The buying and selling guidelines of Linda Raschke’s “Market Wizard” appear easy, however for a number of a long time they continue to be probably the most sensible.
🟡 Purchase the primary correction after a brand new excessive. Promote the primary bounce after a brand new low. Momentum often continues earlier than reversing. See the buying and selling concept based mostly on one candle with impulses.
🟡 Power or weak spot within the second half of the day ought to proceed into the subsequent day. The market not often mimics late actions with out exhibiting them once more within the morning.
🟡 The perfect 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 possibility of continuation. Gaps are feelings and positioning — they not often shut instantly.
🟡 Watch the worth response to the day before today’s extremes. These are key ranges for testing energy or weak spot.
🟡 The excessive and low of yesterday are vital ranges — value both bounces off them or breaks by and continues the transfer.
🟡 The final hour tells the reality. Sensible cash exhibits its playing cards on the finish of the day. Constant sturdy closes affirm the development.
🟡 Excessive quantity at closing means continuation within the morning. Quantity is conviction. It typically carries over to the subsequent session.
🟡 The primary hour units the framework for the present day. The majority of the day by day vary kinds early.
🟡 4 everlasting rules of value motion:
• Tendencies extra typically proceed than reverse;
• Momentum precedes value;
• Tendencies finish in a climax;
• Markets alternate between enlargement and contraction.
🟡 Nobody is aware of the long run. A profitable dealer would not predict however reacts to market motion.
These guidelines are a long time outdated, however they nonetheless match markets completely. As a result of markets change, however human habits doesn’t. Linda Raschke’s guidelines present how vital it’s to know market construction and value habits. 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 12 months by 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 type of structural break Raschke warns to observe for.
- Takashi Kotehara — grew $13,000 into $153 million by driving tendencies with persistence and precision, by no means combating value.
Making use of Raschke’s rules manually is time-consuming and subjective — however the core concept stays unchanged: learn value, respect construction, act with self-discipline. That’s the place actual edge lives.
