Price Action · Capital Management

Linda Raschke’s Short-Term Blueprint

Known for precise price action and strict money management, Linda proved short-term trading can be systematic, repeatable, and sustainable.

Structure ID

Emotion Review

Constant Risk

Price Action Triad

Structure · Trigger · Multi-timeframe

Structure First

Diagnose the market structure (trend, range, breakout) before picking tactics. “Structure dictates tactics” avoids forcing trend signals inside noise.

Price Action Confirmation

Use key reference levels (prior highs/lows, open, VWAP) to confirm reversals or continuations. Engulfing bars, failed breaks, and coil breakouts are staple triggers.

Multi-Timeframe Alignment

Use 60-minute/daily charts for bias and the 5-15 minute chart for execution so macro context guides micro entries.

Capital Management Rules

Control drawdowns, extend career

Fixed risk per trade: expose only 0.5%-1% of equity and derive size from the stop distance.
Scale out: take half off near 1R, trail the rest with stops or moving averages to let winners extend.
Daily loss cap: stop trading after three consecutive losses or a 2R drawdown to avoid tilt.
Log equity curve and mindset; cut size or pause when off balance to reset the win-rate baseline.

Execution Reminder

Linda often says “Good trades come from a calm trader.” Money management keeps the mind calm.

Classic Short-Term Setups

Templates you can practice today

Holy Grail Pullback

In strong trends, wait for a pullback to the 20EMA with RSI < 40, then enter on a confirmation bar; stop goes below the swing low.

False Break Reversal

When price breaks a range but snaps back inside with a reversal candle/volume contraction, fade it and target the opposite side.

Coil Before Expansion

Bracket tight coils with stop orders in both directions; once price moves 1R in profit, move stops to breakeven to dodge fake-outs.

Practice tip: pick one setup, trade at least 30 samples, and log P/L plus execution notes to assess real edge.

Bridge Short-Term and Macro

Short-term trading needs structure and money rules, but macro and industry context guide instrument selection.

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