 and 1.3219.

What's on the Chart:

Thin green line: Entry price at which you can buy the trading instrument.

Thick green line: The anticipated price where you can set Take Profit or manually lock in profits, as further growth above this level is unlikely.

Thin red line: Entry price at which you can sell the trading instrument.

Thick red line: The anticipated price where you can set Take Profit or manually lock in profits, as further decline below this level is unlikely.

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

Important: Novice traders in the forex market should be cautious when making market entry decisions. It is best to stay out of the market before the release of important fundamental reports to avoid sudden exchange rate fluctuations. If you decide to trade during news releases, always set 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.

And remember, for successful trading, you need to have 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.