Table of Contents
Linda Raschke sits down in this interview to unpack how a real pro thinks: a former floor trader, CTA, hedge-fund manager, and one of the most respected short-term traders of the past four decades. She traces her path from options market maker to discretionary tape-reader, sharing why the market’s “same but different” character keeps veterans humble and hungry. You’ll hear why Linda matters to every active trader: she’s blended old-school screen time with modern execution, built robust routines, and survived regime shifts without losing her edge.
In this piece, you’ll learn Linda’s practical playbook: how she plans after the close, stalks clean swings, uses relative strength to “go where the juice is,” and reads the open around key reference points. We’ll cover her risk truths (cut leverage when focus is split, expect drawdowns, and respect event risk), her “idea notebooks” for pattern recognition, and the mindset that actually compounds—patience, preparation, and persistence. If you’re a newer trader looking for a simple, durable process—or a seasoned one needing a reset—Linda’s approach will give you a clear, repeatable daily routine and a way to build real confidence trade by trade.
Linda Raschke Playbook & Strategy: How She Actually Trades
Daily prep: build a focused attack plan
Before the bell, Linda Raschke is already “paid.” Her edge starts with preparation—knowing which symbols have clean structure, catalysts, and relative strength. The goal is to show up with a short list and pre-planned triggers so execution is fast and unemotional.
- After the close, scan your universe and shortlist 8–15 symbols with clean swings and above-average range.
- Tag each idea A/B/C: A = trade tomorrow if trigger hits; B = needs one more day; C = watch only.
- Mark reference levels on each chart: yesterday’s high/low/close, overnight high/low (for futures), weekly swing points.
- Set alerts at your planned entry prices; no hunting during live action.
- Write one line of intent per A-setup: “Buy first pullback above 20-EMA if breadth positive; risk to swing low.”
Market structure first: trend, rotation, or range?
Linda treats the market like a living auction. Each day tends to fall into a few recognizable regimes—trend day, rotational day, or range day—and your tactics must match. Decide the regime early so you don’t fight the tape.
- Classify the session in the first 30–60 minutes using breadth, range expansion, and overlapping value.
- Trend day tell: early range extension that holds, sequential higher lows (or lower highs) on 5–15m.
- Rotational daytellsl: overlapping 30–60m bars, frequent mean-reversion to VWAP.
- In trend days, trade with the move; in rotational days, fade extremes back to VWAP/median.
- The regime is unclear, trade smaller and wait for the market to reveal itself.
Opening routine: trade the first pass cleanly
The open is where Linda does some of her best work—fast, prepared, and structured. The goal is to capture directional intent without chasing noise.
- Map a 5–15 minute Opening Range (OR); note OR high/low.
- Break-and-go: If price breaks OR and holds above/below for two closes, take the first pullback in that direction.
- Break-and-fail: If price breaks OR but snaps back inside, fade to the opposite OR band with tight risk.
- Gap rules: With gaps into prior resistance/support, look for a fade to VWAP; with gaps in trend direction and early breadth confirmation, buy the first higher low (or short the first lower high).
- Two-strike rule: If you take two opening trades and both fail, step aside until after the first hour.
Entry triggers Linda loves: simple, visual, repeatable
Her setups are price-action first, then a light indicator confirmation. Keep triggers objective so you can execute without hesitation.
- First Pullback in Trend: Enter on a pullback to the 9–20 EMA after a clear impulse; risk just beyond the prior swing.
- Breakout-Pullback Combo: Let the breakout happen, then buy the retest/hold of the breakout level; avoid buying the initial spike.
- Reversal at Exhaustion: Look for a spike into prior daily/weekly level + momentum divergence; enter on the first lower high (short) or higher low (long).
- Structure trumps signals: Only take triggers aligned with the day’s regime and higher-timeframe bias.
- If price hesitates for 3–5 bars after entry with no progress, scratch or reduce—time is a risk factor.
Pattern playbook: three high-quality edges
Linda is known for a few durable patterns that keep showing up across markets and decades. Pick one or two, master them, and size only when the tape matches your pattern’s “ideal conditions.”
- Turtle Soup (failed 20-day breakout):
- Short setup: Price pokes above the prior 20-day high and closes back below it; enter on the failure with a stop a tick above the extreme.
- Long setup mirrors the short at the 20-day low.
- Target the range midpoint or the 10-day average; trail once +1R.
- First Cross after Impulse (LBR 3/10-style momentum):
- After a strong push, wait for the oscillator pullback/cross that coincides with a price higher low (or lower high).
- Enter with risk under/over the structural pivot; scale out at +1R, trail the rest.
- Three-Push Divergence:
- Identify three marginal highs (or lows) with waning momentum into a daily/weekly level.
- Enter on the break of the micro trendline; stop beyond the third push extreme; target VWAP, then opposite band.
Risk first: position sizing and protective structure
Longevity is Linda’s hallmark. That comes from consistent risk limits and using structure to define when you’re wrong.
- Standard risk per trade: 0.25–0.75% of equity; size via distance to structural stop, not a fixed share count.
- Max daily loss: 1–1.5R; hit it and you’re done. Tomorrow’s opportunity matters more.
- Event risk rule: Flatten or cut size ahead of scheduled macro events unless it’s your explicit play.
- Add only on favorable movement (pyramid into strength/weakness); never add to losers.
- If volatility doubles vs. your backtest, halve size; if your focus is split, halve again.
Trade management: scale, trail, and time out
Professional execution is about managing winners as attentively as entries. Linda’s approach is calm and mechanical once in the trade.
- Scale ½ at +1R to bank progress; move stop to breakeven only when structure justifies it (e.g., new higher low).
- Use structure-based trails: last higher low in an uptrend, last lower high in a downtrend, or a 9/20-EMA staircase on strong trend days.
- Time stop: If price hasn’t made new progress within your expectancy window (e.g., 20–30 minutes intraday, 1–2 days swing), reduce or exit.
- Parabolic exit: If you catch a vertical spike into a daily/weekly level, take most off—don’t give back the gift.
- End-of-day rule for intraday: Flatten if the trend structure breaks in the final hour; carry only if the higher timeframe thesis remains intact.
VWAP and relative strength: go where the juice is
Linda constantly hunts for “the strong getting stronger” and uses VWAP to anchor mean-reversion and trend continuation decisions. This keeps you aligned with real participation.
- Longs: Focus on names holding above VWAP with rising cumulative delta or strong breadth; buy first pullbacks that hold VWAP.
- Shorts: Prioritize names rejecting VWAP from below on bounces; short first lower highs into VWAP.
- Sector/leader rule: Trade leaders within leading sectors; avoid back-of-the-pack laggards unless fading with a clear range context.
- If a name loses VWAP after your entry and cannot reclaim within two tests, tighten stops or exit.
- On rotational days, fade two-to-three standard-deviation moves from VWAP back to the mean with tight risk.
Multi-timeframe alignment: compress noise, expand signal
Linda stacks timeframes to keep the big picture in view while executing on lower timeframes. This is how you avoid counter-trend traps.
- Define bias on the daily: up, down, or range using swing structure and location vs. 20/50-day MAs.
- Execute on 5–15m for futures/active stocks; use 1h/4h for swing entries that align with daily bias.
- Only take intraday longs when the daily is up or building higher lows; be selective in fading daily trends.
- If daily and intraday conflict, reduce the size or wait for alignment.
- Weekly levels override all—respect them for targets and reversals.
Playbook for quiet vs. volatile regimes
Markets cycle. Linda adapts tactics so the same setup isn’t forced into the wrong environment.
- Quiet regime (narrow ATR, compressed ranges): Prefer mean-reversion to VWAP/20-EMA; take profits faster (0.7–1.0R first scale).
- Volatile regime (expanded ATR, wide bars): Favor trend-continuation pullbacks; let runners work with wider structure-based stops.
- Update your ATR and average swing size weekly; adjust position size and targets accordingly.
- In volatility spikes, widen stops to structure but cut share size so $ risk stays constant.
- If regime shifts mid-week, clear the book and rebuild the focus list.
Process and review: how pros keep the edge sharp
Linda’s longevity comes from tight feedback loops. Codify your routine so tomorrow is easier than today.
- Journal every trade: setup name, context, entry/exit rationale, adherence grade (A/B/C), and what you’ll do differently.
- Screenshot the chart at entry and exit; tag with pattern and regime to build your personal database.
- Weekly review: top 10 winners and losers—identify the common conditions and prune anything that bleeds.
- Pre-market rehearsal: re-read your A-setups and levels; say your triggers out loud to reduce hesitation.
- Post-market: mark up charts, update stats, and write tomorrow’s plan before you close the platform.
Build a Daily Attack Plan and Trade Only A-Setups
Linda Raschke starts winning before the bell by doing the simple, boring work others skip—curate a tight focus list and predefine triggers. She filters markets for clean structure, fresh catalysts, and relative strength, then tags ideas A/B/C so she knows exactly what deserves capital. A-setups get written intentions and exact entry levels; B’s and C’s are parked to avoid impulse trades. When the open hits, she isn’t hunting—she’s executing a plan and letting the tape confirm, not inventing new trades on the fly.
The discipline is ruthless: if an A-setup doesn’t trigger, it doesn’t get traded, period. If the plan gets two quick scratches, she steps aside and reassesses instead of forcing action. Levels are marked in advance—yesterday’s extremes, VWAP, and key swing points—so decisions take seconds, not minutes. This is the real edge Linda Raschke models: focus hard, act only on prepared A-setups, and keep your attention and risk where your work says the odds are best.
Size Risk by Volatility, Not Hope or Fixed Shares
Linda Raschke sizes positions off the market’s actual movement, not a random share count or gut feel. When ATR expands, her position shrinks, so the dollar risk per trade stays constant; when ranges compress, she can lean a bit more without changing total risk. She places stops beyond the structure—swing low/high, OR band, or a key level—and then backs into size using that distance. This way, one wild ticker can’t blow up the day, while a quiet setup isn’t starved of capital.
Linda Raschke also ties leverage to clarity: A-setups in aligned regimes get full risk, B-setups get half, and anything fuzzy earns a pass. She cuts risk around scheduled events unless that catalyst is the plan, respecting the jump risk that volatility injects. If realized volatility doubles versus her baseline, she halves size and widens stops to structure so slippage doesn’t punish her. The message is simple—let volatility tell you how big to go, and your equity curve will thank you.
Use Market Regime To Choose Tactics: Trend Or Rotation
Linda Raschke starts every session by deciding what kind of day it is—trend, rotational, or range—and she lets that call drive tactics. On trend days, she rides with strength, buying first pullbacks above the opening range or VWAP and trailing behind higher lows. On rotational days, she fades extensions back toward VWAP or prior value and takes profits faster. If the regime is unclear, Linda Raschke trades smaller and waits for clean confirmation instead of forcing guesses.
She reads regime using early breadth, range extension, and how price respects the opening range. If the range expands and holds with sequentially higher lows, she treats it as a trend and avoids counter-moves. If value overlaps and price whips back to VWAP repeatedly, she switches to mean-reversion plays with tight stops. This simple fork—trend tactics or rotation tactics—keeps entries, stops, and targets consistent with the tape instead of opinions.
Diversify By Strategy, Underlying, And Holding Duration For Resilience
Linda Raschke spreads her edge across multiple levers so no single market mood dictates her P&L. She mixes momentum continuation with mean-reversion and a few event-driven plays, choosing the tool that fits the tape rather than forcing one pattern everywhere. By rotating tickers, sectors, and futures contracts, she avoids concentration and lets relative strength guide where capital works hardest.
Time is another axis Linda Raschke uses to smooth equity swings. She pairs intraday campaigns with swing holds that align with the daily trend, so a choppy morning doesn’t derail a larger thesis. Correlation risk gets managed by staggering entries and making sure strategies don’t all fire on the same signal. If volatility spikes, she dials back the shorter-term exposure and lets higher-timeframe positions breathe. This blended approach keeps risk contained and lets multiple small edges add up consistently.
Trade Mechanics Over Predictions: Rules, VWAP, And Structured Exits
Linda Raschke doesn’t try to outguess headlines; she follows rules that make execution boring and consistent. She uses VWAP as an anchor—above it, she favors long pullbacks; below it, she leans short on lower highs—and lets price action confirm instead of opinions. Entries are simple: first pullback after impulse, breakout-retest, or a clean failed drive back through the opening range.
Exits are just as mechanical for Linda Raschke: partial at +1R, trail behind structure, and flatten when momentum stalls. If a trade does nothing for a set number of bars, she scratches—time is risk. She never adds to losers and only pyramids when a higher low or lower high prints. The result is a process where the tape dictates actions, not predictions, so edge comes from repetition, not being “right.”
In the end, Linda Raschke’s edge isn’t a magic indicator—it’s a repeatable way of working that survives every market mood. She prepares hard, classifies the day’s regime early, and only swings at her A-setups, letting clean structure and relative strength do the heavy lifting. Risk lives at the center of every decision: size flexes with volatility, stops sit beyond structure, and losses cap out by design, so tomorrow is always playable. Execution is mechanical—opening range rules, VWAP as an anchor, first-pullback entries, and time-based exits that prevent hope from hijacking trades. When the tape changes, she changes with it, rotating between continuation and mean-reversion, across symbols and timeframes, so no single market mood owns her P&L.
The bigger lesson Linda Raschke leaves traders with is discipline as a daily craft. Journal every campaign, screenshot the story, grade your adherence, and prune what bleeds—your database becomes your mentorship. Keep a small focus list, write intents in plain English, and let the tape confirm instead of predicting what “should” happen. Respect event risk, cut size when volatility jumps, and never add to losers—only to winners proving themselves with higher lows or lower highs. Do this long enough and consistency emerges: fewer trades, better trades, and a process sturdy enough to compound through bull runs, chop, and panic alike.
