GBPUSD: simple trading tips for beginner traders for January 19. Review of yesterday's forex trades

[Ben Graham]

Review of trades and trading tips for the British pound

The price test at 1.3395 occurred at a moment when the MACD indicator was only beginning to move down from the zero line, which confirmed the correct entry point to sell the pound. As a result, the pair fell by 25 pips.

The dollar rose against the pound last Friday. Traders reacted to US data showing a recovery in the manufacturing sector, which reduced concerns about a slowdown in economic growth. Federal Reserve officials, in their remarks, emphasized that the current rate level is adequate to support economic growth and achieve inflation targets. They also noted labour-market stabilization and strong consumer demand as factors supporting the economy. These statements strengthened market expectations that the Fed will pause the rate-cut cycle.

Since there are no economic data from the UK today, attention is focused on developments around Greenland. The US interest in Greenland is explained not only by its rich mineral resources, including rare metals needed for clean-energy development, but also by its strategic position, allowing control of sea routes. Another geopolitical conflict could again negatively affect the global economy, and traders are already reacting.

Regarding the intraday strategy, I will rely more on implementing scenarios No. 1 and No. 2.

Scenarios for buying

Scenario No. 1: I plan to buy the pound today upon reaching an entry point around 1.3412 (green line on the chart) with a target to rise to 1.3445 (the thicker green line on the chart). Around 1.3445, I intend to exit long positions and open shorts in the opposite direction (expecting a 30–35-pip move in the opposite direction from that level). Expect pound growth today only as a continuation of the morning trend. Important! Before buying, make sure the MACD indicator is above the zero line and is only just starting to rise from it.

Scenario No. 2: I also plan to buy the pound today if two consecutive tests of 1.3389 occur while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward reversal. One can expect a rise to the opposite levels 1.3412 and 1.3445.

Scenarios for selling

Scenario No. 1: I plan to sell the pound today after the 1.3389 level is broken (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be 1.3354, where I intend to exit shorts and immediately open longs in the opposite direction (expecting a 20–25-pip move in the opposite direction from that level). Pound sellers can assert themselves at any moment. Important! Before selling, make sure the MACD indicator is below the zero line and is only just starting to fall from it.

Scenario No. 2: I also plan to sell the pound today if two consecutive tests of 1.3412 occur while the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a market reversal downward. One can expect a decline to the opposite levels 1.3389 and 1.3354.

What is on the chart

• Thin green line — entry price at which you can buy the instrument
• Thick green line — suggested Take Profit price or level at which to manually lock in profit, since further rise above this level is unlikely.
• Thin red line — entry price at which you can sell the instrument
• Thick red line — suggested Take Profit price or level at which to manually lock in profit, since further decline below this level is unlikely.
• MACD indicator — when entering the market, it is important to follow the overbought and oversold zones
• Important notes: Beginner forex traders must be very cautious when deciding to enter the market. It is best to be out of the market before major fundamental reports are released to avoid being caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit quickly, especially if you do not use money management and trade large volumes.
• Remember that successful trading requires a clear trading plan like the one presented above. Spontaneous trading decisions based on current market noise are a losing strategy for the intraday trader.

The material has been provided by InstaForex Company - www.instaforex.com