Market Wizard trader who modernised Keltner Channels
Linda Bradford Raschke
Linda Bradford Raschke (born 1959, Pasadena, California) is an American trader who began as an equity-options market maker on the Pacific Coast and Philadelphia exchanges in 1981, became a registered CTA in 1992 and later ran hedge funds before retiring from managing outside money in 2015. She was profiled in Jack Schwager's The New Market Wizards (1992) and co-wrote Street Smarts with Laurence Connors. StockCharts credits her with the modern ATR-based version of Keltner Channels, introduced in the 1980s.
What they argue
- Channel width is better measured with Wilder's Average True Range than with the simple high-low range used by Keltner.
- Failed breakouts to new 20-day extremes can be faded - the 'Turtle Soup' setup in Street Smarts.
Sources
Summaries are Be The Puck's paraphrase of public material. Be The Puck has no affiliation with the people listed.
Books and papers
- Street Smarts: High Probability Short-Term Trading Strategies (with Laurence A. Connors) (1995)
- Trading Sardines (2019)
Raschke and Connors' Holy Grail (ADX pullback to the 20-day EMA)
Rule and full recordTrend following · daily · with Larry Connors
In a strong uptrend, buy the first pullback to the 20-day EMA once price takes out the high of the day that touched it. Sell at the old high, or below the pullback low.
Best risk-adjusted results against buy and hold:
Keltner channel breakout
Rule and full recordBreakouts & channels · daily · with Chester W. Keltner
A channel two average true ranges above and below a 20-day EMA. A close above the top says the trend has room to run.
Best risk-adjusted results against buy and hold:
Raschke & Connors' Turtle Soup Plus One (failed 20-day breakdown)
Rule and full recordCandles & chart patterns · daily · with Larry Connors
Buy when a stock closes at a new 20-day low and climbs back above the old low the next day, betting the breakdown was a trap. It turns the Turtles' breakout rule on its head.
Best risk-adjusted results against buy and hold: