If you would like fishing for the big profits in forex trading you must follow trend forex developments in the longer term. Here we give you a simple 3 step method that if you well, it will help you catch the big forex trend and leads to the long-term currency trading success.
Most novice traders do not want the trouble trend following forex longer term - instead they try scalping of forex day trading. These methods focus on the small trader removals, and they hope to capture small gains, however, as most short-term moves randomly, it gives rise to eradicate equity.
The other choices are swing forex trading and long-term trend to follow and this article is about the latter method. If you look at all forex chart, you will see the long-term trends for the last months or years. These steps can and do yield big profits - we will outline a simple method to catch.
Breakouts
By far the best way for the capture of the big moves is to use a forex trading strategy based around breakouts. A breakout is simply a move to a forex chart where a new high or low and the resistance of aid has been broken.
It is a fact that most of the major moves start of new highlights of lows.
Although it might seem that you can not buy or sell at the highest level, you are in terms of the likelihood of the trend continued. Most forex traders make the mistake of waiting for the breakout to come back and get in a better price, but they never traders on board. The reason for this is that if a breakout occurs, then there is a strong new trend and a pullback is not very likely to occur.
Most traders do not buy or sell breakouts, and that is exactly why such a powerful method.
The only point to keep in mind is a support or resistance is broken, should be valid, and that means that at least 3 points in at least 2 different points in time frames. The more tests and the wider the gap between the tests the validity of the level.
Fixture
Of course not every breakout remains and some opposite, they are false and can lead to losses. You must confirm each move. All you have to do to achieve this is to take some momentum indicators in your forex trading system to confirm your trading signal.
These indicators give a picture of the strength and speed of the price and there are many to choose from. We have no time to discuss them here (just look at our other articles), but two of the best - the stochastic and RSI Relative Strength Index
Stops and Goals
Stop levels with easy breakouts - just behind the breakout point.
If you have a big trend, then you must carefully you can milk, so that you do not have to stop your move quickly and keep them out of the normal volatility. If it is a big move, trailing stops should be kept a long way back and the rolling average of 40 days is a good level.
You have to keep in mind that if the trend you will eventually backfire some profits. You do not know when the trend is to end, so that you do not predict.
It's ok to a big back, if that is the nature of forex trading. Keep in mind if you are 50% of all major trend that you would be very rich. If you have long-term trend follow accept a little back and open valleys in taking power as the trend develops - this is noise and does not affect the long-term trend.
The above is a simple way to forex trend and capture the high probability that moves the proceeds of the big profits. If you are learning forex trading and want a simple method that is robust and will help obtain the large backlog continues, you should see your Trading basis of the above method.
Label: forex info