Background
Linda Raschke is one of the most successful female traders in history and a former S&P pit trader. She was featured in New Market Wizards and co-authored Street Smarts, one of the most influential short-term trading books. She won the 2024 US Investing Championship at age 64 with a 434% return, proving her methodology's longevity across decades and market conditions.
Core Methodology
Raschke is a short-term swing trader who primarily uses mean-reversion and momentum strategies across futures and equities. Her approach combines classic technical analysis with market structure analysis and intermarket relationships. She focuses on 2-5 day holding periods and emphasises volatility expansion/contraction cycles.
Key Trading Rules
- Look for 'stretch' — when a market has moved too far too fast (2+ ATR daily range), expect mean reversion
- The 'Holy Grail' setup: a pullback to the 20-period EMA during a strong trend (ADX above 30)
- NR7: the narrowest range of the last 7 days signals an imminent volatility expansion
- 3/10 oscillator: fast EMA (3) minus slow EMA (10) for momentum direction and divergence
- Opening range breakout: the first 30-minute range often defines the day's directional bias
- Risk management: never risk more than 1% per trade. Be willing to re-enter after being stopped out.
Key Concepts
Books & Resources
Street Smarts by Linda Raschke & Larry Connors. New Market Wizards interview. LBRGroup.com. 2024 US Investing Championship (434% verified return).