Linda Raschke has been a full-time professional trader for 40 years. She is a key trader for many large investment funds and also established her own investment fund in 2002. Let’s see the principles that have helped her consistently profit for 40 years, guys.
Linda Raschke has been a full-time professional trader for 40 years. She is a key trader for many large investment funds and also established her own investment fund in 2002.
Linda Raschke’s full name is Linda Bradford Raschke, born in 1959 in Pasadena, California, is an American financier mainly trading in two fields: Commodities and futures contracts. You can refer to her current activities via Twitter at https://twitter.com/
Raschke began his professional trading career in 1981 as an equity options market maker as a member of two exchanges. She began her trading career on the Pacific Stock Exchange and later moved to the Philadelphia Stock Exchange. She became a Commodity Trading advisor in 1992. Since then, she has been a principal trader for several funds and started her own hedge fund in 2002. Linda’s investment funds are rated by BarclaysHedge 17 of the 4,500 best performing funds over five years and her early successes were noted by Jack Schwager in his popular Market Wizards series.
Linda Raschke had audited trading results and was interviewed in Jack Schwager’s book “Market Wizards” in 1992. Linda Raschke was identified as a market wizard, on par with Mark Minervini and Mark Minervini. many other legendary traders.
I. Linda Raschke’s Professional Trading System
Linda Raschke has created many professional trading systems that are still in use today.
1. Once a stock has truly entered the uptrend wave , it will increase in price for a period of 2 months or even up to 6-8 months, so investors do not have to rush if it has just started. increase.
“What if it goes up” is the fear of many stock investors. The reason is that they have not been able to distinguish between real rising stocks and “following” stocks. A stock that really increases will at least increase for 2 – 6 months or even longer. As for the rising trend of following stocks, it only takes about 2-3 weeks to end. Buying the right leading stocks on the rising wave can yield 20-30% profit even if bought late is a normal thing in the stock market.
2. Don’t be too confident
Investing in stocks has taught me not to think that my intelligence can beat the market. All the money she made from trading is proof that most people make mistakes. The crowd even made mistakes many times.
Through trading, she learned one thing in the market, which is that crazy crowds are often irrational and when they are overwhelmed by emotions, that is when they always make mistakes. Linda Raschke also said that the intelligence you have if you don’t practice and learn and use it to fight the market immediately is an extremely wrong thing. You are too confident when entering orders, you put your ego at risk and you will definitely continue to lose money. Don’t be too confident, work hard to learn and practice and your investment will one day be successful.
3. Combine trading strategy with Pivot points – pivot point strategy
Pivot points strategy is used very effectively in short-term transactions, when traders want to find profit opportunities on small fluctuations in the market.
Pivot points are used for both investment methods: bouncing back after hitting resistance levels (Rang-bound) and breaking resistance levels (Breakout). Rang-bound traders use Pivot Points to find the points at which the market will reverse. Breakout traders use Pivot Point to identify the levels at which the market will break the resistance level and predict a “boom” to occur in the market.
The previous day’s high and low are important pivot points that show where buyers and sellers were the previous day. Therefore, watch to see if the market retests or reverses from these pivot points.
4. Buy at the first pullback after the price sets a new high. Sell immediately after the first rally ( first rally ) after the price creates a new bottom.
5. If the market is strengthening or weakening , it must show momentum in the following day (for example, there must be a follow through day after a strong bull session).
6. The wider (larger) the gaps appear, the higher the likelihood that the trend will continue.
7. When the market trades around the previous day’s peak or bottom, it is a good indicator that the market is strengthening or weakening.
8. The last hour of trading often tells us the truth about the current trend. “Smart” money often comes out in the last hour of trading. As the market still closes strongly, the uptrend will continue in the next session. When the uptrend ends, it usually reverses in the morning and then closes lower.
9. High trading volume at the close implies the trend will continue into the morning following the last half hour of trading. In a strong trending market, observe the possibility that the price will return to the main trend in the last hour of trading.
10. The financial world is created by human behavior. No one can know what will happen in the future. Therefore, a successful trader is not one who predicts what is going to happen, but must know how to react to every situation.
II. The most valuable lessons summarized by Linda Raschke:
Please watch and think about what you can learn from these lessons:
“I’m also a believer in predicting price action, but not too obsessed with it. I don’t set a price target. I get out when the price action tells me to get out, instead of trying to predict how far the price will go. You have to be willing to take what the market gives you.”
“Recording your transactions is the best exercise in the world.”
“I believe that short-term price waves can be predicted with any degree of accuracy. The longer the prediction time, the lower the accuracy. I am a believer in chaos theory.”
“You don’t have to be a scientist to be a trader. In fact, some of the best traders I have ever known were just unwise people. Formal education seems irrelevant to people’s trading skills.”
“I really appreciate the fact that I consider trading an art. Just like other artistic professions, like practicing piano, perfection is just a fantasy – I have never played perfectly, and I have never sold at the top and bought at the bottom – but the Consistency is achievable if you practice day after day.”
“I really feel like I could reveal all my trading secrets and it wouldn’t make a world of difference. Because most people cannot control their emotions or follow a system. And most traders wouldn’t follow my system, even if I gave them detailed instructions, because my approach wouldn’t feel right to them.”
“Understand that learning to understand the markets can take years. Focus your entire world on trading and forget about everything else. Get as close to successful traders as possible. Consider working for a successful trader for free.”
“There are so many unpredictable things that can happen in two months. For me, the ideal trade usually lasts 10 days, but I will approach each trade with the expectation of holding them for 2-3 days.”
“I believe my most important skill is recognizing patterns in the market. I think I learned this skill thanks to my exposure to music.”
“Good traders are those who can stay out for the majority of the month and only participate in a minimum of the best trades. The important skill lies in not losing money.”
“The third most important factor in achieving peak performance is attitude. Your attitude when encountering unavoidable difficult situations in the market. Attitude is how you handle losing streaks and winning streaks.”
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