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2014issue C1319-21

Long-only RSI pullback, reversal-bar-entry, and staged-trail construction

The archive specifies a long-only swing workflow as separate gates. A 200-period exponential moving average trend-gate and a two-period rsi-reset only admit a name. A reversal-bar-entry is the sole trigger. A staged-trail must run before the average-exit can take over.

  • Longs are admitted only while price holds above the 200-period exponential moving average trend-gate. The two-period rsi-reset is an oversold precondition, not the entry.
  • The rule-based entry fires only after that reset, on a reversal-bar-entry that breaks a run of lower highs.
  • After a fill, a staged-trail starts under the latest swing low and follows three-bar period lows until price recaptures a six-period exponential moving average. Only then does the average-exit apply.
  • Hard screens, an earnings-overlay, four-week comparative ranking, sector spread, and a portfolio-heat bound sit around that trigger sequence.
Entries in this reading3 entries
Current trackTrailing stop87 readingsRule-based entry174 readingsRelative Strength Index186 readings

How the construction is assembled

The archive describes a long-only swing procedure that keeps admission, entry, and exit on distinct rules. Price must remain above a 200-period exponential moving average before a name can be a long candidate. The construction treats that average as the trend-gate, the dominant-trend filter for the book.

While the trend-gate still holds, a two-period relative strength index reading below 5.00 is required as the rsi-reset. That print is an oversold precondition. It is not the entry signal.

UGI daily: 200-day gate, six-day average, and 38.42 trigger

UGI held above its rising 200-day exponential average through the summer of 2013, then slid back to that average by early September with the two-day RSI at 2.03. The six-day average has already rolled over. Closes and both averages are read from the TradeStation daily in Figure 1; the last print (38.29) and the two exponential averages (6-day 38.61, 200-day 37.78) are the platform header, and earlier points are taken off the plot to the nearest tenth. The article treats a break back through 38.42 as the only long trigger.
UGI held above its rising 200-day exponential average through the summer of 2013, then slid back to that average by early September with the two-day RSI at 2.03. The six-day average has already rolled over. Closes and both averages are read from the TradeStation daily in Figure 1; the last print (38.29) and the two exponential averages (6-day 38.61, 200-day 37.78) are the platform header, and earlier points are taken off the plot to the nearest tenth. The article treats a break back through 38.42 as the only long trigger.UGI · daily · 2013-05-20T00:00:00.000Z to 2013-09-09T00:00:00.000Z

Earlier closes and average readings are approximate to 0.1 USD; the raster does not support ticks finer than that. Last-bar values and the 2.03 two-day RSI are the printed platform/article figures, not digitized. The chart annotation also writes the trigger as 38.45.

The only entry rule

The rule-based entry fires only after the rsi-reset. The trigger is a reversal-bar-entry: a bullish bar that breaks the preceding string of lower highs. If that bar has not printed, the system does not enter, even when the trend-gate and rsi-reset are already in place.

Staged-trail and average-exit

After a fill, risk starts under the most recent swing low. The staged-trail then follows the lowest low of the last three bars until price recaptures a six-period exponential moving average. On a 60-minute chart the trail uses hourly lows.

Once price is back above the six-period average, the average-exit holds the position until a close back below that average. At that close the system returns to cash.

Screens and the earnings-overlay

Liquidity and volatility screens require average volume of at least one million shares and beta above 1.00 versus the broad large-cap index. An earnings-overlay then restricts longs to names that recently beat quarterly earnings estimates and, preferably, show positive surprises over the prior eight to ten quarters.

Ranking, book, and portfolio-heat

After the hard screens, names are ranked by four-week comparative relative strength versus the broad index and by whether their industry group is also outperforming. Holdings are spread across sectors.

Portfolio construction discussed a four- to six-name book, a cap of two new positions per day, and a portfolio-heat bound near 4 to 5 percent. The long-term average is also used as a filter that reduces position count in severe bear markets.

Review cadence

The same scan-and-trigger framework is specified for 60-minute, daily, or weekly bars. The chosen bar length matches how often new positions are reviewed.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
23 of 36 in the Trailing stop track
201559-61 pp.Next on Trailing stopDual-average regime, trigger candle, and trail as one daily scriptSet the dual-average-regime first: the 30-period simple moving average above the 90-period average is bullish, and the reverse is bearish.
All readings on this track · 36 readings
  1. 1988Half-day bars, a midpoint gate, and a bar-based trail
  2. 1989Packaging two-bar reversals into testable entry and exit rules
  3. 1989Weekly high and low averages as stop-and-reverse levels
  4. 1991Constant false-alarm rate for dominant-cycle stops
  5. 1992Tick-index extremes as continuation and turn hypotheses
  6. 1993Constructing layered stops from equity and structure
  7. 1993Filter crossovers with moving-average slope
  8. 1993Precommit stop bounds from equity and structure
  9. 1998Evaluating a trendline barrier that can only tighten a capped stop
  10. 1999Constructing common-number support and resistance
  11. 2001Four-step opening-hour bias and trailing stops
  12. 2004Make the trading system the star
  13. 2005A beginner stock case: stop, trail, and the pre-trade checklist
  14. 2006Sell stops that trail support after the buy
  15. 2006Treat a wave-3 label as unfunded until the stop rails are written
  16. 2008Test medium-term divergence with a trendline break and a trailing stop
  17. 2010Rule-based forex entry, stop and trail
  18. 2012Precommitting stops when one currency range templates another
  19. 2012Cat-ears as a downtrend continuation hypothesis
  20. 2013Three-average swing entry and a trailing average exit
  21. 2014Construct a dual quotient-copy trend filter under a frequency roof
  22. 2014Stop distance, size, and trailing swing invalidation
  23. 2014Long-only RSI pullback, reversal-bar-entry, and staged-trail construction
  24. 2015Dual-average regime, trigger candle, and trail as one daily script
  25. 2015Three-gate trend system: filter, trigger, and trailing stop
  26. 2016Construct HHLLS crossover and breakout entry rules
  27. 2017An appointment-trade around a scheduled political close
  28. 2017Golden-cross breakout rules for a swing entry
  29. 2017Breakout confirmation above round numbers, with nines as sell shelves
  30. 2018Classify diamond geometry before the breakout
  31. 2019When trails and stops betray the support read
  32. 2019One-triggers-the-other pairs for preplanned swing entries
  33. 2019One-triggers-the-other orders for a breakout and its stop
  34. 2019When the second decision unbounds planned risk
  35. 2020Last-Hour Breakout With a Same-Session Flatten
  36. 2020Couple the slow period to stop-loss and trailing-stop settings
By fieldEntry and exit rules206 readingsBy year201489 readings
All 87 readings tagged Trailing stop
Also on Trailing stop5 readings
1988Half-day bars, a midpoint gate, and a bar-based trail1989Packaging two-bar reversals into testable entry and exit rules1994Constructing entry and exit on a relative-strength MACD1998A two-bar swing is unfinished until it names the stop2001Four-step opening-hour bias and trailing stops