Linda Raschke's Trading Insights and Strategies

Apr 6, 2025

Words of Wisdom Podcast: Linda Raschke on Trading

Introduction

  • Linda Raschke, a 40-year trading veteran, joins the podcast.
  • Known as one of the best female traders globally and author of "Trading Sardines."
  • Emphasizes that trading success is not gender-specific, it's bottom-line business.

Key Traits for Trading Success

  • Single-minded Focus: Emphasizes the importance of concentration and eliminating distractions.
  • Overcoming Adversity: Early life challenges can build character and stress resilience.
  • Self-confidence: Essential for trusting one's own trading decisions.

Importance of Process in Trading

  • Develop consistent routines and rituals for trading.
  • Essential to focus on the process rather than the monetary outcomes.
  • Process includes game planning, trade logging, and setting up personal support systems.

Trading Strategies and Concepts

  • Linda coined the term "Turtle Soup" in response to the Turtle Strategy's trend following.
  • Emphasizes the power of technical analysis over relying on news or order flow.
  • Encourages traders to study patterns and examples to increase understanding.

Adapting to Market Changes

  • Successful traders need to adapt to changing market conditions.
  • Human traders have an edge over AI in processing relationships and making intuitive decisions based on experience.
  • Pattern recognition and adaptability are key for long-term success.

Trading Psychology and Intuition

  • Intuition is built from compounding experience over time.
  • Important to act with confidence when recognizing patterns observed repeatedly.
  • Developing intuition involves observing market behavior and learning from past trades.

Managing Size and Risk

  • Raschke initially traded more aggressively in her younger years.
  • Implements an even bet size approach for managing funds.
  • Importance of risk management: time in the market, use of capital, and mental capital.

Learning and Education in Trading

  • Experience and doing your own work are crucial for learning.
  • Walk-forward learning is more effective than solely relying on educational content.
  • Simplify and focus on a few trading concepts rather than overloading with information.

Final Thoughts

  • Trading is about loving the game and staying dedicated to continuous improvement.
  • Successful trading requires focus, adaptability, and a strong understanding of the process and risk management.

Links

  • Check out Linda Raschke's book "Trading Sardines" for more insights into her trading philosophy.