One of the easiest and most reliable ways to make money trading Forex is to follow trends and let winning trades run for as long as they will run. When you trade like this, most of your trades are small losing trades, but sooner or later they are more than paid for by a few huge winners. It takes some discipline to trade like this, but it is pretty easy. You don’t need to be a genius or even very experienced or knowledgeable to trade profitably in this style.

What you do need, of course, is at least one trend to exploit. When the Forex market is very flat and trends are completely absent, trend traders cannot avoid losing money if they want to participate, so identifying trends becomes really vital.

ONE OF THE EASIEST AND MOST RELIABLE WAYS TO MAKE MONEY TRADING FOREX IS TO FOLLOW TRENDS AND LET WINNING TRADES RUN FOR AS LONG AS THEY WILL RUN.

So, what are the best ways to define a trend that you want to trade?

How to Define a Good Forex Trend

Think of individual currencies, and how that currency is performing against other currencies. A good trend in one currency pair should also be visible in other pairs involving that currency. For example, if you see what you think is a good upwards trend in the EUR/USD currency pair, you should also see a similar trend with the Euro being strong against some other currencies and the U.S. dollar being weak against some other currencies.

The best trending currencies over the last 15 years have been the U.S. dollar, followed by the Euro. The smaller currencies tend to trend in a less stable way. A trend should show steady, stable directional movement over a period of time, not wild gyrations up and down.

A good starting point is to look at the USD against the other 7 major currencies. Look at a weekly chart of each of those 7 pairs. Put a few indicators on the chart: the 10 period RSI (Relative Strength Index), the 3 period EMA (Exponential Moving Average), and the 10 period SMA (Simple Moving Average). All of these indicators should be set to closing prices.

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