Linda Raschke’s 12 Technical Trading Rules

[qxr1011]

Market Wizard Linda Raschke’s Technical Trading Rules

1. Buy the first pullback after a new high. Sell the first rally after a new low.
2. Afternoon strength or weakness should have follow through the next day.
3. The best trading reversals occur in the morning, not the afternoon.
4. The larger the market gaps, the greater the odds of continuation and a trend.
5. The way the market trades around the previous day’s high or low is a good indicator of the market’s technical strength or weakness.
6. The previous day’s high and low are two very important “pivot” points, for this was the definitive point where buyers or sellers came in the day before. Look for the market to either test and reverse off these points, or push through and show signs of continuation.
7. The last hour often tells the truth about how strong a trend truly is. “Smart” money shows their hand in the last hour, continuing to mark positions in their favor. As long as a market is having consecutive strong closes, look for up-trend to continue. The up trend is most likely to end when there is a morning rally first, followed by a weak close.
8. High volume on the close implies continuation the next morning in the direction of the last half-hour. In a strongly trending market, look for resumption of the trend in the last hour.
9. The first hour’s range establishes the framework for the rest of the trading day.
10. A greater percentage of the day’s range occurs in the first hour then was the case in the past, and thus it has become increasingly important to trade aggressively if there are early signs of a strong trend for the day.
11. There are four basic principles of price behavior which have held up over time. Confidence that a type of price action is a true principle is what allows a trader to develop a systematic approach. The following four principles can be modeled and quantified and hold true for all time frames, all markets. The majority of patterns or systems that have a demonstrable edge are based on one of these four enduring principles of price behavior. Charles Dow was one of the first to touch on them in his writings.Principle One: A Trend Has a Higher Probability of Continuation than Reversal
    Principle Two: Momentum Precedes Price
    Principle Three: Trends End in a Climax
    Principle Four: The Market Alternates between Range Expansion and Range Contraction!
12. In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word – Nobody! Thus the successful trader does not base moves on what supposedly will happen but reacts instead to what does happen.

another variation of buy low sell high
useless rules imho because that can not a substitute the method

if that's all what she has she will be through in a month trading intraday her own money....

 

[Visaria]

another variation of buy low sell high
useless rules imho because that can not a substitute the method

if that's all what she has she will be through in a month trading intraday her own money....

PMSL!!!

 

[wrbtrader]

another variation of buy low sell high
useless rules imho because that can not a substitute the method

if that's all what she has she will be through in a month trading intraday her own money....

She could be smart enough not to apply some rules in certain market conditions and apply others in certain market conditions.

She's been around the block long enough than most...I' sure she's not applying any particular rule to every market condition that shows up.

Reminder, those rules are not trade signals. She has trade signals that she uses in combo with those rules as do other traders that uses them.

 

[qxr1011]

ok, lets leave her a lone (along with the block she was around (half of wall street was around the block - so what ?) , but rules r useless, for traders at least

 

[RedDuke]

ok, lets leave her a lone (along with the block she was around (half of wall street was around the block - so what ?) , but rules r useless, for traders at least

Why? Is it easy to implement them? Hell, no. But the framework does work.

 

[qxr1011]

Why? Is it easy to implement them? Hell, no. But the framework does work.

there is no framework there: just some ideas that should not be called rules since they luck specificity

"buy low sell high" is an idea as well...

the idea may be behind the rule, but it is never its substitution

 

[wrbtrader]

ok, lets leave her a lone (along with the block she was around (half of wall street was around the block - so what ?) , but rules r useless, for traders at least

Ok, I get it. You used them with your trade method and it didn't work for you.

In contrast, as stated earlier...I've been using one of the rules listed for a very long time and it works well with my trade method. Regardless, like I said, most of the rules she did not designed. They were here before she became a trader.

Markets been here a long time...it didn't start the day she became a trader. Some folks like to attach something to someone when the hear something they've never heard before. That's why some say they are her rules...they never heard it before and assume when they first heard her say it...its her rules.

Anyways, they are GENERAL rules. You still need a trade method and context to apply them within.

Works for some and does not work for others...that's normal because they are subjective rules (generalities).

 

[qxr1011]

again rules are something specific generalities are not

buy low sell high - is generality because it does not give you specificity of determining what is low enough to enter the position and what is high enough to exit it

she uses words like weakness strength etc., etc - these are general words..

rule on the other hand defines what is weakness what is strength

etc etc..


it's her ideas..., if she relies solely on them then she does not know how to trade (and i do not care how many time she was around the block )

if she has rules, then its something else, not what is shown in the original post

 

[wrbtrader]

I have to disagree...to me they are subjective and generalities as I stated before.

Regardless, I've seen them (these rules) before she wrote about them and she does NOT rely soley on them. One of the rules is actually an old Japanese market saying from Rice futures back in the 1800s...I'll let you try to figure which rule is that.

As to her trade methods...they have not been discussed in this thread. Therefore, without that information about the specifics of her trade methods...these rules are just subjective. Simply, use them with your trade method anyway you want.

Yet, if you want to use these rules with the same trade method like her, please contact her about such because I don't think anyone here knows her trade methods.