[The Stone from Other Mountains] Linda Bradford Raschke - The "Turtle Soup" and Discipline of the Master of Technical Analysis

#成长值抽奖赢金条和精美周边
"When big money players enter, the rules change. Traders do not need to understand all the information about the market, they just need to read the story that the price tells you."

In the legendary world of trading, Linda Bradford Raschke stands out. She is not only a top expert in short-term trading but also a theorist and educator in Technical Analysis. Instead of relying on large-scale insider information or complex quantitative models, she has created hundreds of millions of dollars in wealth for herself and her clients over a trading career spanning more than 45 years, thanks to her profound insights into price behavior and market rhythm, as well as her almost rigorous adherence to trading discipline. She has proven that pure charts, rules, and discipline are enough to achieve lasting success in the market.

Legendary Career: From Trading Floor to Industry Mentor

Shashke's trading journey began in a family immersed in market atmosphere. Her father was her mentor, and the lines and numbers on the charts have captivated her since she was young.

· Early Refinement (1980s): Her career began in the commodities trading pit of the Pacific Stock Exchange. In the noisy and intense trading hall, she personally experienced the surge of order flow and the momentary emotions of the market, which laid a solid foundation for her later understanding of key price levels and intraday rhythms.
· Founded LBR Group: With her outstanding trading capabilities, she established her own investment advisory firm, LBR Group. According to institutional data, her hedge fund ranked 17th among approximately 4,500 funds in five-year performance, which is strong evidence of the effectiveness of her trading system.
· "The Wizard" and Mentor: Her achievements have been included by Jack Schwager in the book "Market Wizards," alongside many trading legends. From then on, the title "Wall Street Witch" spread widely. She has condensed her wisdom in works such as "Street Smarts" and continues to share her methods through education and blogging, committed to nurturing a new generation of disciplined traders. Although she partially retired from some positions in 2015, she still insists on daily trading.

Core Trading Philosophy: Interpreting the "language" of the market

Pump Shke believes that the market has its own language and rhythm, and what traders need to do is not to predict, but to listen and follow.

· Focus on price action: She firmly believes that all important information—fundamentals, market sentiment, large capital movements—eventually gets reflected in the price charts. The trader's task is to identify the repeating, high-probability patterns in the charts, rather than trying to understand everything about the market.
· Rules over intuition: She is known for her extremely detailed planning and strict execution of rules. She has shared that she has been using the same set of money management procedures since 1992, and this decades-long discipline is the cornerstone of her continued success.
· The "musicality" of the market: Rashke cleverly connects her love for music with trading. She believes that recognizing patterns in market charts is akin to identifying rhythms and melodies in music, representing an artistic perception of structure and repetition.

Classic Strategies: From "Turtle Soup" to "Holy Grail"

Shask contributed several famous trading patterns and systems to the trading community, two of which are particularly well-known:

1. "Turtle Soup" Trading Method
This is the unique naming by Rashke for the "false breakout" reversal strategy. Its core logic is: when the price breaks through a key previous high (making a "turtle soup" long) or low (making a "turtle soup" short), but quickly fails and moves in the opposite direction, it is a high-probability reversal trading opportunity. This pattern teaches traders that what is important is not the breakout itself, but the market's confirmation of this breakout.

2. "Holy Grail" Trend Following System
This is a trading system designed to capture strong trends. It uses the 14-period ADX indicator (Average Directional Index) as a trend filter, only considering the market to be in a strong trend worth participating in when the ADX value is above 30. Under this premise, it further combines short-term indicators like the 2-period RSI to find specific entry points. This system perfectly embodies its philosophy: only taking action in market conditions with the highest probability of success.

In addition, she also summarized many valuable intraday observation rules:

· Closing Rule: The trend in the last half hour before the market closes often reveals the true intentions of "smart money". A strong closing price usually indicates that the market will continue to move in the same direction the next day.
· Gap Rule: A significant opening gap in the market often indicates that the trend of the day will continue.
· High and Low Point Rule: The high and low points of the previous trading day are the core pivot points for the day, and the price movement around them can tell you the strength of the bullish and bearish forces.

The Three Stones Revelation: The Modern Resonance of Rushk Wisdom

In today's market dominated by algorithms and high-frequency trading, the philosophy of Rushki based on rules and price behavior demonstrates greater adaptability and inspiration.

1. Establish your "Rule Manual": Rachk's success is by no means random. She summarizes her experience into clear, actionable rules. For modern traders, creating such a personalized "Trading Manual" is crucial. It is not only a collection of strategies but also an "operational constitution" to combat emotional fluctuations during trading and ensure behavioral consistency.
2. Understanding the "state" of the market: She teaches us that the applicable strategies vary in different time frames and states. This aligns with modern trading taxonomy—you need to be clear whether you are engaging in high-frequency "incremental" trading or waiting for high-odds "convexity" opportunities, and manage your positions and expectations accordingly. Using a "Holy Grail" system to filter trending markets is itself a top-level state identification.
3. Discipline is the ultimate advantage: The money management program that has been in use since 1992 is the best footnote to her legendary career. In an age of information overload, the discipline of execution is far more important than the amount of information. Setting clear stop-loss and take-profit points, controlling single trade risks, and strictly adhering to these rules are the thresholds that any successful trader must cross.
4. Focused rather than knowledgeable: "Traders do not need to understand all the information in the market." This statement is especially profound today. Instead of chasing every piece of news and interpretation, it is better to focus on one or two patterns or markets that you truly understand (like her favorite "turtle soup") and refine them to perfection.

Three Stone Conclusion

Linda Rashke has painted a clear blueprint with her career: market winners are often those who can simplify complex market fluctuations into a few repeatable, verifiable rules and execute them with ironclad will.

She is not as flamboyant as Livermore, nor does she hide behind algorithms like Simmons. Her approach is simple and transparent, and can even be learned by anyone with the will. However, as she said, "not everyone can replicate her success." The difference lies in the astonishing discipline to adhere to simple rules for decades.

Charts are the messages the market writes to traders, and discipline is the only ability that can read this message and respond correctly. In today's world of increasingly diverse Technical Analysis tools, the legacy of Rashke reminds us: the most powerful systems are often rooted in the purest respect for price itself and the most steadfast order within the trader's heart.

In tomorrow's series, we will turn to another modern trading thinker, exploring how he categorizes complex market behaviors and builds a highly practical strategy framework.