13 May, 2020 | AtoZ Markets - Linda Raschke start her professional trading career in 1981 as a market maker. Linda traded successfully in equity options as a member of two exchanges. She was also the President of LBR Group, Inc, and registered in CTA (Commodity Trading Advisor) and a money management firm.
Raschke was also President of LBR Asset Management, a CPO (Commodity Pool Operator). Moreover, she started her trading career on the Pacific Coast Stock Exchange. Later she moved to the Philadelphia Stock Exchange.
Linda Raschke Biography
In 1992 Linda became a registered CTA (Commodity Trading Advisor). Since then, she worked as a principal trader in several funds and started her own hedge fund in 2002. She was one of the leading traders in the country.
Linda Raschke technical trading rules and methods are well known all over the world, followed by many other successful traders.
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Linda Raschke has been a professional trader for over 38 years, and she also featured in Jack Schwager's book, "The New Market Wizards". Furthermore, she also took place on the CNBC's financial reporter Sue Herera's book, "Women of the Street: Making It On Wall Street --The World's Toughest Business."
Moreover, in 1995, Linda co-author the best-selling book, "Street Smarts - High Probability Short Term Trading Strategies", with Laurence A. Connors. She also worked as a Board of Directors for the Market Technicians Association and President of the American Association of Professional Technical Analyst.
Linda Raschke Trading Strategy
Linda Raschke trading strategy does not require any indicators. Her trading system was short-term, intraday, based on the idea of the false breakout of a range. The strategy lies in the formation of a specific intraday candlestick.
Mainly, a candlestick with a long body and short shadows. If the body covers 80% or more of the candlestick, and the shadows form 20% or less. These types of candlestick consider signaling the next day's trades—candlestick like this called momentum candlestick.
The Turtle Soup Strategy
The turtle soup strategy is a mid-term or long-term, which do not require any indicator. Moreover, the position of trading has held for 2-3 days, and the key point of this strategy is the 20 days price range.
For this strategy, the calculation starts any day of the market analysis. Besides, the strategy based on false breakout of the range.
The main work starts, when the minimum or the maximum of the range broke earlier than three days. After that, the price reached this maximum or minimum. Above the price return back to the range, an order heading inside the range is open.
Also, when the minimum is broken through. A buy order is open if the price enters the range starting with 10 points from the minimum of the initial range. Moreover, the ideal trailing stop for the trade is 50 - 70 points.
The Anti Trading Strategy
The anti-trading strategy's main idea is to trade the trend after the completion of correction. Mainly, the system has been used with the Stochastic Oscillator for defining the pullback and the continuation of the main trend.
Moreover, Stochastic parameter settings are 7.10.3. The trend movement is in consequence with the slow line of the Oscillator. It signals when a pullback is going to end.
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Along with this, the entry comes when both lines move in the same direction. Your main attention should be on the hook under the slow line. The order held exactly one day, with the TP placed at the end of the day, and SL should be under the minimum or maximum of the signal candlestick.
Linda Raschke's Trading Tools
Linda Raschke's trading tool is very useful to find the upcoming definite momentum. She uses 5-day simple moving average and 2-day rate of change to identify the trade for the long run.
5 Day Simple Moving Average
Linda uses five days SMA for trend identification system. She had done comprehensive testing and research using this indicator and build models base on it. She uses five day SMA to determine that massive outlier price movement happens in the way of the trend in each market about 9 -10 times per year.
If the market closes on one side of its five days SMA for seven days in a row, then she considers this an extended momentum. In this extended momentum situation, Linda's models show that the trend has about 50% accuracy of persisting.
2 Day Rate of Change
Linda Raschke uses 2-day rate of change for short-term momentum indicator to develop a directive trend for the trading day. One of the core trading psychology is that momentum precedes price. Moreover, the rise of aggression from the bears or bulls before we see the price move, that will result from said aggression or momentum. She uses this method with the 2-day rate of change.
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Top 10 Linda Raschke Trading Rules You Should Know
- Plan your trades. Trade your plan.
- Keep a positive attitude, no matter how much you lose.
- Continually set higher trading goals.
- Successful traders are not afraid to buy high and sell low.
- Successful traders have a well-scheduled planned time for studying the markets.
- Continually strive for patience, perseverance, determination, and rational action.
- Never cancel a stop loss order after you have placed it!
- Never get into the market because you are anxious because of waiting.
- Losses make the trader studious – not profits. Take advantage of every loss to improve your knowledge of market action.
- The most difficult task in speculation is not prediction but self-control. Successful trading is difficult and frustrating. You are the most important element in the equation for success.
- Remember that a bear market will give back in one month what a bull market has taken three months to build.
- Expect and accept losses gracefully. Those who brood over losses always miss the next opportunity, which more than likely will be profitable.
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Many traders use many methods and strategies to become successful in their trading careers. Linda Raschke became successful by observing the market, dedicated her life to researching the market and its daily obstacles. Her tremendous experience in the market made her a successful and well-known trader of Wall Street.
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