Tape Reading
Hej
Nån som kan förklara vad tape reading är?
Är det nån form av trading på känsla? mer åt spekulation hållet?
Here u are!
#1 hehe vet inte verkar spännande :)
#2 Tack!
#4 mycket imponerande att lyckas i en aktie som abb. där slåss du mot snurror som kör mot schweiz och valutorna samtidigt. när man ser till det totala resultatet är det ju enormt. enb 10 förlustdagar på ett år Oo
Studies in Tape Reading av R.Wyckoff var den enda boken som Linda Bradford Raschke rekommenderade mig när det gällde att läsa om tape reading.
Mvh mouseman
känner du henne?
noop inte mer än mailkontakt när det gäller tradingfrågor
Mvh mouseman
Jack Schwager interview Linda Bradford.
Lägg märket till det hon säger about her goal:
There's no better satisfaction than playing a piece well, whether the instrument is a piano or the markets.
MVH//GC
Linda Bradford Raschke: Reading the Music of the Markets
Linda Bradford Raschke is so serious about trading that she traded right through the last day of her
pregnancy. "You didn't trade while you were in labor?" I asked her half-jokingly. "Well, no," she said, "but
then again, it was four A.M. and the markets weren't open. I did, however, put on a trade about three hours
after I gave birth to my daughter. I was short some currency contracts that were expiring that day. It
seemed like such a good trade that I couldn't bring myself to give up the opportunity of rolling the position
over into the next contract month." As I said, Linda Raschke is very serious about her trading. Raschke knew
that she wanted to be involved in the markets from an early age. When she was unable to land a job as a
stockbroker after graduating from college, she got into the routine of hanging out on the floor of the Pacific
Coast Stock Exchange every morning before work. Although the driving motivation for her daily visits to the
exchange floor was her fascination with the markets, this routine eventually led to an opportunity to become
a trader. One of the exchange locals befriended Raschke and taught her the basics of options. Impressed by
Raschke's enthusiasm and quick ability to grasp market concepts, he provided her with a trading stake.
Raschke spent six years as a floor trader, initially at the Pacific Coast Stock Exchange and then at the
Philadelphia Stock Exchange.
With the exception of one catastrophic event early in her trading career, Raschke made money steadily as
a floor trader.
In late 1986, when injuries suffered in an accident forced Raschke to trade from an office, she discovered
that she much preferred off-the-floor trading. Thereafter, she set up her trading office at home. Although
many floor traders who try to make the transition to office trading encounter major difficulties in the first
year of the changeover, Raschke's first year off the floor was actually her best ever. She continued to be a
consistently profitable trader in subsequent years.
When I first met Linda Raschke, I was impressed by her ebullient demeanor. I was shocked when she told
me that she was suffering from Epstein-Barr Syndrome-a malady whose hallmark symptom is chronic loss of
energy. "What you don't know," she said, "is that I have spent the better part of the past four days resting to
build up enough energy to make this trip." (Although I had offered to travel to her home to do the interview,
Raschke wanted an excuse to make a day trip to New York.) Even so, I could hardly imagine what she must
be Uke when she is fully healthy.
Raschke believes that she contracted her ailment because she had just pushed herself too farsimultaneously
trading full-time, taking care of an infant, dealing with hordes of workers as her home was
being remodeled, and actively pursuing her hobby of training and riding horses. Raschke even manages to be
upbeat about her illness. "I feel a tremendous amount of good has come out of this," she explains. "Instead
of trying to cram in everything before I turn thirty-five, I now realize that at thirty-three I'm still really young
and that I have many years of great opportunities ahead of me."
The first few hours of the interview were conducted at my office. We then continued our conversation at a
local Wall Street area restaurant. I kept eyeing my watch and hastening our conversation along throughout
dinner, because I was aware that missing her next scheduled bus home would mean a four-hour wait.
Although Raschke seemed relaxed and unconcerned, I didn't want to be responsible for her being stranded at
Port Authority Bus Terminal for that length of time. There are far better places to spend four hours (a Turkish
prison, to name only one).
==== When did you first get involved with the markets? ====
My father loved to trade the markets, although he never made any money at it. Being the oldest of four
children, I was enlisted to help him leaf through hundreds of stock charts, looking for some specific types of
patterns. My first real involvement in the markets came when I attended Occidental College. The school had a
program wherein ten students were selected each year to manage a trust set up by an anonymous donor.
==== What did you know about the markets at that time? ====
Not much. We made decisions based almost strictly on fundamentals. Anyone m the group could come up
with an idea, and it would be implemented if approved by the majority.
==== What did you leam from that experience? ====
I just learned that it was an awful lot of fun.
==== Did you get a market-related job after finishing college? ====
After graduating college, I went up to San Francisco to try to find a job as a stockbroker. I must have
applied to every brokerage firm in the city, and I was turned down by all of them. They didn't take me seriously.
To them, I was just a young kid who had graduated college. I was repeatedly told to come back in four
or five years. I finally ended up taking a job as a financial analyst with Crown Zeilerbach, a paper company.
As fate would have it, my office was only two blocks away from the Pacific Coast Stock Exchange. Since I
didn't have to be at work until 8:30 and the exchange opened at 7:30,1 started spending the first hour of my
day at the exchange.
==== What did you do there? ====
I just watched what was going on. After a while, people noticed I was there, and some of them went out
of their way to explain things. One trader explained the pricing of options to me, and I thought, "Gee, I can
do that." It didn't sound like such a big deal. The truth is that once you get down on the trading floor, you
find that the traders come from all walks of life. You don't have to be a rocket scientist to be a trader. In fact,
some of the best traders whom I knew down on the floor were surf bums. Formal education didn't really
seem to have much to do with a person's skill as a trader.
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==== How did your transition from observer to participant come about? ====
The person who had explained the basics of the options market to me thought that I would make a good
trader and offered to back me. At the time, I was applying to graduate schools to get an M.B.A. I thought to
myself, "I can either go to business school to get my M.B.A., or I can trade on the floor of the stock
exchange-hmm, which do I want to do?" It wasn't a hard decision.
==== On what basis was he willing to back you as a trader? ====
What has impressed me about other people whom I have ended up training or backing is their level of
interest. If someone has a strong enough interest or desire, it usually overcomes other obstacles. I think he
was impressed with my interest in the markets.
==== How big a stake did he give you? ====
As was standard procedure for traders backing other traders, we set up a partnership, in which I was the
general partner and he was the limited partner. He put up $25,000, with the agreement calling for a 50/50
split of the profits.
==== How were you making your trading decisions? ====
I would just buy options that were underpriced or sell options that were overpriced and hedge the
positions with other options or stock.
==== Wasn't it difficult for you as a novice to be competing with more experienced brokers trying to do the
same lypes of trades? ====
No, the options market was just incredibly inefficient in the early 1980s. You didn't really need an IQ over
100 to make money. After my first three months, I had made about $25,000.
Around that time, I got involved in selling calls on Cities Service, because the options were overpriced.
And why were they overpriced? Because the stock was a takeover candidate.
==== Did you know that at the time? ====
Oh sure.
==== But did you know how to factor that situation into the price? ====
I thought that I did. At the time, the stock was trading at $32. At the prices at which I was able to sell the
options, I knew I would be okay as long as the stock price didn't go above $55. Unfortunately, the takeover
was announced the afternoon before the options expired, and the stock jumped from about $34 to $65.
Suddenly, I discovered that you could lose $80,000 overnight.
==== So overnight you lost all your profits and your initial stake, and you were still in the hole for $30,000.
Who was responsible to make up that deficit? ====
I was, since I was the general partner.
==== Do you remember your emotional response at the time? ====
It wasn't so bad emotionally, because I had seen other traders around me lose much greater amounts in
sudden takeover situations. They were able to survive after taking hits of several million dollars. In comparison,
my situation didn't seem that extreme. Also, I felt that in any business where you could lose money
that quickly, you had to be able to make it back.
It almost sounds as if you were able to shrug it off.
I don't want to make light of this experience, because it was intimidating being faced with a mountain of
debt at the age of twenty-two. In fact, I still had $10,000 in debt left over from college student loans.
Fortunately, 1 was able to find another backer, and everything worked out. Overcoming that experience gave
me the confidence that I could overcome anything that might happen in the future.
==== How did you do after that point? ====
I made money steadily.
==== What made you decide to abandon floor trading for trading from an office? ====
In late 1986, I had a bad horse riding accident. I fractured my ribs, punctured my lung, and dislocated my
shoulder. I found it physically very uncomfortable to stand on the floor. That was the first rime I started
sitting upstairs and trading off a quote machine. I thought it was great! There were all these indicators and
different markets I could watch at the same time. Over time, I evolved my own trading style in the S&P
futures.
==== What is your trading style? ====
My niche is short-term trading, which is how I make my bread and butter. The occasional long-term trades
are frosting on the cake. I believe that only short-term price swings can be predicted with any precision. The
accuracy of a prediction drops off dramatically, the more distant the forecast time. I'm a strong believer in
chaos theory.
[A basic concept of chaos theory is that for aperiodic systems-i.e., systems that never exactly repeat
themselves and hence never find a steady state, such as weather or the markets-slight differences in variable
values or measurements can be magnified to have huge effects over increasing., periods of time. The
technical name for this phenomenon-sensitive dependence on initial conditions-has become better known as
the Butterfly Effect. As James Gleick described it in his excellent book, Chaos: Making a New Science, "In
weather, for example, this translates into what is only half-jokingly known as the Butterfly Effect-the notion
that a butterfly stirring the air today in Peking can transform storm systems next month in New York."] There
are too many unpredictable things that can happen within two months. To me, the ideal trade lasts ten days,
but I approach every trade as if I'm only going to hold it two or three days.
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I'm also a firm believer in predicting price direction, but not magnitude. I don't set price targets.
I get out when the market action tells me it's time to get out, rather than based on any consideration of how
far the price has gone. You have to be willing to take what the market gives you. If it doesn't give you very
much, you can't hesitate to get out with a small profit.
I put a great deal of effort into getting the best entry price possible. 1 feel this is probably one of my
strongest skills. In day trading, a good entry price is critical because it buys you time to see how the market
will react. If you buy because you think the market should bounce, but it only goes sideways, you'd better
get out. Part of the trading process is a matter of testing the water. If your entry timing is good enough, you
won't lose much even when you're wrong.
Some of the best trades come when everyone gets very panicky. The crowd can often act very stupidly in
the markets. You can picture price fluctuations around an equilibrium level as a rubber band being stretchedif
it gets pulled too far, eventually it will snap back. As a short-term trader, I try to wait until the rubber band
is stretched to its extreme point.
==== How do you determine when the market is near such an extreme? ====
One of my favorite patterns is the tendency for the markets to move from relative lows to relative highs
and vice versa every two to four days. This pattern is a function of human behavior. It takes several days of
a market rallying before it looks really good. That's when everyone wants to buy it, and that's the time when
the professionals, like myself, are selling. Conversely, when the market has been down for a few days, and
everyone is bearish, that's the time I like to be buying.
I also track different indicators. I don't think the specific choice of indicators is that critical, as long as you
have a good feel for interpreting the indicators that you use. Personally, I pay close attention to the tick [the
difference between the number of issues whose most recent tick was up and those whose most recent tick
was down], TRIN [a measure that relates the price and volume of advancing issues to the corresponding
figures for declining issues], and premium [the premium, or discount, of stock index futures to the
theoretically equivalent cash index price]. For example, if the tick is at an extreme level and falling- -480, -
485, -490, -495-and then just pauses--495, -495, -495- and the other indicators I watch are also oversold,
I'll often go in and buy at the market. Sometimes, I've actually bought the low tick of the day using this
method.
I really have no fear of buying into breaks or selling into rallies. Sure, once in a while the market will keep
on going, and I'll immediately be down a full point or more on the S&P. However, by waiting for a sufficient
extreme, even in such situations, the market will often snap back enough to let me out near even. Perhaps
my number one rule is: Don't try to make a profit on a bad trade, just try to find the best place to get out.
==== So when you have a bad trade, you don't dump it immediately. ====
That's right. I find that I can usually get out at a better price if I have a little patience, since the reason I
got into the trade in the first place was because the market was so overdone that a reaction seemed overdue.
Once I'm out, it's easy for me to get back in. If I buy back at a higher price, I just look at it as a fresh trade.
==== When did you set up your home trading office? ====
About three months after leaving the floor.
==== After spending years surrounded by people on the floor,, did you find it difficult to adjust to the
isolation of trading from home? ====
For the first four years, being off the floor was great-no distractions, no outside opinions. Last year,
however, the isolation started to really bother me. I got lonely. I tried talking to other traders on the phone
during. the day, but I found that it was distracting and lowered my productivity. I also tried establishing a
trading office with another trader, which worked great for a while until he left to establish a trading operation
in New York. And I tried hiring an assistant, but it didn't add to my bottom line. Now I try to deal with the
isolation by scheduling projects outside
of the trading day in order to keep me involved with the outside world. F m a member of the Market
Technicians Association and I try to attend every meeting. I have also worked with a programmer to develop
neural network trading indicators, which I'm now using as a market tool. [A key characteristic of neural
network programs is that they are not static; rather, they evolve as they "leam" from the data.] This project
has also led to lots of calls to other people across the country who are working on applying neural networks
to trading.
I recognize that isolation has become a problem, and I keep on trying to find different solutions. I think
that eventually I might like to have one or two traders sharing my office again.
==== Since you're primarily a trader of stock index futures, I'm curious about what your experiences were
during the incredible crash of October 1987. ====
Ironically, I stopped trading about a month before the crash. I had a phenomenal year up to that point,
making more than half a million dollars, which was nearly twice as much as I had made the year before. I
couldn't believe how well I was doing. I had caught all the major market swings. I had a feeling that I had
just been too hot and shouldn't press my luck anymore. At the same time, I had the opportunity to
apprentice with a horse trainer whom I had been working with. I decided that it would be a good time to take
a trading hiatus.
==== So you weren't involved in the market at the time of the October 1987 crash? ====
Not exactly. I had no positions at the start of that week. However, during the period in which I had
stopped trading, I called my husband (he's a market maker on the Philadelphia Stock Exchange) each
morning to find out what was happening in the markets. When I called him from the stables that morning, he
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said, "You'd better get home and watch this day! All the world markets have crashed, and it looks like
the Dow Jones is going to open 200 points lower!" When I heard that, I thought to myself, "Boy, this is great.
This is the buying opportunity I've been waiting for." I rushed home and turned on the news. Everyone was
talking panic,
panic, panic. Silly old contrarian me is thinking, "This is terrific. Let's see how low we can open the
market." As you recall, the market kept plummeting all through the day. I had to force myself to hold back
from buying. Finally, in the early afternoon, I couldn't wait any longer. I bought one S&P futures contract. In
the final hour of trading, I kept on buying, as the market moved lower. By the end of the day, I was long ten
contracts.
==== When the market closed, were you down for the day? ====
Oh sure. The market closed near its lows. I was down about a $100,000.
==== Did that bother you? ====
No, not really. Of course, I was a little annoyed with myself for not being more patient, because I could
have gotten a better average price if I had waited. However, I really wasn't concerned about the initial loss
on the position. The futures market was at such a large discount relative to the cash stock index that I was
sure it would open higher the next day, which it did.
==== Did you get out on the higher opening? ====
I took profits on only part of the position. My plan was to stay long. I thought that we had seen such a
level of stupidity in the market, with people virtually throwing away stocks that had value, that I felt it just
had to be a selling exhaustion point. As one example, I remember when I first went down to the floor of the
Philadelphia Stock Exchange, Salomon Brothers stock was trading at $32. It eventually ran up to over $60.
Here it was on the day of the crash down to $22. To me, it seemed ridiculous that people were pricing stocks
that way.
==== You make it sound like you completely shrugged off the panic that engulfed the markets that week.
====
I don't think I underestimated the risk of the trade when I bought ten S&P futures on the day of the crash.
However, in retrospect, I certainly was naive in having faith that the markets, clearing firms, and banks
would continue to function. The subsequent realization that if the Fed had been less aggressive, my clearing
firm, along with many others, could have gone bankrupt, obliterating my account equity in the process, really
shook me up.
==== Does it ever bother you when you lose? ====
Not at all. It never bothered me to lose, because 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.
==== Could you describe the mistakes you've made in your trading career that served as learning
experiences? ====
My own particular weakness has always been being a bit premature on entering positions. As the saying
goes, "The pioneers are the ones with the arrows in their backs." I've learned to think to myself, "Patience,
patience, patience." I try to wait until things set up just right before I take a trade. Then, when I'm ready to
take the trade, I slowly count to ten before I pick up the phone. It's better to have the wrong idea and good
timing than the right idea and bad timing.
Another mistake I've frequently made is participating in too many markets at one time, which leads to
sloppy trading. I've also found that it's my smallest positions that cause my biggest losses, because they
tend to be neglected. It's natural to be cautious and attentive to big positions. With the small positions, it's
easy to fall into the trap of being complacent. My awareness of this pitfall has made me more careful with
such positions.
I realize that I'm only human, and that I'll always make mistakes. I just try to make them less frequently,
recognize them faster, and correct them immediately!
==== What percentage of your trades are profitable? ====
About 70 percent.
==== Is your average winner also larger than your average loser? ====
On my short-term trades, on a per contract basis, my average win is about $450 (the figure would be
higher if I included longer-term trades), and my average loss is just over $200.
==== With both the percentage and average magnitude of your winning trades outdistancing the losers by
a better than two-to-one ratio, it sounds like you would be profitable in every month. ====
Every month! My philosophy is to try to be profitable every day! Of course, I don't quite achieve that
consistency, but that's my goal. I'm probably profitable nearly every week. Remember, I do this for a living,
and I use my own money. I really value the fact that I've learned to trade as a craft. Like any craft, such as
piano playing, perfection may be elusive-I'll never play a piece perfectly, and I'll never buy the low and sell
the high-but consistency is achievable if you practice day in and day out.
==== I assume that, in part, your consistency can be attributed to the intensity with which you follow the
markets. When you described your trading earlier, it sounded like you virtually followed a market tick by
tick* I assume this type of approach must limit the number of markets you can trade. How many markets do
you follow at one time? ====
It varies. I analyze twenty markets. But at any given time, I trade no more than about six markets.
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Ideally, I would like to trade every market, every day, but I know that's physically impossible.
==== Couldn't you train assistants to apply your methodologies to the markets you can`t watch? ====
I've tried that. I hired and trained someone for a year. He was the nicest person you could hope to meet.
Any organization would have been proud to have him as an employee. He was extremely hardworking and
loyal. He was in perfect physical shape-he ate well and practiced karate every day. Emotionally, he was on
such an even keel that I never once saw him get angry at anyone. I put a lot of time and effort into training
him. I even gave him his
own account, because I thought that the only way he could learn to trade was by doing it. Unfortunately,
it didn't work out.
==== What went wrong? ====
He didn't seem to have any passion for trading. He couldn't pull the trigger. I think he didn't like the idea
of taking risks. [Linda describes a typical conversation with her assistant:]
"OK, Steve, what's your game plan for today?"
"I think I'm going to buy wheat today," he says, explaining his reasons for the trade.
'That's great!" I say, trying to encourage him.
At the end of the day, I ask him, "Did you buy the wheat?"
"No," he answers.
"Well, what did you do?"
"I watched it go up."
[She laughs wholeheartedly at the recollection.]
==== Why do you believe you have excelled as a trader? ====
I believe my most important skill is an ability to perceive patterns in the market. I think this aptitude for
pattern recognition is probably related to my heavy involvement with music. Between the ages of five and
twenty-one, I practiced piano for several hours every single day. In college, I had a dual major of economics
and musical composition. Musical scores are just symbols and patterns. Sitting there for hours every day,
analyzing scores, probably helped that part of my brain related to pattern recognition. Also, practicing an
instrument for several hours every day helps develop discipline and concentration-two skills that are very
useful as a trader.
==== Could you elaborate some more on the parallels between music and the markets? ====
A musical piece has a definite structure: there are repeating patterns with variations. Analogously, the
markets have patterns, which repeat with variations. Musical pieces have quiet interludes, theme development,
and a gradual crescendo to a climax. The market counterparts are
price consolidations, major trends, and runaway price moves to major tops or bottoms. You must have
patience as a musical piece unfolds and patience until a trade sets up. You can practice, practice, practice,
but you're never going to play a musical piece perfectly, just as you're never going to buy the low and sell
the high on a trade. All you can hope to do is to play a piece (or trade) better than before. In both music and
trading, you do best when you're relaxed, and in both you have to go with the flow.
A fmal analogy may explain the type of trading I've gravitated toward. You must be able to read individual
notes and learn a piece of music measure by measure before you can play the whole piece through. Perhaps
that's why I spend most of my energy on short-term trades rather than analyzing the long-term picture.
==== There are so few full-time women traders. Do you believe there are any obstacles to women trying to
get into the field? ====
I have sometimes felt that I had to work twice as hard to gain respect or to be taken seriously. But, quite
honestly, that perception was probably based on my own beliefs rather than grounded in reality. In
retrospect, I don't think that being a woman has ever really hindered me. In fact, if anything, it sometimes
seemed that people made an extra effort to be helpful to me, perhaps because there are so few women
traders.
Of course, there may be pockets in the industry in which women do encounter barriers-for example, the
large New York institutional firms and banks. I have known women who felt that sexism interfered with their
ability to land a job on a trading desk. But, again, I have never personally encountered such difficulties.
I would strongly encourage women who have the confidence to become traders to make the effort. There
is no reason for women to feel any fears of intimidation. Trading, more than any other field, is a bottom-line
business. People look at your performance numbers. They don't care if you're a man or a woman. If you
perform well, you'll get financial backing. Conversely, if you're incompetent as a trader, just being a man is
certainly not going to help.
Women may also have intrinsic advantages over men as traders. For example, women are less likely to
use trading as an ego trip. They aren't prone to making the macho-type trades [putting on a large position
with the intent of feeling a sense of power in moving the market], which I have seen lead to the
financial ruin of a number of male traders. Even the largest women traders I know tend to be very low-key,
almost reserved, as traders.
==== Are there any other differences between women and men as traders? ====
Women may be more intuitive. I certainly feel that I can see patterns that other people can't, but I don't
know if that's because I'm a female. 1 think it's often more acceptable for a woman to rely on intuition than it
is for a man to do so, and intuition certainly comes into play in trading. For example, when I'm watching the
price quotes, I never say something like, "Oh, the market is down exactly 62 percent, I have to buy right
here." Rather, I might think, "Gee, it looks like we've corrected enough and the price has stopped going
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down, so I'd better buy."
==== In our initial phone conversation, you mentioned that you've shared your trading methods with other
traders. Aren't you concerned that revealing your approach could destroy its effectiveness as other people
start to use it? ====
I truly feel that I could give away all my secrets and it wouldn't make any difference. Most people can't
control their emotions or follow a system. Also, most traders wouldn't follow my system, even if I gave them
step-by-step instructions, because my approach wouldn't feel right to them. They wouldn't have the same
confidence or comfort in the trading method as I do. But for argument's sake, let's say that showing my
methods to other traders did eventually cause some of the patterns that I follow to change. If these patterns
changed, new ones would be created, and I'm confident that I would find them.
==== What advice would you give novice traders? ====
Understand that learning the markets can take years. Immerse yourself in the world of trading and give
up everything else. Get as close to other successful traders as you can. Consider working for one for free.
Start by finding a niche and specializing. Pick one market or pattern
and leam it inside out before expanding your focus. My favorite exercise for novice traders is pick one
market only. Without looking at an intraday chart, jot down the price every five minutes from the opening to
the close. Do this for an entire week. Be in tune to the patterns. Where are the support and resistance levels?
How does price act when it hits these levels? What happens during the last half-hour? How long does each
intraday price move last? You won't believe how much you can leam from this exercise.
Never fear the markets. Never fear making a mistake. If you do make a mistake, don't complicate the
position by trying to hedge it- just get out.
Stay actively involved with the market. Don't just sit passively in front of a monitor, or simply stare at
charts. Notice how many old-timers who have been successful for years still construct their own point-andfigure
charts by hand intraday. They keep the same routine day after day. Develop your own routine for
taking periodic market readings.
Never be greedy. It's OK to leave money on the table. If you can't get in at a favorable price, let the trade
go and start looking for the next trade.
Finally, remember that a trader is someone who does his own work, has his own game plan, and makes
his own decisions. Only by acting and thinking independently can a trader hope to know when a trade isn't
working out. If you ever find yourself tempted to seek out someone else's opinion on a trade, mat's usually a
sure sign that you should get out of your position.
==== What are your goals? ====
There's no better satisfaction than playing a piece well, whether the instrument is a piano or the markets.
I measure my progress not in dollars but in my skill in predicting market patterns-that is, in how close I can
come to pinpointing my entries and exits to the market turns. I believe that I can go into any market with
just a quote machine and out-trade 98 percent of the other traders. Over the next ten years, I would like to
significantly step up my trading size. I really believe that I can become one of the best traders around.
Certainly one of the primary common characteristics I have found among the great traders is an almost
compelling sense of confidence in their ability to succeed. Linda Raschke personifies this type of confidence as
well as any trader I have interviewed. There is not the slightest doubt in my mind that she could start over in
any market with minimal funds and excel. She truly believes that she will become one of the best traders
ever, and I for one certainly wouldn't take the other side of that bet.
Are traders like Raschke confident because they succeed, or do they succeed because they are confident?
Probably a little bit of both. However, the key point is that exuberant confidence appears to be one of the
essential elements in exceptional achievement as a trader, and I assume in many other endeavors as well.
Occasionally, an interview provokes me to reassess my view of reality. I have long assumed that markets
might be predictable over the long term but that short-term price movements are largely random. Raschke
holds exactly the opposite point of view. She believes that in the markets, much as in weather forecasting,
short-term predictions can be quite accurate but long-term forecasting is a virtual impossibility. With her
ability to see patterns that others don't, she has been able to trade short-term price swings with a
consistency that would defy die laws of probability, if indeed there were no patterns in these movements.
Raschke has made me a believer. Clearly, there are predictable movements in price even over periods as
short as a few days or a single day.
Raschke reminds us that traders are people who do their own work, make their own decisions. One
particularly insightful observation made by Raschke is that the temptation to seek out other peoples' opinions
on a trade is a sure sign that the trade should be liquidated.
Among the characteristics that Linda Bradford Raschke cites as essential to being a good trader are a
passion for trading, self-reliance in developing trading ideas and making trading decisions, the willingness to
take risk, the ability to correct mistakes immediately (because they are inevitable), and patience, patience,
patience.Linda Bradford Raschke: Reading the Music of the Markets
Linda Bradford Raschke is so serious about trading that she traded right through the last day of her
pregnancy. "You didn't trade while you were in labor?" I asked her half-jokingly. "Well, no," she said, "but
then again, it was four A.M. and the markets weren't open. I did, however, put on a trade about three hours
after I gave birth to my daughter. I was short some currency contracts that were expiring that day. It
seemed like such a good trade that I couldn't bring myself to give up the opportunity of rolling the position
over into the next contract month." As I said, Linda Raschke is very serious about her trading. Raschke knew
that she wanted to be involved in the markets from an early age. When she was unable to land a job as a
stockbroker after graduating from college, she got into the routine of hanging out on the floor of the Pacific
Coast Stock Exchange every morning before work. Although the driving motivation for her daily visits to the
exchange floor was her fascination with the markets, this routine eventually led to an opportunity to become
a trader. One of the exchange locals befriended Raschke and taught her the basics of options. Impressed by
Raschke's enthusiasm and quick ability to grasp market concepts, he provided her with a trading stake.
Raschke spent six years as a floor trader, initially at the Pacific Coast Stock Exchange and then at the
Philadelphia Stock Exchange.
With the exception of one catastrophic event early in her trading career, Raschke made money steadily as
a floor trader.
In late 1986, when injuries suffered in an accident forced Raschke to trade from an office, she discovered
that she much preferred off-the-floor trading. Thereafter, she set up her trading office at home. Although
many floor traders who try to make the transition to office trading encounter major difficulties in the first
year of the changeover, Raschke's first year off the floor was actually her best ever. She continued to be a
consistently profitable trader in subsequent years.
When I first met Linda Raschke, I was impressed by her ebullient demeanor. I was shocked when she told
me that she was suffering from Epstein-Barr Syndrome-a malady whose hallmark symptom is chronic loss of
energy. "What you don't know," she said, "is that I have spent the better part of the past four days resting to
build up enough energy to make this trip." (Although I had offered to travel to her home to do the interview,
Raschke wanted an excuse to make a day trip to New York.) Even so, I could hardly imagine what she must
be Uke when she is fully healthy.
Raschke believes that she contracted her ailment because she had just pushed herself too farsimultaneously
trading full-time, taking care of an infant, dealing with hordes of workers as her home was
being remodeled, and actively pursuing her hobby of training and riding horses. Raschke even manages to be
upbeat about her illness. "I feel a tremendous amount of good has come out of this," she explains. "Instead
of trying to cram in everything before I turn thirty-five, I now realize that at thirty-three I'm still really young
and that I have many years of great opportunities ahead of me."
The first few hours of the interview were conducted at my office. We then continued our conversation at a
local Wall Street area restaurant. I kept eyeing my watch and hastening our conversation along throughout
dinner, because I was aware that missing her next scheduled bus home would mean a four-hour wait.
Although Raschke seemed relaxed and unconcerned, I didn't want to be responsible for her being stranded at
Port Authority Bus Terminal for that length of time. There are far better places to spend four hours (a Turkish
prison, to name only one).
==== When did you first get involved with the markets? ====
My father loved to trade the markets, although he never made any money at it. Being the oldest of four
children, I was enlisted to help him leaf through hundreds of stock charts, looking for some specific types of
patterns. My first real involvement in the markets came when I attended Occidental College. The school had a
program wherein ten students were selected each year to manage a trust set up by an anonymous donor.
==== What did you know about the markets at that time? ====
Not much. We made decisions based almost strictly on fundamentals. Anyone m the group could come up
with an idea, and it would be implemented if approved by the majority.
==== What did you leam from that experience? ====
I just learned that it was an awful lot of fun.
==== Did you get a market-related job after finishing college? ====
After graduating college, I went up to San Francisco to try to find a job as a stockbroker. I must have
applied to every brokerage firm in the city, and I was turned down by all of them. They didn't take me seriously.
To them, I was just a young kid who had graduated college. I was repeatedly told to come back in four
or five years. I finally ended up taking a job as a financial analyst with Crown Zeilerbach, a paper company.
As fate would have it, my office was only two blocks away from the Pacific Coast Stock Exchange. Since I
didn't have to be at work until 8:30 and the exchange opened at 7:30,1 started spending the first hour of my
day at the exchange.
==== What did you do there? ====
I just watched what was going on. After a while, people noticed I was there, and some of them went out
of their way to explain things. One trader explained the pricing of options to me, and I thought, "Gee, I can
do that." It didn't sound like such a big deal. The truth is that once you get down on the trading floor, you
find that the traders come from all walks of life. You don't have to be a rocket scientist to be a trader. In fact,
some of the best traders whom I knew down on the floor were surf bums. Formal education didn't really
seem to have much to do with a person's skill as a trader.
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==== How did your transition from observer to participant come about? ====
The person who had explained the basics of the options market to me thought that I would make a good
trader and offered to back me. At the time, I was applying to graduate schools to get an M.B.A. I thought to
myself, "I can either go to business school to get my M.B.A., or I can trade on the floor of the stock
exchange-hmm, which do I want to do?" It wasn't a hard decision.
==== On what basis was he willing to back you as a trader? ====
What has impressed me about other people whom I have ended up training or backing is their level of
interest. If someone has a strong enough interest or desire, it usually overcomes other obstacles. I think he
was impressed with my interest in the markets.
==== How big a stake did he give you? ====
As was standard procedure for traders backing other traders, we set up a partnership, in which I was the
general partner and he was the limited partner. He put up $25,000, with the agreement calling for a 50/50
split of the profits.
==== How were you making your trading decisions? ====
I would just buy options that were underpriced or sell options that were overpriced and hedge the
positions with other options or stock.
==== Wasn't it difficult for you as a novice to be competing with more experienced brokers trying to do the
same lypes of trades? ====
No, the options market was just incredibly inefficient in the early 1980s. You didn't really need an IQ over
100 to make money. After my first three months, I had made about $25,000.
Around that time, I got involved in selling calls on Cities Service, because the options were overpriced.
And why were they overpriced? Because the stock was a takeover candidate.
==== Did you know that at the time? ====
Oh sure.
==== But did you know how to factor that situation into the price? ====
I thought that I did. At the time, the stock was trading at $32. At the prices at which I was able to sell the
options, I knew I would be okay as long as the stock price didn't go above $55. Unfortunately, the takeover
was announced the afternoon before the options expired, and the stock jumped from about $34 to $65.
Suddenly, I discovered that you could lose $80,000 overnight.
==== So overnight you lost all your profits and your initial stake, and you were still in the hole for $30,000.
Who was responsible to make up that deficit? ====
I was, since I was the general partner.
==== Do you remember your emotional response at the time? ====
It wasn't so bad emotionally, because I had seen other traders around me lose much greater amounts in
sudden takeover situations. They were able to survive after taking hits of several million dollars. In comparison,
my situation didn't seem that extreme. Also, I felt that in any business where you could lose money
that quickly, you had to be able to make it back.
It almost sounds as if you were able to shrug it off.
I don't want to make light of this experience, because it was intimidating being faced with a mountain of
debt at the age of twenty-two. In fact, I still had $10,000 in debt left over from college student loans.
Fortunately, 1 was able to find another backer, and everything worked out. Overcoming that experience gave
me the confidence that I could overcome anything that might happen in the future.
==== How did you do after that point? ====
I made money steadily.
==== What made you decide to abandon floor trading for trading from an office? ====
In late 1986, I had a bad horse riding accident. I fractured my ribs, punctured my lung, and dislocated my
shoulder. I found it physically very uncomfortable to stand on the floor. That was the first rime I started
sitting upstairs and trading off a quote machine. I thought it was great! There were all these indicators and
different markets I could watch at the same time. Over time, I evolved my own trading style in the S&P
futures.
==== What is your trading style? ====
My niche is short-term trading, which is how I make my bread and butter. The occasional long-term trades
are frosting on the cake. I believe that only short-term price swings can be predicted with any precision. The
accuracy of a prediction drops off dramatically, the more distant the forecast time. I'm a strong believer in
chaos theory.
[A basic concept of chaos theory is that for aperiodic systems-i.e., systems that never exactly repeat
themselves and hence never find a steady state, such as weather or the markets-slight differences in variable
values or measurements can be magnified to have huge effects over increasing., periods of time. The
technical name for this phenomenon-sensitive dependence on initial conditions-has become better known as
the Butterfly Effect. As James Gleick described it in his excellent book, Chaos: Making a New Science, "In
weather, for example, this translates into what is only half-jokingly known as the Butterfly Effect-the notion
that a butterfly stirring the air today in Peking can transform storm systems next month in New York."] There
are too many unpredictable things that can happen within two months. To me, the ideal trade lasts ten days,
but I approach every trade as if I'm only going to hold it two or three days.
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I'm also a firm believer in predicting price direction, but not magnitude. I don't set price targets.
I get out when the market action tells me it's time to get out, rather than based on any consideration of how
far the price has gone. You have to be willing to take what the market gives you. If it doesn't give you very
much, you can't hesitate to get out with a small profit.
I put a great deal of effort into getting the best entry price possible. 1 feel this is probably one of my
strongest skills. In day trading, a good entry price is critical because it buys you time to see how the market
will react. If you buy because you think the market should bounce, but it only goes sideways, you'd better
get out. Part of the trading process is a matter of testing the water. If your entry timing is good enough, you
won't lose much even when you're wrong.
Some of the best trades come when everyone gets very panicky. The crowd can often act very stupidly in
the markets. You can picture price fluctuations around an equilibrium level as a rubber band being stretchedif
it gets pulled too far, eventually it will snap back. As a short-term trader, I try to wait until the rubber band
is stretched to its extreme point.
==== How do you determine when the market is near such an extreme? ====
One of my favorite patterns is the tendency for the markets to move from relative lows to relative highs
and vice versa every two to four days. This pattern is a function of human behavior. It takes several days of
a market rallying before it looks really good. That's when everyone wants to buy it, and that's the time when
the professionals, like myself, are selling. Conversely, when the market has been down for a few days, and
everyone is bearish, that's the time I like to be buying.
I also track different indicators. I don't think the specific choice of indicators is that critical, as long as you
have a good feel for interpreting the indicators that you use. Personally, I pay close attention to the tick [the
difference between the number of issues whose most recent tick was up and those whose most recent tick
was down], TRIN [a measure that relates the price and volume of advancing issues to the corresponding
figures for declining issues], and premium [the premium, or discount, of stock index futures to the
theoretically equivalent cash index price]. For example, if the tick is at an extreme level and falling- -480, -
485, -490, -495-and then just pauses--495, -495, -495- and the other indicators I watch are also oversold,
I'll often go in and buy at the market. Sometimes, I've actually bought the low tick of the day using this
method.
I really have no fear of buying into breaks or selling into rallies. Sure, once in a while the market will keep
on going, and I'll immediately be down a full point or more on the S&P. However, by waiting for a sufficient
extreme, even in such situations, the market will often snap back enough to let me out near even. Perhaps
my number one rule is: Don't try to make a profit on a bad trade, just try to find the best place to get out.
==== So when you have a bad trade, you don't dump it immediately. ====
That's right. I find that I can usually get out at a better price if I have a little patience, since the reason I
got into the trade in the first place was because the market was so overdone that a reaction seemed overdue.
Once I'm out, it's easy for me to get back in. If I buy back at a higher price, I just look at it as a fresh trade.
==== When did you set up your home trading office? ====
About three months after leaving the floor.
==== After spending years surrounded by people on the floor,, did you find it difficult to adjust to the
isolation of trading from home? ====
For the first four years, being off the floor was great-no distractions, no outside opinions. Last year,
however, the isolation started to really bother me. I got lonely. I tried talking to other traders on the phone
during. the day, but I found that it was distracting and lowered my productivity. I also tried establishing a
trading office with another trader, which worked great for a while until he left to establish a trading operation
in New York. And I tried hiring an assistant, but it didn't add to my bottom line. Now I try to deal with the
isolation by scheduling projects outside
of the trading day in order to keep me involved with the outside world. F m a member of the Market
Technicians Association and I try to attend every meeting. I have also worked with a programmer to develop
neural network trading indicators, which I'm now using as a market tool. [A key characteristic of neural
network programs is that they are not static; rather, they evolve as they "leam" from the data.] This project
has also led to lots of calls to other people across the country who are working on applying neural networks
to trading.
I recognize that isolation has become a problem, and I keep on trying to find different solutions. I think
that eventually I might like to have one or two traders sharing my office again.
==== Since you're primarily a trader of stock index futures, I'm curious about what your experiences were
during the incredible crash of October 1987. ====
Ironically, I stopped trading about a month before the crash. I had a phenomenal year up to that point,
making more than half a million dollars, which was nearly twice as much as I had made the year before. I
couldn't believe how well I was doing. I had caught all the major market swings. I had a feeling that I had
just been too hot and shouldn't press my luck anymore. At the same time, I had the opportunity to
apprentice with a horse trainer whom I had been working with. I decided that it would be a good time to take
a trading hiatus.
==== So you weren't involved in the market at the time of the October 1987 crash? ====
Not exactly. I had no positions at the start of that week. However, during the period in which I had
stopped trading, I called my husband (he's a market maker on the Philadelphia Stock Exchange) each
morning to find out what was happening in the markets. When I called him from the stables that morning, he
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said, "You'd better get home and watch this day! All the world markets have crashed, and it looks like
the Dow Jones is going to open 200 points lower!" When I heard that, I thought to myself, "Boy, this is great.
This is the buying opportunity I've been waiting for." I rushed home and turned on the news. Everyone was
talking panic,
panic, panic. Silly old contrarian me is thinking, "This is terrific. Let's see how low we can open the
market." As you recall, the market kept plummeting all through the day. I had to force myself to hold back
from buying. Finally, in the early afternoon, I couldn't wait any longer. I bought one S&P futures contract. In
the final hour of trading, I kept on buying, as the market moved lower. By the end of the day, I was long ten
contracts.
==== When the market closed, were you down for the day? ====
Oh sure. The market closed near its lows. I was down about a $100,000.
==== Did that bother you? ====
No, not really. Of course, I was a little annoyed with myself for not being more patient, because I could
have gotten a better average price if I had waited. However, I really wasn't concerned about the initial loss
on the position. The futures market was at such a large discount relative to the cash stock index that I was
sure it would open higher the next day, which it did.
==== Did you get out on the higher opening? ====
I took profits on only part of the position. My plan was to stay long. I thought that we had seen such a
level of stupidity in the market, with people virtually throwing away stocks that had value, that I felt it just
had to be a selling exhaustion point. As one example, I remember when I first went down to the floor of the
Philadelphia Stock Exchange, Salomon Brothers stock was trading at $32. It eventually ran up to over $60.
Here it was on the day of the crash down to $22. To me, it seemed ridiculous that people were pricing stocks
that way.
==== You make it sound like you completely shrugged off the panic that engulfed the markets that week.
====
I don't think I underestimated the risk of the trade when I bought ten S&P futures on the day of the crash.
However, in retrospect, I certainly was naive in having faith that the markets, clearing firms, and banks
would continue to function. The subsequent realization that if the Fed had been less aggressive, my clearing
firm, along with many others, could have gone bankrupt, obliterating my account equity in the process, really
shook me up.
==== Does it ever bother you when you lose? ====
Not at all. It never bothered me to lose, because 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.
==== Could you describe the mistakes you've made in your trading career that served as learning
experiences? ====
My own particular weakness has always been being a bit premature on entering positions. As the saying
goes, "The pioneers are the ones with the arrows in their backs." I've learned to think to myself, "Patience,
patience, patience." I try to wait until things set up just right before I take a trade. Then, when I'm ready to
take the trade, I slowly count to ten before I pick up the phone. It's better to have the wrong idea and good
timing than the right idea and bad timing.
Another mistake I've frequently made is participating in too many markets at one time, which leads to
sloppy trading. I've also found that it's my smallest positions that cause my biggest losses, because they
tend to be neglected. It's natural to be cautious and attentive to big positions. With the small positions, it's
easy to fall into the trap of being complacent. My awareness of this pitfall has made me more careful with
such positions.
I realize that I'm only human, and that I'll always make mistakes. I just try to make them less frequently,
recognize them faster, and correct them immediately!
==== What percentage of your trades are profitable? ====
About 70 percent.
==== Is your average winner also larger than your average loser? ====
On my short-term trades, on a per contract basis, my average win is about $450 (the figure would be
higher if I included longer-term trades), and my average loss is just over $200.
==== With both the percentage and average magnitude of your winning trades outdistancing the losers by
a better than two-to-one ratio, it sounds like you would be profitable in every month. ====
Every month! My philosophy is to try to be profitable every day! Of course, I don't quite achieve that
consistency, but that's my goal. I'm probably profitable nearly every week. Remember, I do this for a living,
and I use my own money. I really value the fact that I've learned to trade as a craft. Like any craft, such as
piano playing, perfection may be elusive-I'll never play a piece perfectly, and I'll never buy the low and sell
the high-but consistency is achievable if you practice day in and day out.
==== I assume that, in part, your consistency can be attributed to the intensity with which you follow the
markets. When you described your trading earlier, it sounded like you virtually followed a market tick by
tick* I assume this type of approach must limit the number of markets you can trade. How many markets do
you follow at one time? ====
It varies. I analyze twenty markets. But at any given time, I trade no more than about six markets.
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Ideally, I would like to trade every market, every day, but I know that's physically impossible.
==== Couldn't you train assistants to apply your methodologies to the markets you can`t watch? ====
I've tried that. I hired and trained someone for a year. He was the nicest person you could hope to meet.
Any organization would have been proud to have him as an employee. He was extremely hardworking and
loyal. He was in perfect physical shape-he ate well and practiced karate every day. Emotionally, he was on
such an even keel that I never once saw him get angry at anyone. I put a lot of time and effort into training
him. I even gave him his
own account, because I thought that the only way he could learn to trade was by doing it. Unfortunately,
it didn't work out.
==== What went wrong? ====
He didn't seem to have any passion for trading. He couldn't pull the trigger. I think he didn't like the idea
of taking risks. [Linda describes a typical conversation with her assistant:]
"OK, Steve, what's your game plan for today?"
"I think I'm going to buy wheat today," he says, explaining his reasons for the trade.
'That's great!" I say, trying to encourage him.
At the end of the day, I ask him, "Did you buy the wheat?"
"No," he answers.
"Well, what did you do?"
"I watched it go up."
[She laughs wholeheartedly at the recollection.]
==== Why do you believe you have excelled as a trader? ====
I believe my most important skill is an ability to perceive patterns in the market. I think this aptitude for
pattern recognition is probably related to my heavy involvement with music. Between the ages of five and
twenty-one, I practiced piano for several hours every single day. In college, I had a dual major of economics
and musical composition. Musical scores are just symbols and patterns. Sitting there for hours every day,
analyzing scores, probably helped that part of my brain related to pattern recognition. Also, practicing an
instrument for several hours every day helps develop discipline and concentration-two skills that are very
useful as a trader.
==== Could you elaborate some more on the parallels between music and the markets? ====
A musical piece has a definite structure: there are repeating patterns with variations. Analogously, the
markets have patterns, which repeat with variations. Musical pieces have quiet interludes, theme development,
and a gradual crescendo to a climax. The market counterparts are
price consolidations, major trends, and runaway price moves to major tops or bottoms. You must have
patience as a musical piece unfolds and patience until a trade sets up. You can practice, practice, practice,
but you're never going to play a musical piece perfectly, just as you're never going to buy the low and sell
the high on a trade. All you can hope to do is to play a piece (or trade) better than before. In both music and
trading, you do best when you're relaxed, and in both you have to go with the flow.
A fmal analogy may explain the type of trading I've gravitated toward. You must be able to read individual
notes and learn a piece of music measure by measure before you can play the whole piece through. Perhaps
that's why I spend most of my energy on short-term trades rather than analyzing the long-term picture.
==== There are so few full-time women traders. Do you believe there are any obstacles to women trying to
get into the field? ====
I have sometimes felt that I had to work twice as hard to gain respect or to be taken seriously. But, quite
honestly, that perception was probably based on my own beliefs rather than grounded in reality. In
retrospect, I don't think that being a woman has ever really hindered me. In fact, if anything, it sometimes
seemed that people made an extra effort to be helpful to me, perhaps because there are so few women
traders.
Of course, there may be pockets in the industry in which women do encounter barriers-for example, the
large New York institutional firms and banks. I have known women who felt that sexism interfered with their
ability to land a job on a trading desk. But, again, I have never personally encountered such difficulties.
I would strongly encourage women who have the confidence to become traders to make the effort. There
is no reason for women to feel any fears of intimidation. Trading, more than any other field, is a bottom-line
business. People look at your performance numbers. They don't care if you're a man or a woman. If you
perform well, you'll get financial backing. Conversely, if you're incompetent as a trader, just being a man is
certainly not going to help.
Women may also have intrinsic advantages over men as traders. For example, women are less likely to
use trading as an ego trip. They aren't prone to making the macho-type trades [putting on a large position
with the intent of feeling a sense of power in moving the market], which I have seen lead to the
financial ruin of a number of male traders. Even the largest women traders I know tend to be very low-key,
almost reserved, as traders.
==== Are there any other differences between women and men as traders? ====
Women may be more intuitive. I certainly feel that I can see patterns that other people can't, but I don't
know if that's because I'm a female. 1 think it's often more acceptable for a woman to rely on intuition than it
is for a man to do so, and intuition certainly comes into play in trading. For example, when I'm watching the
price quotes, I never say something like, "Oh, the market is down exactly 62 percent, I have to buy right
here." Rather, I might think, "Gee, it looks like we've corrected enough and the price has stopped going
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down, so I'd better buy."
==== In our initial phone conversation, you mentioned that you've shared your trading methods with other
traders. Aren't you concerned that revealing your approach could destroy its effectiveness as other people
start to use it? ====
I truly feel that I could give away all my secrets and it wouldn't make any difference. Most people can't
control their emotions or follow a system. Also, most traders wouldn't follow my system, even if I gave them
step-by-step instructions, because my approach wouldn't feel right to them. They wouldn't have the same
confidence or comfort in the trading method as I do. But for argument's sake, let's say that showing my
methods to other traders did eventually cause some of the patterns that I follow to change. If these patterns
changed, new ones would be created, and I'm confident that I would find them.
==== What advice would you give novice traders? ====
Understand that learning the markets can take years. Immerse yourself in the world of trading and give
up everything else. Get as close to other successful traders as you can. Consider working for one for free.
Start by finding a niche and specializing. Pick one market or pattern
and leam it inside out before expanding your focus. My favorite exercise for novice traders is pick one
market only. Without looking at an intraday chart, jot down the price every five minutes from the opening to
the close. Do this for an entire week. Be in tune to the patterns. Where are the support and resistance levels?
How does price act when it hits these levels? What happens during the last half-hour? How long does each
intraday price move last? You won't believe how much you can leam from this exercise.
Never fear the markets. Never fear making a mistake. If you do make a mistake, don't complicate the
position by trying to hedge it- just get out.
Stay actively involved with the market. Don't just sit passively in front of a monitor, or simply stare at
charts. Notice how many old-timers who have been successful for years still construct their own point-andfigure
charts by hand intraday. They keep the same routine day after day. Develop your own routine for
taking periodic market readings.
Never be greedy. It's OK to leave money on the table. If you can't get in at a favorable price, let the trade
go and start looking for the next trade.
Finally, remember that a trader is someone who does his own work, has his own game plan, and makes
his own decisions. Only by acting and thinking independently can a trader hope to know when a trade isn't
working out. If you ever find yourself tempted to seek out someone else's opinion on a trade, mat's usually a
sure sign that you should get out of your position.
==== What are your goals? ====
There's no better satisfaction than playing a piece well, whether the instrument is a piano or the markets.
I measure my progress not in dollars but in my skill in predicting market patterns-that is, in how close I can
come to pinpointing my entries and exits to the market turns. I believe that I can go into any market with
just a quote machine and out-trade 98 percent of the other traders. Over the next ten years, I would like to
significantly step up my trading size. I really believe that I can become one of the best traders around.
Certainly one of the primary common characteristics I have found among the great traders is an almost
compelling sense of confidence in their ability to succeed. Linda Raschke personifies this type of confidence as
well as any trader I have interviewed. There is not the slightest doubt in my mind that she could start over in
any market with minimal funds and excel. She truly believes that she will become one of the best traders
ever, and I for one certainly wouldn't take the other side of that bet.
Are traders like Raschke confident because they succeed, or do they succeed because they are confident?
Probably a little bit of both. However, the key point is that exuberant confidence appears to be one of the
essential elements in exceptional achievement as a trader, and I assume in many other endeavors as well.
Occasionally, an interview provokes me to reassess my view of reality. I have long assumed that markets
might be predictable over the long term but that short-term price movements are largely random. Raschke
holds exactly the opposite point of view. She believes that in the markets, much as in weather forecasting,
short-term predictions can be quite accurate but long-term forecasting is a virtual impossibility. With her
ability to see patterns that others don't, she has been able to trade short-term price swings with a
consistency that would defy die laws of probability, if indeed there were no patterns in these movements.
Raschke has made me a believer. Clearly, there are predictable movements in price even over periods as
short as a few days or a single day.
Raschke reminds us that traders are people who do their own work, make their own decisions. One
particularly insightful observation made by Raschke is that the temptation to seek out other peoples' opinions
on a trade is a sure sign that the trade should be liquidated.
Among the characteristics that Linda Bradford Raschke cites as essential to being a good trader are a
passion for trading, self-reliance in developing trading ideas and making trading decisions, the willingness to
take risk, the ability to correct mistakes immediately (because they are inevitable), and patience, patience,
patience.
hur går det dejv? följ handeln i assa nu, den är lärorik. ypperligt tillfälle att läsa tickern
ser du squiiiizen?
craaaaazy
100kr frågan är nu cdv's agerande. han har köpt drygt 600k i marknaden. han har succesivt lappad och har lappat ungefär ´520k. nu säljer han liite. är det traders som frontat sitt eget flöde? man vet ingen men så här får man sitta o gissa, dag ut o dag in
intresset för intradayhandel och tapereading är obefintligt
eller är det min person som är för motbjudande?
=)
troligtvis det senare :/ xD
Mvh H3NPHLO
RSOF
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vem är det som fått dig nyfiken på handla news o läsa tickern?
linda bradford raschke (?) vet jag har haft nån artikel om det på sin sida. sök även på amazon så får du nog några träffar på böcker. jag har själv inte läst nån bok i ämnet men skulle jag försöka kategorisera mig som trader tar iaf tickerläsning en stor del av min tid