Trading systems
Trend-following systems: hold the move, not the forecast
A trend follower never predicts where price is going. They wait for a direction to establish itself, take a position in that direction, and hold it until the evidence changes. Everything else in these nine systems — the moving-average cross, the cloud, the ADX threshold, the weekly-then-daily screen — is a different answer to the same question: how do you tell a trend from noise without waiting so long that the move is over? One of them, Weinstein's Stage 4 short, asks it in the other direction: how do you tell a downtrend from a dip?
The claim it rests on
Price moves persist for longer than a coin flip would predict, and the cost of being late to a real trend is smaller than the cost of being early to a fake one.
Systems in this style
9 systems
- Trend followingBeginnerMechanical
Golden Cross / Death Cross
Technical analysis folklore; popularised by market technicians and the financial press
Own the market while the 50-day moving average is above the 200-day, and stand aside while it is not.
- Holding period
- Months to years
- Time needed
- Five minutes a week
- Trend followingBeginnerMechanical
SMA 5/10 Adaptive Crossover
Community / general technical analysis
Buy when the 5-day average crosses above the 10-day and sell when it crosses back — but after a choppy stretch, make the buy signal prove itself for a few bars first.
- Holding period
- Days to weeks
- Time needed
- 10 minutes after the close
- Trend followingIntermediateDiscretionary
Weinstein Stage Analysis
Stan Weinstein
Put every chart into one of four stages, and only own the ones in Stage 2 — above a rising 30-week moving average, breaking out on heavy volume.
- Holding period
- Months to over a year
- Time needed
- An hour a week on weekly charts
- Trend followingIntermediateMechanical
Weinstein Stage 4 Short
Stan Weinstein
Sell short only once a stock is below a 30-week moving average that has itself rolled over, and is lagging the market — then cover when price reclaims the line.
- Holding period
- Weeks to months
- Time needed
- 20 minutes a day while positioned
- Trend followingIntermediateMechanical
ADX + DI Directional Movement
J. Welles Wilder Jr.
Go long when the positive directional line crosses above the negative one — but only while ADX, a separate reading, says the market is trending at all.
- Holding period
- Weeks to months
- Time needed
- 15 minutes after the close
- Trend followingIntermediateMechanical
Elder Triple Screen
Dr Alexander Elder
Let the weekly chart decide which direction you are allowed to trade, then use the daily chart to wait for a pullback and buy into it.
- Holding period
- Days to weeks
- Time needed
- 30 minutes a day
- Trend followingIntermediateMechanical
Holy Grail Setup (Raschke)
Linda Bradford Raschke and Laurence Connors
When ADX confirms a strong trend, buy the first pullback to the 20-period moving average and target the prior swing high.
- Holding period
- Days
- Time needed
- 30 minutes a day
- Trend followingAdvancedMechanical
Ichimoku Cloud Trend
Goichi Hosoda, writing as Ichimoku Sanjin
Five lines that show trend, momentum and expected support in one picture — with the support levels drawn a month ahead of current price.
- Holding period
- Weeks
- Time needed
- 20 minutes a day
- Trend followingAdvancedDiscretionary
Livermore Pivot-Point Trend
Jesse Livermore
Wait for price to break decisively through a key level, commit a fifth of your intended position, and add more only once the market has moved in your favour.
- Holding period
- Weeks to months
- Time needed
- 30-60 minutes a day watching price
What they have in common
- Entries are always late by design — you are buying strength, not a low
- Win rates sit well under 50%, and the arithmetic still works because the winners run much further than the losers
- The exit rule matters more than the entry rule, and it is the part most people never write down
- They all suffer in ranges, and a range can last a year
The failure the style cannot design away
A sideways market feeds a trend follower a stream of signals that reverse within days. There is no filter that removes them without also removing the start of the next real trend — which is why every system here accepts a long string of small losses as the price of admission.
These are documented methods described for study. Nothing here is investment advice, a recommendation, or a claim about future returns — every system on this page has losing periods, and the pages say where.
Reading about a system is not having one.
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