Linda Raschke Trading Strategies

The Holy Grail Trading Strategy & More

Linda Raschke​

Linda Raschke started trading in 1981 as a market maker in the options pit.

After that, she launched her own hedge fund in 2002 and was ranked 17th out of 4,500 for best 5-year performance.

So it’s safe to say she has the experience and track record to pay attention to…

(I remember studying some of her early webinars in the early 2000s and being massively inspired by her attention to detail and work ethic.)

In 1995 Linda co-wrote book the trading strategy book “Street Smarts” where she outlined a selection of trading strategies that she deployed.

Including:

  • Turtle Soup
  • ’80-’20s
  • Momentum pinball
  • 2- Period ROC
  • The Anti
  • The Holy grail
  • ADX Gapper
  • Whiplash

I’m sure Linda said in one of her recent webinars that many of these have a limited edge now.

Apart from one.

The Holy Grail.

So let’s focus on that.

Holy Grail Trading Strategy

Of course, the name was tongue-in-cheek. Linda has a reputation for making up cool names for setups.

Short skirt, burning dog…

What are the holy grail rules? Pretty simple actually.

  • The 14-period ADX must be greater than 30. This helps to identify a market in a strong-trend environment.
  • Wait for the price to retrace back to a 20 EMA
  • Go long above the high of the bar that touched the moving average

Example on a 5-minute S&P chart

Stops go under the recent swing low.

Another example: One that did not actually trigger on the USDJPY daily chart.

The Holy Grail is a nice simple strategy to follow. Trending market, wait for a pullback. Then most crucially, the buy stop above that trigger bar with a stop below the swing low.

Nice trade structure.

You know where you are getting in and know when you are out if you are wrong. (Linda also stated that this strategy can be used for intraday trading, and if you get a nice move on day 1, you could consider holding overnight for day 2.)

Personally, I think an additional filter only looking for the 1st pullback after a trend would help. If the ADX has been over 30 for a while in a strong trend with multiple pullbacks not quite hitting the MA I’m not sure I’d want to get long…

But that’s the name of the game, research some strategies then decide if they are right for you.

Click here for more trading strategy ideas, including designing a day trading playbook, mean reversion strategies, and day trading the close.