Market Wizard Linda Raschke Trading Principles

Market Wizard Linda Raschke Trading Principles

Market Wizard Linda Raschke Trading Principles

These quotes are from Jack Schwager’s interview with Linda Raschke from The New Market Wizards.

“The truth is that once you get down on the trading floor, you find that the traders come from all walks of life. You don’t have to be a rocket scientist to be a trader. In fact, some of the best traders whom I knew down on the floor were surf bums. Formal education didn’t really seem to have much to do with a person’s skill as a trader.” – Linda Raschke

Trading is more about the discipline to follow a system, flexibility with price action, and ego control than a formal financial education. Some of the best traders were simply street smart and understood the market dynamics of supply and demand.

“I’m also a firm believer in predicting price direction, but not magnitude. I don’t set price targets. I get out when the market action tells me it’s time to get out, rather than based on any consideration of how far the price has gone. You have to be willing to take what the market gives you.”- Linda Raschke

While having a bias on the direction of price action is where a trader may enter a trade it is the trailing stop and the magnitude of the trend that will tell you where to exit a trade.

“I really value the fact that I’ve learned to trade as a craft. Like any craft, such as piano playing, perfection may be elusive – I’ll never play a piece perfectly, and I’ll never buy the low and sell the high –  but consistency is achievable if you practice day in and day out.” – Linda Raschke

You don’t have to be a perfect trader to be profitable. Trading is a learned profession like any other.

“I truly feel that I could give away all my secrets and it wouldn’t make any difference. Most people can’t control their emotions or follow a system. Also, most traders wouldn’t follow my system, even if I gave them step-by-step instructions, because my approach wouldn’t feel right to them.” – Linda Raschke

Trading is about learning the right trading principles then building a profitable trading system that is right for your own risk tolerance and market beliefs.

“Understand that learning the market can take years. Immerse yourself in the world of trading and give up everything else. Get as close to other successful traders as you can. Consider working for one for free.” – Linda Raschke

It can take years of focused effort in studying price action and successful traders to truly learn the art of profitable trading.