I first heard about Linda Bradford Rascke when, I I read the book New Market Wizards. She was only female trader interviewed furthermore, she was a short term trader,rather than a long term trend follower and most of the great traders, tend to be long term trend followers, as its seen as a far higher odds method of trading. The fact she day traded always interested me and while its not the type of trading I do, she has been successful at using short term trading strategies for decades. You can get a load of great info on her strategies online and also some great Youtube videos. In this article, we will give a quick summary of Linda Rascke trading strategies and philosophy of trading.

Short Term trading

Linda Rascke is a a short term trader and believes that short term moves are far more predictable than long term moves (which is the opposite of most of the worlds top traders) and she strongly believes in chaos theory which postulates, the further out you look in terms of time, the more likely the prediction is to be wrong. An example of this would be weather forecasting, where short term predictions would normally be more accurate than long term ones.

Trading Strategy

In terms of entry to trades, she believes this is critical and in any short term trading it is but she is only interested in price direction, not the size of the move and let's the market tell her, when a trading signal should be liquidated. Like all great traders, she will trade against the herd in volatile markets and sees these as some of the best trades, comparing the market to a rubber band. If a rubber band is stretched to much, it will eventually recoil back in the opposite direction and this happens in a trade, the snap back gives her a profit.

One of the keys to her success (and she wins around 70% of her trades) is her ability, to spot patterns in the market. She credits this to studying the piano which she believes, gives her the ability to patterns which other traders don't. Her strategy is flexible and uses indicators but relies on intuition which shows her the right way, to use the indicators she using in the right way at any specific time. It's a rule based strategy but very fluid in its application. 

While she is not trading Forex markets and is more a stock index trader, I am sure she would be able to trade any market successfully and below are some quotes I have picked out which are from the New Market Wizards interview which I think any trader, should understand, before they start trading:

Quotes On Trading Success

On taking losses and confidence:

“Not at all. It never bothered me to lose, I always knew that I would make it right back. I always knew that no matter what happened, I could go into any marketplace, with any amount of money and make a living” (Linda Bradford Rascke)

The true great traders have no fear of taking losses and the reason is they have confidence that they will make money long term and short term losing periods are just part of trading any market.

On fear of losing and correcting mistakes:

“Never fear the markets. Never fear a mistake. If you do make a mistake, don't try and complicate the mistake by trying to hedge it – get out” (Linda Bradford Rascke)

Any trader will make mistakes and if you don't like to look stupid at times then don't trade Forex or any other financial markets. The difference between a winner in Forex trading and a loser is the winner will ackknowledge their mistakes and the loser won't. Any Forex trading strategy is based on strong money management so if you have made a mistake with your trading signal – just get out the market as quickly as you can and minimize the loss.

You are on your own when you trade and no one can help you:

“Remember that a trader is someone who does his own work, has his own game plan, and makes his own decisions”(Linda Bradford Rascke)

The above is true of any successful Forex trader they have their own plan and make there own decisions and don't follow others. You have to have a plan your comfortable with or you will never trade it with discipline.

This is my favorite but of trading wisdom which I can personally associate with:

“If you are ever tempted to seek out some elses opinion on a trade, that's usually a sure sign that you should get out of your position”(Linda Bradford Rascke)

I think the above quote is one which is so true and in my early career as a currency trader, I would have a losing trade and talk to other people in the hope they would tell me I was right about my trade, even though it was losing. I knew I should get out the market and take my loss and just let it get bigger. With any trading strategy never try and get opinions in terms of opening a trade or on a trade you have in the market – if you are having to seek an opinion on a trade, deep down you know its wrong and should get out the market.

This has always been true and while it's a well covered subject lack of discipline is one of the major reasons traders continue to lose with their trading systems and strategies:

"I  truly feel that if I could give away all my secrets and it wouldn't make any difference. Most people can't control their emotions and follow a system". (Linda Bradford Rascke)

This really leads on from the above points and is true most traders simply cannot trade with confidence or discipline and following someone else’s trading ideas never works because you are unlikely to feel comfortable with them. TRading success is a personal experience, built on understanding of a method, confidence in logic and the discipline to stick with your method.

In Conclusion

One of the true trading greats and one you can learn from and as a trader I have never met a day trader in 25 years of working as a Forex broker who made money but Linda does. While I am not a day trader, her view of trading and what it takes to be successful is essential, currency trading education for any new trader.