Trading Strategies That Were a Revolution: Three Strategies of Linda Raschke
Author: Igor Sayadov
It is generally accepted that there are much fewer women in trading than men, but this does not mean at all that their influence on the trading establishment is a bit less. In this series of posts we will introduce you to the bright representatives of financial markets, whose activities have not gone unnoticed. And the first one will be Linda Raschke.
Who is Linda Raschke?
Linda Bradford Raschke is a famous and talented trader. She was born in the USA in 1959. She has been trading for over 35 years. For the start, she used to help her father when she was young. Then, she worked at the exchange. And in 1992, she founded her own company LBR Group. In 1993, she extended her horizons and started managing investor money. In 2002, she founded a hedge fund that, according to Barclays Hedge, became the 17th out of 450 active funds.
Mostly, Linda Raschke traded S&P 500 futures and successfully applied her own trading systems on the currency and commodity markets.
As a rule, her positions are short-term, no more than 10-15 minutes. A position holding for up to several weeks is more of an exclusion.
She used to carry out 3-4 trades a day. In 2015, she finished her career as an active trader and took up delivering lectures and organizing workshops for analysts and market makers.
Linda Raschke is the author of several books, such as:
- "Street Smarts. High Probability Short-Term Trading Strategies" (co-authored by L.Connors);
- "Trading Sardines".
The 80-20 trading strategy
This Raschke's strategy does not require any indicator; it is short-term, intraday, based on the idea of the false breakaway of a range.
At the basis of this strategy lies the formation of a specific intraday candlestick. Particularly, a candlestick with a long body and short shadows. If the body takes up 80% or more of the candlestick, while the shadows constitute 20% or less, such a candlestick is considered to signal next day trades. Raschke noticed that, in such a case, a reversal of the market is highly probable the next day. Such a candlestick was named momentum candlestick...
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Sincerely,
RoboForex team