This article is all about, how to catch big trends and hold them. Big trends in currencies can last for many weeks and can make huge profits. Regular readers of this blog's daily forecast will have seen us catch several big trends recently and here, I want to give you some simple tips on how to make more money in less time. Here are the top ten tips for trading in 30 minutes a day.

You don't get rewarded for working hard in Forex trading you get rewarded for being right and this means being patient and trading less. So how let's look at how to catch big trends

1. Use Weekly Charts

The weekly charts help you see longer term trends better and they also are great for establishing support and resistance. Look at the weekly chart and if the support or resistance levels line up, it makes the daily levels more valid in terms of holding or breaking which increases your odds of success.

2. Do NOT Look for Perfect Market Timing

When following big trends a few ticks difference is irrelevant. Simply look to get in a trade when the odds are good and don't stall your trade over a few pips in case you miss the move. Perfect market timing is one of the biggest myths of Forex - as famous trader Jim Rogers says "he's a terrible market timer" but how much money does he make? Huge profits.

3. Stops Need to Protect but Beware of Clusters

I have worked as a broker and know that most retail traders tend to put stops to close and you will often see them just a few ticks behind an important level of support in an up trend.

What tends to happen is - these stops are picked off as the market falls below the support level and then, the market immediately reverses and goes up!

Most traders are trading with 10 or 20 pip stops, because there looking for small profits and of course they lose. The savvy trader will use a 100 pip stops, so his stop is behind a “stop cluster” but still has excellent risk to reward, because he's looking for a thousand pips or more in profit.

4. Use Breakouts

We all like to sell into a high or buy a low but the most effective way of trading Forex is via breakouts. When an important level of resistance or support is taken out go with the break. Sure you don't buy an exact low or sell an exact high, as the trend is in motion but the odds are on your side and that means the trend is likely to continue.

If you get a break in price which adheres to the following principle, then its likely to be an excellent trade.

5. Use The Heisenberg Principle

This is a principle that if you learn it, it will make you more alert to trading opportunities and give you greater concentration on

The more unexpected a price break is the more likely it is to continue than reverse and this makes the signal more powerful and the logic was neatly summed up by Bruce Kovner in “Market Wizards”. Here he makes reference to the Heisenberg principle in physics which postulates:

“if something is closely observed, the odds are it is going be altered in the process” (Heisenberg principle in physics)

Translated into plain English terms this means - when know one expects the event and can see no logical reason behind it, the odds of trading the break are far higher than when they do. The concept behind this is “The Less Observed, the better the trade” so when a breakout or reversal occurs which no one is expecting and it's uncomfortable for you to trade - go with it.

Trading is all about being aware of crowd psychology and learning to go opposite to the majority at the right time and if you understand the above, you will be able to take the trades others don't do.

6. 50 - 50 Rule

If for example, a market becomes overbought in a bull market – bank it regardless of how bullish the news is (see the previous point!) and then wait for a dip to put it back in.

If you do this you are active within the long term trend, you can get profits in the bank to cushion you against any adverse move. This method of trading is great for smoothing your equity curve when following long term trends that can continue for weeks or months on end.

7. Forget Perfection Focus on Money

Don't think what might have been focus on what you have. At all times focus on playing great defence and protect what you have at all costs. Many traders think there is some way to beat the market but that's not possible and never will be so you need to trade with discipline and take losses cheerfully.

8. Avoid the Outcome Bias

Traders are happy when they win but get sad when they lose and think they did something wrong so they keep journals and look at past trades and chop and change systems but the pro trader sees losing as just part of the game of trading Forex and doesn't dwell on or think about losses.

9. Be Prepared to Change Your View Quickly

Don't fall in love with trades! Be prepared to reverse your view, many traders stay in trades and think because they entered them put a stop and a target they should leave them and see how they turn out. Markets are forever changing so don't hesitate to simply take a trade out the market if you no longer feel comfortable with it.

Use Indicators Sparingly

I like indicators as they give me a view of how overbought or oversold the market is but I don't use to many – just 3, to give me an idea of strength of price and how overbought or oversold the market is. Many traders chop and change indicators and use to many – if you use indicators use them consistently and only use a few

Final Words

When trading big trends, you don't need to trade many times and you don't need to spend much time on your trading 30 minutes a day is fine and if you understand and apply the above tips you will make bigger profits and spend less time on your trading.

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