30.12.202409:02 Forex Analysis & Reviews: GBP/USD: Simple Trading Tips for Beginner Traders on December 30. Review of Forex Trades

Analysis of Trades and Trading Tips for the British Pound

The test of the 1.2570 price level coincided with the MACD indicator moving significantly above the zero mark, which limited the pair's upward potential. For this reason, I did not buy the pound. Shortly afterward, there was a second test of 1.2570 when the MACD was in the overbought zone, allowing for the implementation of Scenario #2 for selling. However, a significant downward movement did not materialize.

The British pound performed quite well at the end of last week, without any objective reasons. The observed speculative demand may quickly fade, leading to a significant correction in the GBP/USD pair. Therefore, it's important to exercise caution with new purchases at current levels. Given that there is no UK economic data again today, we might observe buyers attempting to push the pound slightly higher, but this trend is unlikely to continue after the New Year. For intraday strategy, I will primarily rely on implementing Scenario #2.

Buy Signal

Scenario #1: Today, I plan to buy the pound if the price reaches 1.2603 (green line on the chart) with a target of 1.2632 (thicker green line on the chart). At 1.2632, I plan to exit purchases and open sales in the opposite direction, expecting a movement of 30-35 pips from this level. Buying the pound can be justified as a continuation of Friday's trend. Important: Before buying, ensure that the MACD indicator is above the zero mark and starting to rise.

Scenario #2: I also plan to buy the pound today in the event of two consecutive tests of the 1.2574 price level when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger an upward market reversal. Growth toward the opposing levels of 1.2603 and 1.2632 is expected.

Sell Signal

Scenario #1: I plan to sell the pound today after the price breaks below 1.2574 (red line on the chart), likely leading to a quick decline in the pair. The key target for sellers will be 1.2546, where I plan to exit sales and immediately open purchases in the opposite direction, expecting a movement of 20-25 pips from this level. It is better to sell the pound at a level as high as possible, anticipating the end of the upward correction. Important: Before selling, ensure that the MACD indicator is below the zero mark and starting to decline.

Scenario #2: I also plan to sell the pound today if the price tests 1.2603 twice while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. A decline toward the opposing levels of 1.2574 and 1.2546 can be expected.

Chart Notes

• Thin green line: Entry price for buying the trading instrument.
• Thick green line: A suggested target for Take Profit or manually locking in profits, as further growth above this level is unlikely.
• Thin red line: Entry price for selling the trading instrument.
• Thick red line: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
• MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.

Important Note for Beginner Traders

• Always approach market entry decisions cautiously.
• Avoid trading during major news releases to sidestep volatile price swings.
• If trading during news releases, always set stop-loss orders to minimize losses.
• Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.
• A clear trading plan, like the one outlined above, is essential for successful trading. Spontaneous trading decisions based on current market conditions are inherently disadvantageous for intraday traders.