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1992issue C111-11

Write down the plan, then wait for the cross

A weekly written market opinion, a pre-session what-if plan, and a moving-average cross belong to one trading procedure. Oscillators and sentiment may prepare the trader, but only an objective trend test authorizes entry, exit, or sitting out.

  • A weekly written reassessment tests how firm the market opinion is and whether open positions still match it.
  • Oscillators, sentiment, and long-cycle advance-decline warnings stay in the background until a moving-average cross confirms a change in direction.
  • The Pre-trade checklist names the current trend, the price that would change it, and wrong-side what-if paths before the session starts.
  • After three or four profitable days, size is cut, being long is kept separate from being bullish, and a changed market view forces the whole book to realign.
Entries in this reading3 entries
Current trackTrend following168 readingsPre-trade checklist245 readingsTrading psychology process376 readings

Opinion, checklist, and cross

A weekly written reassessment of market opinion is used to test how firm that opinion is and whether current positions still match it.

A pre-session plan names the current trend, the price level that would change it, and wrong-side what-if paths so reaction time is reduced if the market invalidates the working view.

Investment-horizon direction is judged with major averages versus their 200-day moving averages. A reading above that average is treated as permission to stay constructive rather than move to cash or short. Shorter-horizon trading uses a shorter moving average, including a weighted 10-day average, as an objective test of whether price has actually changed direction.

Background is not a trigger

Oscillators and sentiment readings are treated as get-ready background, not action signals, because a market can remain overbought or oversold until a moving-average cross confirms a trend change.

Advance-decline divergences lasting about five or six months, including a peak dated February 14 and a 1987 analog of similar length, are treated as long-cycle warnings rather than same-day trade triggers.

Size, stance, and the whole book

After three or four profitable trading days, position size is reduced because a trend-following stance can become vulnerable in chop and a winning streak can erode discipline.

Short-horizon work requires separating being long from being bullish so yesterday's opinion does not lock the trader into today's tape. If the market view changes, even a strong individual long is sold so the whole book is realigned to the new market direction.

Only the trend test can act

Editorial: TradersWeek reads this as one Trading psychology process, Pre-trade checklist, and Trend following procedure. The critique is aimed at acting on a written view, an oscillator, or a long-cycle warning before the moving-average test confirms a change in direction. A written opinion and a checklist prepare the trader. They do not replace the cross that authorizes entry, exit, or sitting out.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
6 of 38 in the Trend following track
19941-8 pp.Next on Trend followingConstructing a three-rule moving-average systemMechanical-system construction is presented as three stages: state a theory of how trades might work, convert that theory into explicit rules, then evaluate the rules.
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 fieldDecision process416 readingsBy year1992153 readings
All 168 readings tagged Trend following
Also on Trend following5 readings
2007One checklist for entry, exit and abstention after a market switch2013A forex veto checklist: trend, pair economy, and crowd bias2016Trend process versus end-goal trading2001Price must confirm every setup2006Relocating trading certainty to the decision process