FX.co ★ GBP/USD: Simple trading tips for novice traders on May 7th (US session)

Trade analysis and tips for trading the British pound

There was no testing of the levels I indicated due to the low market volatility in the first half of the day. Fairly decent data came out regarding activity in the UK construction sector, which allowed us to avoid and stop the sell-off observed in the pound since the second half of yesterday. However, this did not lead to entry points. Figures on the RCM/TIPP Economic Optimism Index and consumer credit volume are unlikely to strongly influence the direction of the pound and the dollar during American trading, so I will stick to trading more within the sideways channel. As for the intraday strategy, I plan to act based on scenario No. 2, as I do not expect strong movements.

Buy signal

Scenario No. 1: Today, I plan to buy the pound when the entry point reaches around 1.2558 (green line on the chart), with a target of rising to the level of 1.2609 (thicker green line on the chart). At 1.2609, I will exit purchases and open sales in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the level). Today, the rise of the pound can be expected only after weak US statistics and breaking the daily maximum. Important! Before buying, ensure the MACD indicator is above the zero mark and just starting to rise from it.

Scenario No. 2: I also plan to buy the pound today in case of two consecutive price tests at 1.2531, when the MACD indicator is in the oversold area. This will limit the downward potential of the pair and lead to a reverse market turnaround upwards. Expect a rise to the opposite levels of 1.2558 and 1.2609.

Sell signal

Scenario No. 1: Today, I plan to sell the pound after the level of 1.2531 is updated (red line on the chart), leading to a rapid decline in the pair. The key target for sellers will be the level of 1.2491, where I will exit sales and immediately open purchases in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from the level). Sellers will manifest themselves in case of inactivity around the daily maximum and strong US data. Important! Before selling, make sure that the MACD indicator is below the zero mark and just starting to decrease.

Scenario No. 2: I also plan to sell the pound today in case of two consecutive price tests at 1.2558, when the MACD indicator is in the overbought area. This will limit the upward potential of the pair and lead to a reverse market turnaround downwards. Expect a decline to the opposite levels of 1.2531 and 1.2491.

What's on the chart:

Thin green line - entry price at which the trading instrument can be bought;

Thick green line - expected price, where Take Profit can be placed or profits can be fixed independently, as further growth above this level is unlikely;

Thin red line - entry price, at which the trading instrument can be sold;

Thick red line - expected price, where Take Profit can be placed, or profits can be fixed independently, as further decline below this level is unlikely;

MACD indicator. When entering the market, following the overbought and oversold zones is important.

Important. Beginner traders in the Forex market must carefully decide about entering the market. It is best to stay out of the market before important fundamental reports are released to avoid being caught in sharp exchange rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You must place stop orders to lose your entire deposit quickly, especially if you do not use money management and trade with large volumes.

And remember, for successful trading, it is necessary to have a clear trading plan similar to the one presented above. Spontaneous trading decisions based on the current market situation are initially a losing strategy for an intraday trader.