Trend Following in Forex for Triple Digit Annual Profits!

If you want to catch the really big moves then trend following in forex if done correctly can put you in trends which will last for weeks or months - its these big long term trends that yield the big profits so stop trading short term and use a long term trend following strategy like the one enclosed...

If you look at any chart you will see long term trends that last for weeks months or even years and they always occur because currency trends reflect the underlying economic cycle which last a long time and this is reflected in the currency movement.

Now let's look at a trend following forex trading strategy, that's simple, take about 30 minutes a day and will get you in on the big trends.

1. You need Patience

You will only get a few opportunities a month so you need to be patient and wait for them to come around. Many traders think the more they trade the more they make and end up taking low odds trades however if you want to win, you need to be patient.

I know traders who trade a few times a month and make 100% annualized gains and you can too.

2. Spotting the Opportunity

Forget buy low sell high, the best way to trade is to buy breakouts to new highs or lows.

It's a fact most major trends, start and continue from breakouts and you want to get in on these breaks and milk them.

We have written about how to spot the best breakouts in other articles so look them up - but in essence you are looking for support and resistance the market feels is significant. When it breaks - stops will be hit and fresh buying comes in, which sees the trend continue.

Don't wait for pullbacks to get in this is the major mistake most traders make.

They think they have missed a bit of the move and want to come in on the pullback, get in and dont wait, if momentum confirms the move, the odds favour a continuation of the break.

3. Confirming Momentum

This is easy to do and there are plenty of indicators which show momentum and velocity of price. If it is accelerating through the break it confirms the move.

We don't have time to discuss all momentum indicators in detial here but two great ones are:

The Relative Strength Index (RSI) and the stochastic.

Look them up, they take about 30 minutes to learn and are great for confirming moves.

4. Set Stop and Trial it

Stops are easy when trading breakouts, under the breakout point.

What separates out the pro traders from the ones who make mediocre profits is - the way they trail their stops.

The pro trader understands that he has to give the market room to breathe and therefore trails his stop outside of market volatility. He accepts short term drawdown as necessary, to hold a trend for weeks or months. While you need discipline and confidence to do this, it is this key area that if you get the stop right, will give you huge gains.

Trade Less Make More

So there you have it, a short summary on how to trend follow forex correctly.

Most traders want to mess about and try and catch small moves, where the odds of success and profits are small. If you want to make big profits - lock into and hold the long term big trends, they apways appear and now you know how to lock into them.

You will trade less, make more and its very time efficient and could make you triple digit gains.