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.