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2008issue C121-3

Constructing an intraday trend procedure with confirming close, retest, and planned exits

An archive construction treats an intradade trade as an open and close inside a twenty-four-hour window. Trend is read from exponential averages on the close, a later candle must validate the cross, a missed move is entered only on a return toward the fast average while a MACD window stays open, and stop, time, and news exits are written before the hold.

  • Treat the hold as an open and close inside a twenty-four-hour window, and write the plan before the position exists so rules are not invented during the hold.
  • Read trend from an eight-period exponential average crossing a twenty-one-period exponential average on the close, then require a candle close beyond both averages before a buy or sell is allowed.
  • If the cross is missed, wait for a return toward the eight-period average, and keep the buy or sell window open only while the twelve-twenty-six-nine MACD histogram stays on the agreeing side of its signal line.
  • Pre-define a stop through the slow average or a trailing stop a few points beyond the prior bar extreme after allowing for spread, close or protect at breakeven around news and after a short unfilled hold, and stand aside when the market is sideways or the trend is unreadable.
Entries in this reading3 entries
Current trackTrend following168 readingsStop-loss order297 readingsMoving average597 readings

Write the plan before the hold

The procedure treats an intraday trade as an open and close inside a twenty-four-hour window. It requires a written plan so rules are not invented during the hold.

Confirm a moving-average regime

Trend direction is read from an eight-period exponential average crossing a twenty-one-period exponential average, both calculated on the close. The cross and the candle close that follows define the trend regime.

A buy is not taken on the cross alone. The candle must then close above both averages. A sell requires a close below both averages.

Enter on a return toward the fast average

If the cross is missed, the construction waits for price to return toward the eight-period average. The entry stays close to that average rather than chasing the move.

Keep the oscillator window in agreement

A twelve-twenty-six-nine MACD keeps the buy window open only while its histogram stays above the signal line. It keeps the sell window open only while the histogram stays below the signal line.

Pre-define stop, time, and news exits

Stops can be a close through the slow average, or a trailing stop a few points beyond the prior bar extreme after allowing for spread.

Before major news, open trades are closed or protected at breakeven. New entries wait until after the release.

If the objective is not reached after a short hold, the position is at least moved to a breakeven stop so time in the market stays bounded.

Allow a decision not to trade

The method is intended for a trending market and not for a sideways one. A fourth allowed answer is that the trend is unreadable, in which case no trade is required.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
22 of 38 in the Trend following track
201056-61 pp.Next on Trend followingMechanical trend-following system design, stops, and validationTrend-following is treated as preferable to anti-trend methods because it avoids the impractical task of picking tops or bottoms.
All readings on this track · 38 readings
  1. 1986A Marshall Wave book is assembled one confirmed stance at a time
  2. 1987Operator gut check when two systems conflict
  3. 1988Visual trend rules need one testable procedure
  4. 1988Audit trend and breakout rules sold without tests
  5. 1992Weekly 4 percent close reversal case study
  6. 1992Write down the plan, then wait for the cross
  7. 1994Constructing a three-rule moving-average system
  8. 1995Weekly long-only trend rules with a gated retracement exit
  9. 1997Constructing rainbow charts with repeated smoothing
  10. 1997Three-line break as a one-parameter mechanical filter
  11. 2000Nested horizon trend alignment with a momentum stack
  12. 2001When certainty turns off the stop
  13. 2001Price must confirm every setup
  14. 2001Constructing a color stack from every lookback
  15. 2002Evaluating mechanical trend signals from ten-session average excursions
  16. 2004Trend pullbacks with a fifty-day average and relative strength index
  17. 2005Stochastic overbought as a trend-regime state
  18. 2005Trend-following as one testable signal procedure
  19. 2007One checklist for entry, exit and abstention after a market switch
  20. 2008Parallel listings and divergent trend behavior
  21. 2008Recovery headlines versus trend-regime rules
  22. 2008Constructing an intraday trend procedure with confirming close, retest, and planned exits
  23. 2010Mechanical trend-following system design, stops, and validation
  24. 2010A trading-plan that sets entry, stop, trail, and pause together
  25. 2010Multi-horizon cycle signals, trend filters, and stops
  26. 2012Weekly bear-market and shock signals as a mechanical procedure
  27. 2013A 2013 rates week as a structure-first exit drill
  28. 2013Trend following as one testable procedure
  29. 2013A forex veto checklist: trend, pair economy, and crowd bias
  30. 2015Relative-strength-index rules under a 20-percent trend filter
  31. 2015Trend-gated oscillator entry and exit rules
  32. 2016Trend process versus end-goal trading
  33. 2017Gold as a classroom for one midterm-trend procedure
  34. 2017Falling-knife FX longs wait for a four-hour trend turn
  35. 2018A closed procedure for quarterly sector rank slots
  36. 2018A recursive median as shared state for trend rules
  37. 2020Moving-average construction as an objective trend filter
  38. 2020Constructing first and second cross trend entries
By fieldEntry and exit rules327 readingsBy year2008150 readings
All 168 readings tagged Trend following
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