The best way to make big Forex gains is to follow the big trends that can last many weeks in duration, not only can you make big profits you will spend less time on your trading. Forex trend following is easy to do, if you follow the simple steps in this article.
You can look at any chart, you will see big long term trends but despite these trends being present in all currencies, most traders make a lot of effort and trade the short term moves. They make a lot of effort, trade to much and lose. The smart trader is patient, gets into and holds, the long term trends and makes more money and spends less time on his trading.
So how do you get in on these trends?
The answer is simple, just look at any currency trading chart and you will see that all big bull trends in a currency, start from a new breakout to chart highs and the trend then continues its trend from them. All you have to do is buy the right breakouts and you can make a lot of money.
So what are the best breakouts to buy?
You are looking for an area of resistance which has been tested several times before the breakout comes and six is the minimum, you should look for. These tests should be in time at least two time frames which are widely spaced apart, in terms of time. The more tests you have the better and its even better, if you see in the news that a certain level is considered important by traders.
When the breakout comes, you buy and put your stop just below where the level of resistance gave way, this then gives you close and tight stop loss protection.
Most traders don't trade breakouts, because the want prices to dip lower before getting on board but the best breakouts pick up momentum quickly and move swiftly from the breakout point.
Don't wait to get in! Sure you miss the first bit of the move but the odds are, the breakout will continue so you have lots of profit potential.
When in the big trends you want to be in them for many weeks, so trail your stop outside of normal volatility. Most traders like to move their stop up to quickly and then, get taken out the trend to early with a small profit when they could have had a far larger one - never make this mistake. Accept short term dips in equity against your position and hold for the long term.
You normally get a few really good breakouts each month and if you focus on these, you can easily make triple digit profits. Two facts will always mean this strategy will work and they are - markets trend and the best trends start and continue from breakouts.
The simple strategy above is simple to understand, doesn't take long to apply, will always work and makes huge gains - so try long term Forex trend following, using breakouts and you can enjoy currency trading success.
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