If you look at any financial instrument such as - stock indices, bonds or Forex you will see they all exhibit long term trends. These trends can last for many weeks, months or years and if you can lock into these trends, you can of course make a lot of money – but what are the best trend following strategies and how do you make big profits – lets take a look.

Lets look at how and why trends develop on Forex charts and then look at how to trade them for big profits.

Big Forex Trends Last a Long Time

Forex markets are ideal for trend following because the long term trends you seen on a Forex chart reflect the economic cycle of boom and boost and of course, these economic cycles last a long time. This gives anyone the opportunity to lock into these trends and ride them for profit, while this is probably the best way to trade Forex, so let's look at some simple trading tips to help you catch and profit from these big trends.

Technical Analysis and Trend Following

The best strategy to use is one based on charts. You can see any looking at a chart of any currency pair, that a market will trend and by simply looking at price action and trading with it you can make big gains.

Of course this sounds easy in theory and it is but you need a strategy to get you into these trends when the risk reward is at its best. In addition, you need a money management method which will not only, stop you making losses but also, help you lock in and take profits at the best possible time.

A general rule of technical analysis is:

A trend in motion is more likely to continue than reverse and another commonly accepted fact is that, a trend will run on a lot longer than most traders think it will. When using technical analysis, you are not looking at the news, you are looking at the reality of what is happening on the chart and this is a huge advantage – why? Because you are simply trading the reality of the price and won't be tempted to bank too early and by focusing on a chart you won't be distracted by other peoples opinion or the news.

Best Strategy for Trend Following Profits

To get in on all the best trends you need to look at a chart and see how they all start and continue and if you do, you will notice that all the best trends start and continue in the same way and that's by breaking to a new market high.

If you go with these breaks and execute your trading signal, you will have a trend which is already in motion and your on board it and can ride for maximum profit. Not all breakouts develop into trends though, so you need to only pick the best breakouts. We don't have time to discuss everything about breakout trading in this article - but you will find other material on this site on the best breakout strategies you can use to catch the big trends so look them up.

Forex Money Management Stops and Profits

When in a trend you can trail your stop to protect your equity. The key to training a stop is to have it far enough back that you are not stopped out of your trading position to early. You need to give the market room to breathe and have your stop outside the market noise or random volatility. This means, having a stop back behind key support or a moving average higher than 40.

Of course, you will give a bit of profit back when the trend turns but as no one knows when it will end, its the only way to trade. Sure you will lose some trading pips - but if you could make 50% of every big trend, you would be very rich. Don't seek perfection with your trading system, simply look to make money. The good news is trend following Forex can be very rewarding, if you are patient and disciplined, you could make triple digit annual gains quickly.

Final Words

So there your have some insight into the best Forex trend following strategies for profit and anyone can learn to trend follow if they want to. Trend following has easy to understand logic and if you base your trading strategy on it no other method of trading can make you so much money in so little time – so learn this method of trading and may the trends be with you.

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