Forex Trend Following.

Most forex and other traders don't realise just how long a trend can last. These long term trends can last for months and years and their usually worth between $5,000 to $30,000 or more each. It takes patience to ride these longer term trends and ride out the 50% retracements. Most traders tend to profit take too early and so miss out on the BIG SWING. As Jesse Livermore said it's the big swing that makes the really big money. Trying to jump in and out of the waves is to risky.

A position should be taken on a breakout above a key pivotal resistance point, once you know the line of least resistance. It gives you the confidence to know that your right and have climbed aboard the gravy train to maximum profits. Often using a weekly close above or below a certain resistance or support level plus a longer term moving average such as 100 or 200 day to guide you. Only use moving averages as a guide because they are blunt tools that are subject to whipsaws. Whipsaws often follow big swings due to the consolidation that often follows major moves in prices.

You need real mental toughness and plenty of accurate research and case studies from your own charts, to be able to ride longer term trend following price moves. But to capture big profits you have to be prepared to ride the retracements of up to 50%.