While there is a lot of information on the importance of cutting losses which proves difficult for many traders, there is very little info on how to hold big trends and maximize profits. Holding a profitable open position in a big trend causes problems for most traders and they either bank or get stopped out early – here we will look at how to maximize profits from long term trends.

Lets look at a common novice mistake when trend following...

The Losing Trader and His Approach to Trend Following

Typically, a trader gets into a good trend and is pleased when he makes a profit, the bigger the profit becomes the more excited he gets. The problem he has though it the market starts to re trace against his position ( which of course is normal) and he starts to feel unsure – should he bank the profit before it gets away or should he wait?

The bigger the profit becomes the more the trader worries so – he either snatches the profit or puts his stop inside normal volatility and gets stopped out. He,s relieved, as he has banked his trading signal at a profit but then looks to see, the trade carry on and make several thousand in profit and he's not in the market.

If you are trading Forex markets, you need to cut losses and you will generally, have more losses than profits so when you have big trends, you need to milk them for all there worth. If you look at the big currency trends, they can last for many weeks, months or even years but most traders, can't hold a trend for more than a week or so in their currency trading strategy.

If you want to win at currency trading and enjoy success, you have to keep losses small but you also need to have the courage to hold big trends and here are some tips you can use, to maximize profits from any trend.

Tips to Maximize Profits When Forex Trend Following

Once you are in a trend, get your stop to entry as quickly as possible but don't place inside normal volatility.

Once the trend is progressing, make sure you trail the stop far enough back so it's outside of normal volatility and this means - behind a key moving average such as the 40 day or nearby support or resistance level.

As you never know when a trend is going to end, to cushion you in terms of banked profits, swing trade within the trend with 50% of your capital. Be active with this capital and in a bull market look to buy into support and sell on a move to overbought back and keep doing this strategy within the trend. You do the opposite in a bear market but if you do this correctly, you will build a cushion of profits which makes holding the long term trend easier. You will find a good level to sell and back to in strong trends is the 18 day MA.

Don't look to predict when trends might end, because they always run further than most currency traders think, so be happy to catch 60% of any big trend and give a bit back at the end – your not interested in perfection, your interested in making money.

Milk the Big Trends – Look at History

If you look at historical currency trading charts, you will see the big trends last a long time and they always over shoot, if you use the above tips you can make a lot of money from these trends and enjoy long term currency trading success.