Constructing a long, short, or flat pre-trade checklist

A written decision before the order

This article restates a pre-trade checklist: one written procedure for entry, exit, and standing aside before an order is sent. The archive method starts with a side of market and treats later technique as secondary if that choice is wrong.

Faster turnover after index futures

After index futures began trading in the early 1980s, the described shift was from holding stocks mainly for dividends and selling about once a year to entering and exiting many times within a year.

Floor access and electronic flow

In the mid-1980s the faster path to a fill still sat on the trading floor. Remote desks faced higher costs, less leverage, and no direct pit access.

During the October 1987 break, electronic order volume outran the floor, leaving participants unsure whether or at what price orders had been filled. After 1987, session decline limits expressed as a percentage were used to cut electronic flow to the floor so market makers could keep a two-sided book.

Wider electronic access in the 1990s is described as changing routing and data transfer, not market structure. Computer speed without market knowledge is treated as the failure mode.

Side of market comes first

The method begins with one side of market choice. That first output is a long bias, a short bias, or no position, also named as out or as flat. Later technique is treated as secondary if that choice is wrong.

Session liquidity as the execution filter

Time of day is an execution filter. Thin volume and liquidity leave little trend and an unclear direction. Richer volume and liquidity are treated as the window in which a move can be read. That window is session liquidity: the time of day when volume and available size are sufficient to read direction and complete an order.

An indicator map as the third gate

A pre-built indicator map is the third gate. It is used only to judge whether buying or selling is increasing so the long, short, or flat decision can be completed quickly. The indicator map is a small, pre-specified set of technical readings.

Key levels from stalls on the tape

Support and resistance are read from the tape. Levels where price stalled and retraced are recorded and then used as candidate entry and exit points. Those prices are key levels.

Support is a stall area that previously held price from falling and is used as a testable entry or exit hypothesis. Resistance is a stall area that previously capped an advance and is used as a testable entry or exit hypothesis.

An execution fallback when screens fail

Because platforms, datafeeds, and internet links can go down, the desk is specified with an immediate voice path to the broker, a paper blotter, and clearing-firm statements rather than the electronic screen. That specification is the execution fallback. A datafeed outage is treated as a halt or a channel switch, not as a reason to improvise.