Forex trend following offers you the opportunity to lock into the trends that can make triple digit profits but while it looks easy, its not and you wouldn’t expect it to be with the rewards on offer but if you can master it, then you can enjoy spectacular success and this article is designed to show you how to do it…
Look at any forex chart and you will see trends which last for weeks, months or years and if you can lock into them, you can make triple digit profits and here are some tips on how to do just that.
First – Be patient!
The big high odds trends only come around infrequently you can’t force them so wait for them. I know traders who only trade a few times per year per currency yet, pile up triple digit gains.
Don’t be in a hurry wait for the right opportunities and these will normally come from breakouts to new chart highs or lows.
Most big trending moves start from these so you need to go with them and the more valid the breakout is, the bigger the chances of a continuation of the trend will be.
Spotting Trend Direction is Easy – Making Profits from the Trend is Harder
It’s easy to spot a long term trend and many traders are right about trend direction but simply can’t make any money from them – Why?
There are problems normally with money management as well as psychologically.
In terms of money management, you MUST have a stop outside of normal volatility, or you will get bumped out the trade — only to see the market stop you out and then go back the way you thought!
This is not normally a problem when you enter the trade – but when you trail your stop.
Fact is most traders pull their stops up to tight and again get bumped out by volatility when you must hold it back outside of volatility. Sure you give a bit back at the end of the trend but that shouldn’t bother you. If you caught 50% of every major trend, you would make a killing from the markets.
Hold you stop back and trail it slowly.
You will find that this may look more risky but it’s actually less risky and will give you a bigger reward.
The other problem with traders is psychologically they cannot accept huge profits, even when the market wants to give them to them!
A typical example is a trader gets in on a trend and makes a profit but the bigger the profit becomes the more he wants to take it before it gets way.
As the profit gets bigger and bigger and the volatility eats into open equity, the more the trader wants to take it until in the end he snatches the profit or bumps his stop right up. Sure he gets out with a small profit but most big trends last a long time and instead of having a spectacular profit, he has a small one.
In forex trading your aim is to make money, not seek perfection with market timing. You can’t do it and you cannot buy or sell market bottoms and tops so don’t try.
You have to understand if you want to bank a big profit from the major trends you are going to have to give back a bit at the end and have open equity dips, along the way. That’s just the nature of forex trading.
If you can trade with discipline and be patient, then long term forex trend following offers you spectacular profits and all you have to do is – accept the profits the market wants to give you.
This may sound simple – but requires iron discipline.
Master the art of forex trend following though and you could get rich!