Headwind Trend Reversing Trade Signal
Signal for Swing Trade Entry
Signal for Long Term Investment Entry

Headwind is a trend reversal trade. As a Stock makes goes higher and higher (or, Lower and Lower), eventually, it may display a Headwind Signal that shows a reversal of trend may be imminent. Headwind Setup uses this Signal as a key component of the checklist conditions.

If Headwind Signal appears when the Stock is going straight up or down without discernible “swings”, i.e. without distinct Higher High Higher Low (or Lower High Lower Low), then the Headwind Signal is best avoided.

As Headwind trade is against prevailing trend, it is possible that weekly chart Backdrop color would take a few days more to turn in favor trade’s direction. One may enter a trade even without weekly Backdrop color aligned with the trade direction provided the weekly Candle shape is strongly in favor of the intended trade direction.

Headwind signal may or may not change the current trend of the stock. It is therefore advisable to take partial profit (or full profit if one so desires) at the Value Area. And leave the remaining position with Breakeven or Trailing Stop. One may also book Partial Profit as soon Profit equals Risk (i.e. Initial Stop Loss) amount.

Trade Entry is to be taken only if Potential Reward (distance between Entry Price and Initial Profit Target) is at least as much as Potential Risk (distance between Entry Price and Initial Stop Loss).

Daily CUE Hop On Chart Checklist

​All of following conditions
​Go With Flow Long
Headwind Short
​Flow or Traffic Candle color
Bullish (Cyan / Green) or Neutral (Yellow)
​Bearish (Magenta / Red) or Neutral (Yellow)
​Headwind
Bullish ­- Cyan / Green
Bearish ­- Magenta / Red
Relative Performance
Bullish ­- Ascending
​​Bearish -­ Descending
Candle Shape
Bullish ­- Hollow or one with
Long Lower Tail
Bearish ­- Solid or one with Long Upper Tail
Acceleration
Bullish ­- Green
Bearish ­- Red
Reward Risk Ratio
At least one or more
At least one or more

Weekly CUE Backdrop Chart Checklist

ANY of following conditions
Headwind Long
Headwind Short
​Backdrop Candle color
Bullish ­- Cyan
Bearish ­- Magenta
Candle Shape
Bullish ­- Hollow or one with
Long Lower Tail
​Bearish ­- Solid or one with Long Upper Tail

Headwind Charts

  • When the Bearish Headwinds appeared, price was just above Memory Support. One would wait and enter the Short at the last Candle using CUE Fine Tune Real Time Chart.