If you want to engage in online currency trading then your aim is to make big profits – you have to risk more so the only reason to trade is to make more big gains. Most currency traders fail to do this as they don’t understand risk and reward, so here we are going to show you a simple method anyone can use to make huge forex profits.
First accept this
If you want to make money you have risk it!
The bigger the risk the bigger the reward -risk though is not just related to the market traded but also the traders strategy.
While it may appear that you are risking more with the online currency trading strategy oulined below, you are actually taking calculated risks and trading the odds and this actually increases your chance of winning.
So let’s look at how to do this.
1. Trade only the big trends.
Check a forex chart and look for the really big trends, the ones that produce the profits of $10,000 - 30,000 or more and you will notice:
They only come around a few times per year.
With this forex trading strategy, these are the trades you are going to focus on.
If you like the adrenalin rush of trading and simply trade for excitement, take up an extreme sport and don't read any further, this method is designed to make money only.
2. How to spot the mega trends
Most forex traders don’t realize that the biggest trends of the year start form new market highs - NOT market lows.
This means that you need to look out for important valid breaks of resistance or support.
We don’t have enough room to discuss breakout methodology in detail - simply check our other articles but we will discuss one fact in relation to them.
Why Most Traders Can't Buy Breakouts
Most traders fail to buy a breakout because they are obsessed with buying low and selling high, however the way to make money is to buy high and sell higher.
When a currency breaks to the upside, they wait for the pullback but in the really big trends, prices don’t pullback.
They then sit and watch the trade disappear over the horizon.
You need to have the mindset that if the break occurs you go with it. Sure, you have missed the first bit of profit but history shows there is normally plenty more to follow.
3. Trading the odds
You shouldn’t just buy a breakout – you should check that price momentum is accelerating to increase the odds of success. For this you need some momentum indicators and two great ones are the stochastic and RSI – There easy to use and very effective.
4. The hard bit!
The hard bit comes next, that’s having the courage to accept the huge gain the market is going to give you.
Most people simply can’t do this. They get obsessed with taking a profit as the profit develops, their not used to big profits and can’t accept them.
When normal volatility causes pullbacks in the trend they panic and bank early, better to have a small profit than none at all.
What happens next?
The trade powers on making thousands, or tens of thousands of dollars and their not in but they could be, if they had courage to accept drawdown in open equity as normal market behavour, which it is.
Placing a stop on a breakout is easy ( under the breakout point ) holding the trend longer term is the hard part and having the confidence to accept dips in open equity, while focusing on the bigger prize.
In terms of other ways of making money in online currency trading the above idees are not commonly accepted, but don’t let that bother you most traders lose!
Eyes on the prize
If you think about the above, you are only trading the best trends, you are confirming entry to increase the odds of success and risk is low.
Finally, it is the ability to accept the risk of dips in open equity and focus on the longer term that will help you make extraordinary gains in the forex markets.
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