Tuesday, August 16, 2016

How to Day Trade Forex Profitability using CUE Trading System

From the desk of Sagar Nandi and Superior Profit

Superior Profit Investors join every week on Saturday for a Live Class where we discuss previous week's market and look for trading opportunities for next week.

We had our last class on 13th Aug, Saturday.

One of our traders from Australia was keen on Day Trading Forex using Real-Time Charts. We pulled out some Live Charts and discussed some ways of how to profitably trade Forex using CUE. Here is a summary of that for those who could not join us in Live Class.

Forex is one of the slowest moving instruments in the Market. The perceived high profit (or loss) in a short time comes from higher leverage. That tends to attract many traders to Forex with the hope of making a significant profit starting with a small capital. As our trader friend told in the class: "Profit is easy to come and easy to go in Forex."

Well, in reality, for most (if not all !) beginning Forex traders with small capital and lack of system and discipline, profit is more "easy to go" and "difficult to come".

I encourage new traders first to prove to themselves that they can make a profit in less leveraged instruments. Like, using Stock. Or may be using defined risk Options. Once a beginning trader can get consistent profit in less leveraged instruments, she may move on to high leveraged instruments. Be it Forex. Or Future.

The reason for this advice is to establish the technical aspect of trading firmly in trader's brain. So much so that in front of the live market the trader does not think. Traders' response to market moves become automatic. Like walking on the street. Once that happens, the trader is ready to take on higher leveraged instruments. It is like learning to drive slowly first. Without making an accident. Or at least one that is not fatal. And then only - if one wishes so - to move to higher speed cars.

Besides, the greater leverage of Forex (and Future) and the fact that these Markets are open 24 hours, make lifestyle and psychological aspect of handling them more difficult.

With that note, let us look at some ways a Superior Profit Trader takes Day Trade on Forex. This illustration is right from our last Live Class.

Below is a CUE At A Glance view of AUDUSD (the pair selected by our Australia trader in the Live Class).
The Memory Resistance lines in Weekly and Daily were already there long before the Candles came and hit them from below. And we knew beforehand that the Memory Resistance was around the level 0.77300 approximately. They were already there before the price comes to them. And we could plan our trade at that price level.

The Memory liens have zero lag. This zero lag nature is a significant advantage of the Memory line in Day Trading. Compare this to most other traditional indicators that have lag and hence tend to be ineffective in Day Trading.

In Superior Profit Way, we use several Zero Lag indicators for Day Trading. Memory Line is one. Others include Watermark on Daily Chart, and Daily Range, Early Range, Power Range on Intraday Real Time Chart.

Also, we use Stretch Release on Real Time Chart for Day Trading. This CUE indicator is very responsive; has tiny lag. Making it suitable for Day Trading.

​In the At A Glance chart, we saw that the Memory Resistance Levels in Weekly and Daily charts were same. And that gave us additional confidence to look for Low-Risk Short Trade on AUDUSD at the Memory line price level.

To execute our trade, we drew a horizontal line at the Resistance price level of 0.77300 on Real Time Chart using 10 Minute intervals (we could use 5 minute or other Real Time interval as well)  and waited patiently for the price to come up to this level and then tilt down; showing that Memory Resistance was working. And then take our Low-Risk Short Trade.

Below is the 10 Minute chart on AUDUSD with the Resistance level drawn on it. Following the marked comments numbered 1 to 7, we can see how we confidently Shorted AUDUSD as a Day Trade at the pre-planned price level and booked profit. 
In the above Real Time chart, we did not use powerful CUE Stretch Release indicator. Neither did we use our Candle painters; Traffic Light or Flow coloring.

Let us look at another Day Trade opportunity the same AUDUSD presented a shortly after we booked profit in the last illustrated Short trade.

Below is AUDUSD chart on next day using CUE Fine Tune Template. Now we have Flow Candle coloring on the chart. And we also have Stretch and Stretch Release indicators drawn on the Candles.

Following the notes numbered 1 to 6 we can see how; again; we entered and exited a Short Day Trade on AUDUSD profitably. 
​Let us make some noteworthy comments based on the way the two Superior Profit Date Trades were executed. They apply to all Superior Profit Trades we take. And need to be emphasized even more strongly for higher leverage instruments like Forex and Future etc.

1) Having a prior idea of Trade Direction is necessary. In both the examples, we used Memory Resistance to decide our Short Trade Direction.

2) We wait patiently for Price to give us the signal that Resistance is holding before triggering the trade. In the first example, we waited for Price to come back below Resistance Price Level. In the second case, we waited for Stretch Release arrows to appear.

3) We pre-define the Stop Level. And put a Hard Stop Order as soon as our Short Entry fills. In both our Short Day Trades, AUDUSD did not trigger the Stops.

4) We pre-define our Initial Profit Target and put Profit Taking Limit Order at that level. We book profit without being greedy. At least on half position size. And move our Stop on remaining position to make sure it is a Risk-Free trade from then onwards.

5) We don't overtrade. Once we complete our planned Day Trade, we stop. 

 
These were just two examples of how Superior Profit Traders take profitable Day Trade on Forex every day.

Once you study the CUE System using the detail training material at Superior Profit Education Center, you will learn several additional ways to pre-plan and execute Day Trades confidently.

And you can take the Day Trades on Forex, Future, Stock or any other instrument that fits your risk tolerance and lifestyle.

​Sagar
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