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07.03.2025 08:27 AM
GBP/USD: Simple Trading Tips for Beginner Traders on March 7th. Review of Yesterday's Forex Trades

Review of Trades and Trading Tips for the British Pound

The 1.2894 level was tested when the MACD indicator had already moved significantly above the zero mark, limiting the pair's upward potential. For this reason, I did not buy the pound. The second test of 1.2894, with MACD in overbought territory, allowed Scenario #2 for selling to unfold, leading to a 20-point decline in the pair.

The pause in the bullish market trend for the pound toward the end of the week is not surprising. Today's only notable UK data release is the HBOS House Price Index, which is unlikely to have a major impact on the pair's direction. This index is traditionally considered an indicator of sentiment in the UK real estate market, but its influence on GBP/USD is generally limited. Nevertheless, the HBOS report could provide additional insights into the UK economy. If the index shows a significant increase in housing prices, this may indicate strong demand and buyer optimism, potentially supporting the pound. Conversely, a decline in prices could heighten concerns about economic slowdown, putting pressure on GBP/USD.

For intraday trading, I will primarily rely on Scenarios #1 and #2.

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Buy Scenarios

Scenario #1: Buying the pound is possible upon reaching 1.2894, targeting 1.2936. At 1.2936, I plan to exit long positions and open short positions, expecting a 30–35 point retracement. The pound's upward movement is expected to continue. Important! Before buying, ensure that the MACD indicator is above the zero mark and just starting to rise.

Scenario #2: Another buying opportunity arises if the price tests 1.2867 twice, while the MACD indicator is in oversold territory. This would limit the downward potential and trigger a market reversal to the upside. Expected growth targets: 1.2894 and 1.2936.

Sell Scenarios

Scenario #1: Selling the pound is possible after breaking 1.2867, which could trigger a sharp decline in the pair. The key target for sellers will be 1.2817, where I plan to exit short positions and immediately open long positions, expecting a 20–25 point retracement. Selling at higher levels is preferable. Important! Before selling, ensure that the MACD indicator is below the zero mark and just starting to decline.

Scenario #2: Another selling opportunity arises if the price tests 1.2894 twice, while the MACD indicator is in overbought territory. This would limit the pair's upward potential and trigger a downward reversal. Expected downward targets: 1.2867 and 1.2817.

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Key Chart Elements

The thin green line marks the entry price for buying the instrument. The thick green line represents a potential Take Profit level or an area where profit should be locked in, as further growth above this level is unlikely.

The thin red line marks the entry price for selling the instrument. The thick red line represents a potential Take Profit level or an area where profit should be locked in, as further decline below this level is unlikely.

The MACD indicator is crucial for determining overbought and oversold conditions before entering trades.

Important Notes for Beginner Forex Traders

New traders should be extremely cautious when entering trades. Before major fundamental reports are released, it's often best to stay out of the market to avoid getting caught in sharp price fluctuations. If trading during news releases, always use stop-loss orders to minimize risk. Trading without stop-loss protection can result in significant losses, especially when using large positions and poor money management strategies.

For successful trading, having a well-defined trading plan is crucial—similar to the one outlined above. Making spontaneous trading decisions based on the current market situation is generally an unsuccessful strategy for intraday traders.

Jakub Novak,
Analytical expert of InstaForex
© 2007-2025
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