Market Hours
Trading Sessions
GBP/USD is most active during London and the London-New York overlap
📍 24-Hour Session Overlap (UTC)
💡 Pro Tip
The London-New York overlap (12:00-16:00 UTC) offers the highest liquidity and strongest moves for GBP/USD. This is prime time for breakout and trend strategies!
🔗 Key Correlations to Watch
DXY (Dollar Index)
-0.85
Inverse
EUR/USD
+0.75
Positive
EUR/GBP
-0.60
Inverse
FTSE 100
+0.40
Moderate
📊 Tip: If going long GBP/USD, check if DXY is trending down (USD weakness). If EUR/USD is also rising, it confirms broad USD weakness — good confluence!
Core Strategies
5 Proven Trading Strategies
Each strategy includes clear entry/exit rules, risk management, and TradingView setup tips
1
Trend-Following with Moving Averages (Golden Cross)
Overview: This strategy lets you "ride the trend" rather than trading against it. A Golden Cross (50 MA crossing above 200 MA) indicates a bullish trend, while a Death Cross signals bearish momentum. We confirm with RSI and key support/resistance levels.
📈 Golden Cross Visualization
50 MA
200 MA
Entry Rules
▼
- Bullish Entry: Wait for Golden Cross (50 MA crosses above 200 MA). Enter on pullback to 50 MA with RSI recovering from oversold (above 30). Look for bullish candlestick patterns like hammer or engulfing.
- Bearish Entry: Wait for Death Cross (50 MA crosses below 200 MA). Enter on bounce to 50 MA or resistance with RSI dropping from overbought (below 70). Look for shooting star or bearish engulfing.
Stop Loss & Take Profit
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- Stop Loss: Place below recent swing low (for longs) or above swing high (for shorts). Adjust position size so stop risks only 1-2% of account.
- Take Profit: Aim for at least 2:1 R:R. Target next major resistance (longs) or support (shorts). Consider partial profits at 1:1 or 1.5:1 with trailing stop.
TradingView Setup
▼
- Add 50 and 200 MAs (EMA or SMA) — color code 50 MA gold, 200 MA white
- Use 1H chart for day trading, 4H/Daily for swing trading
- Set alerts for MA crossovers and price touching 50 MA
- Plot support/resistance with Horizontal Ray tool
✅ Pre-Trade Checklist
- Confirmed Golden/Death Cross on chart
- RSI confirms momentum direction
- Price at/near 50 MA for pullback entry
- Candlestick confirmation pattern visible
- Stop loss and lot size calculated (1-2% risk)
- Checked DXY correlation
2
London Breakout Strategy
Overview: The London Breakout captures the volatility explosion when London opens after the quiet Asian session. During Asian hours, GBP/USD often drifts in a tight range. When London opens — boom! — big moves happen. This mechanical strategy produces one trade almost every London morning.
📊 Asian Range Breakout Concept
Setup Rules
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- Mark Asian Range: On 5m or 15m chart, draw a box from 00:00-07:00 GMT. Identify the high and low of this range.
- Range Size Check: If range is >50-60 pips, market already moved in Asia — breakout may be less reliable. Consider skipping or tightening risk.
- Order Placement: Place buy stop a few pips above range high, sell stop a few pips below range low.
- Trigger: When one side triggers, immediately cancel the other pending order.
Entry, Stop & Target
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- Entry: Breakout triggers your pending order. Alternatively, wait for a 5m candle to close beyond the range for confirmation.
- Stop Loss: Set just beyond the opposite side of the Asian range. If long, stop below range low.
- Take Profit: Target 1-1.5x the range height. With a 20 pip stop, aim for 30 pips (1.5:1 R:R). Studies show ~50-55% win rate at this ratio.
⚠️ Avoiding Fakeouts
- If breakout candle is a pin bar (wicky rejection), skip the trade
- True breakouts come with volume surge — low volume = suspect
- Banks sometimes trigger stops then reverse ("liquidity hunts")
- Some traders wait 5-15 minutes to confirm breakout holds
✅ London Breakout Checklist
- Asian range marked (00:00-07:00 GMT)
- Range is reasonable size (<50 pips ideal)
- Buy/Sell stop orders placed
- No major UK news at 7-9AM GMT
- Risk calculated at 1% of account
3
Bollinger Bands "Squeeze" (Volatility Breakout)
Overview: This strategy exploits volatility contraction and expansion. Think of it like a rubber band — when it coils tight (narrow bands), a snap (big move) often follows. Bollinger Bands widen in volatile times and narrow during quiet periods. A "Squeeze" signals an upcoming explosion.
📊 Bollinger Band Squeeze Pattern
Upper/Lower Bands
Middle Band (20 MA)
Identifying a Squeeze
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- Look for Bollinger Bands visibly pinching together — almost parallel, very tight
- BB Width indicator hitting a low value confirms the squeeze
- You'll see several small candles in a row, price consolidating in a small range
- Often occurs before major news or during quiet Asian session
Entry Rules
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- Breakout Signal: When bands start to widen and price closes outside a band, the move is likely starting
- Go Long: Price closes above upper band
- Go Short: Price closes below lower band
- Confirmation: Volume spike on breakout candle, RSI/MACD aligning with direction
Stop Loss & Targets
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- Stop Loss: Just inside the consolidation range — for longs, below the 20 MA or bottom of squeeze; for shorts, above the range top
- Target: Aim for 1.5:1 or 2:1 R:R minimum. Target a measured move equal to the prior range width, or next major S/R level
- Trail Stop: Behind the 20 MA or opposite band once in profit
💡 TradingView Setup
Apply Bollinger Bands (20, 2) indicator. Add BB Width indicator to spot extreme lows. Set alerts for price crossing outside bands. Use multi-timeframe analysis — spot squeeze on 1H, fine-tune entry on 15m.
4
Support & Resistance Trading
Overview: This foundational strategy uses support (price floor) and resistance (price ceiling) levels. Support is where buying interest halts a fall; resistance is where selling pressure caps a rise. Top traders map these "liquidity zones" where big banks have pending orders.
📊 Support & Resistance Zones
Identifying Levels
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- Higher timeframe = Stronger level — Start with Daily or 4H chart
- Mark major swing highs/lows, pivot points, psychological round numbers (1.2500, 1.3000)
- Note areas with sharp bounces or rejections in the past — lots of orders there
- Draw a zone (not single line) to allow for small overshoots
Strategy A: Trading the Bounce
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- At Support: Watch for bullish signals — pin bar with long lower wick, bullish engulfing, RSI rising from <30. Enter long near support on confirmation.
- At Resistance: Look for bearish reversal cues — bearish pin bar, engulfing pattern, RSI >70 hooking down. Enter short near resistance.
- Stop: Beyond the S/R zone on the other side. Give buffer for "stop hunting" wicks.
- Target: Opposite side of range or next key level. Aim for 2:1 R:R.
Strategy B: Breakout and Retest
▼
- When a key S/R breaks, it can flip its role (resistance becomes support, vice versa)
- Entry on Retest: After breakout, wait for price to retest the level from the other side. Enter on confirmation that the level now holds.
- Example: Price breaks above 1.2500 resistance, pulls back to retest 1.2500 as support, prints a bullish signal — buy!
- Stop: Beyond the retested level (back into old range)
- Target: Next major S/R beyond breakout. Breakouts can yield >3:1 R:R.
⚠️ Dealing with False Breaks
GBP/USD is notorious for false breakouts (stop hunts). Wait for a candle close beyond the level for confirmation. Strong breakouts have impulsive candles that "thrust" through. The retest strategy inherently filters false breaks — if the breakout is fake, the retest won't hold.
5
RSI Divergence Trading (Spotting Turning Points)
Overview: This strategy catches trend reversals by spotting when price action and momentum disagree — called divergence. Imagine a car still moving forward but the engine is weakening. Divergence is an early warning that GBP/USD may be about to turn. Very powerful for intermediate traders.
📉 RSI Divergence Example
Understanding Divergence
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- Bearish Divergence: Price makes higher high, but RSI makes lower high. Rally is running out of steam — possible downward reversal.
- Bullish Divergence: Price makes lower low, but RSI makes higher low. Selling pressure is weakening — upward reversal may be coming.
💡 Key Insight
This "disagreement" between price and indicator means the trend's momentum is waning even though price extended — often a precursor to reversal.
Entry Rules
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- Look for divergence at key S/R zones or trendlines where reversal could happen
- For Short (Bearish Divergence): Price at resistance with higher high but RSI lower. Wait for bearish candlestick confirmation (shooting star, engulfing). Enter short.
- For Long (Bullish Divergence): Price at support with lower low but RSI higher. Wait for bullish reversal pattern (hammer, morning star). Enter long.
- Alternative: Draw trendline on price; divergence often precedes a break. Enter when price breaks the minor trendline.
Stop Loss & Targets
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- Stop Loss: Just beyond the recent extreme. For bearish divergence short, stop above the highest high. For bullish divergence long, stop below the lowest low. Give a few pips cushion.
- Take Profit: Target nearest significant S/R. Use Fibonacci retracements (38.2% or 50%). Ensure at least 2:1 R:R on first target.
- Trail: Once in profit, ride remaining position if MACD confirms trend change.
⚠️ Important Warning
Divergence can persist ("extended divergence") — price may keep going a bit further before reversing. Stick to your stop; don't widen it hoping for a turn. Better to re-enter than blow a big loss. Risk less (0.5-1%) on pure reversal plays until you have multiple confirmations.
Key Terms
Trading Vocabulary
Click cards to reveal definitions
Golden Cross
Tap to flip
When the 50-period MA crosses above the 200-period MA, signaling a bullish trend reversal and increasing buying pressure.
Death Cross
Tap to flip
When the 50-period MA crosses below the 200-period MA, signaling a bearish trend reversal and increasing selling pressure.
Pip
Tap to flip
Point in Percentage — the smallest price move in forex. For GBP/USD, 1 pip = 0.0001 (the 4th decimal place).
R:R Ratio
Tap to flip
Risk-to-Reward Ratio — compares potential loss to potential gain. A 2:1 R:R means you risk $1 to potentially make $2.
Bollinger Squeeze
Tap to flip
When Bollinger Bands contract tightly, indicating low volatility. Often precedes a significant price breakout in either direction.
Divergence
Tap to flip
When price and an indicator (like RSI) move in opposite directions, signaling potential trend weakness or reversal.
Fakeout
Tap to flip
A false breakout where price briefly moves beyond a level then reverses back. Often caused by "stop hunting" by large players.
Cable
Tap to flip
Nickname for GBP/USD, derived from the transatlantic cable used to transmit exchange rates between London and NYC in the 1800s.
Trading Tools
Position Size & Pip Calculators
Calculate your risk before every trade
Position Size Calculator
Calculate lot size based on risk %
Recommended Lot Size
0.05 lots
Risk Amount: $10.00
Pip Value Calculator
Calculate $ value per pip
Value Per Pip
$1.00
10 pips = $10.00 | 50 pips = $50.00
Risk/Reward Calculator
Calculate your trade's R:R ratio
Risk:Reward Ratio
1:2.0
Risk: 30 pips | Reward: 60 pips
Summary
Key Do's and Don'ts
Risk 1-2% Per Trade
Top traders survive losing streaks by keeping each trade's risk small. Never "all in" on a single trade.
Wait for Confirmation
Don't chase entries. Wait for candlestick patterns, indicator signals, or price closes beyond levels.
Check Correlations
Watch DXY, EUR/USD, and FTSE 100. Multiple confirmations increase trade probability.
Trade the Sessions
London and London-NY overlap offer the best GBP/USD opportunities. Avoid quiet Asian hours for breakouts.
Don't Trade Into News
Major announcements (BoE, Fed, NFP) can cause whipsaws. Reduce size or stay out during high-impact events.
Don't Move Your Stop
If you're wrong, accept the loss. Widening stops hoping for a reversal leads to blown accounts.
Don't Overtrade
Quality over quantity. One well-planned trade beats ten impulsive ones. Journal your trades.
Don't Skip Demo
Practice each strategy on demo or TradingView replay before risking real capital. Master one at a time.
Knowledge Check
Test Your Understanding
Answer these questions to reinforce what you've learned