The buying and selling guidelines of Linda Raschke’s “Market Wizard” appear easy, however for a number of many years they continue to be one of the crucial sensible.
🟡 Purchase the primary correction after a brand new excessive. Promote the primary bounce after a brand new low. Momentum normally continues earlier than reversing. See the buying and selling thought based mostly on one candle with impulses.
🟡 Power or weak spot within the second half of the day ought to proceed into the following day. The market hardly ever mimics late actions with out displaying them once more within the morning.
🟡 One of the best reversals occur within the morning. If you wish to catch clear reversals, give attention to the early hours.
🟡 The bigger the hole, the upper the prospect of continuation. Gaps are feelings and positioning — they hardly ever shut instantly.
🟡 Watch the worth response to the day prior to this’s extremes. These are key ranges for testing power or weak spot.
🟡 The excessive and low of yesterday are necessary ranges — worth both bounces off them or breaks by means of and continues the transfer.
🟡 The final hour tells the reality. Good cash exhibits its playing cards on the finish of the day. Constant robust closes verify the pattern.
🟡 Excessive quantity at closing means continuation within the morning. Quantity is conviction. It typically carries over to the following session.
🟡 The primary hour units the framework for the present day. The majority of the each day vary varieties early.
🟡 4 everlasting ideas of worth motion:
• Traits extra typically proceed than reverse;
• Momentum precedes worth;
• Traits finish in a climax;
• Markets alternate between enlargement and contraction.
🟡 Nobody is aware of the long run. A profitable dealer does not predict however reacts to market motion.
These guidelines are many years outdated, however they nonetheless match markets completely. As a result of markets change, however human conduct doesn’t. Linda Raschke’s guidelines present how necessary it’s to know market construction and worth conduct. And historical past proves: those that grasp this mindset typically obtain extraordinary outcomes. Just some iconic examples:
- Larry Williams — turned $10,000 into $1.1 million in a single yr by means of strict self-discipline and seasonal timing.
- James Simons — constructed a $25 billion fortune by decoding market patterns mathematically, not predictively.
- George Soros — made $1 billion in a single day by recognizing the climax of market sentiment — precisely the form of structural break Raschke warns to look at for.
- Takashi Kotehara — grew $13,000 into $153 million by driving tendencies with persistence and precision, by no means combating worth.
Making use of Raschke’s ideas manually is time-consuming and subjective — however the core thought stays unchanged: learn worth, respect construction, act with self-discipline. That’s the place actual edge lives.
