Constructing first and second cross trend entries

A moving-average-oscillator and an oscillator-trend-line

One construction subtracts a slower moving average from a faster one to form a moving-average-oscillator. That series is then averaged to create an oscillator-trend-line, and crosses of the oscillator through the line are used as trend signals.

Simultaneous and delayed price confirmation

Simultaneous-price-confirmation is a same-bar filter. A buy requires the moving-average-oscillator to cross above its oscillator-trend-line on a bar whose low is higher than the prior low. The matching short requires a cross below that line on a bar that prints a lower high.

Delayed-price-confirmation waits for the first qualifying higher low or lower high after the trend has already turned. One specified long form first waits for the fast average to cross above the slow average, then buys on the first later bar that prints a higher low.

Sample tests of both confirmation timings used S&P futures and the related exchange-traded fund. Nearby fast, slow, and oscillator-average lengths were chosen separately by market.

First-allowed and later-allowed events

Applying a slow-K stochastic to the moving-average-oscillator produces a momentum-stochastic. The reading stays between zero and one hundred, so more than one overbought or oversold event can occur inside a single trend.

The banded first-event procedure takes only the first-allowed-event, the first qualifying momentum-stochastic reading after a newly recognized trend. That trade can exit when the reading reaches the opposite extreme.

Entry and exit thresholds can be set independently by side. One illustrated set used a long pair of 20 and 80 and a more demanding short entry of 85 with an exit at 20.

A later-allowed-event is a subsequent momentum-stochastic signal that is valid only after the first-allowed-event in the same trend has completed.

One later-event long sequence is as follows. The trend turns up, the momentum-stochastic falls below 50, then rises above 50, then later falls below 20. The trade ends if the momentum-stochastic exceeds 95 or the trend reverses.

Later-event shorts used a faster pair: entry when the momentum-stochastic rises above 60, and exit when it falls below 45 or the trend reverses. Not every trend produces a second qualifying event.