The Discerning Trader: Linda Bradford Raschke by Thom Hartle
Contrary to popular opinion, dreams can come true. For every trader who's wished that he or she could just stay home and trade, there's one trader who succeeded in doing so. Linda Bradford Raschke began her trading career in 1980 on the floor of the Pacific Coast Stock Exchange before moving to the Philadelphia Stock Exchange. After six years of trading on the floor there, Raschke left to trade her own account from home. Eventually, her focus evolved into developing reliable technical patterns for generating trades and then following 20 different markets and waiting for the most lucrative trades to come to her. She has always been a consistently profitable trader using her research. So how does she do it?
How long have you been trading?
I've been trading for about . 13 years. For about the first three I hardly knew what I was doing, other than
using simple oscillators. I was working in San Francisco and there was an excellent business library there
that had all these wonderful books that are hard to get hold of nowadays, books on volume analysis and
Equivolume and this and that. I was constantly working on becoming a better trader.
And you were studying up a storm?
I should clarify what I just said. When I say I didn't know what I was doing, I didn't know how to apply
the knowledge I did have. I didn't know how to be discriminating in my choice of indicators. I was still
finding my own way. And even though I was trading full time and studying all this full time, it took three
to four years before the pieces finally fell into place.
I learned to wait for specific setups. If there was a trend, I would wait for buying during a pullback to a
moving average. I'd use an oscillator and time my trades. I'd also trade based on a certain divergence
pattern that happened, with a double bottom occurring l0 days apart (Figure 1). So I didn't try and
immediately fit the whole market into a framework of technical analysis; rather, I would focus on specific
patterns that occurred with a f air amount of regularity, and then try to take advantage of those patterns.
And that's pretty much what I do today with my technical analysis.