Street Smarts & TS Code with Larry Connors & Linda Bradford Raschke

Navigating the financial markets can be daunting, but with the right strategies, anyone can find success. Larry Connors and Linda Bradford Raschke, both seasoned traders, have shared their invaluable insights in “Street Smarts & TS Code.” In this article, we’ll delve into their techniques and how you can apply them to your trading endeavors.

Introduction to Street Smarts & TS Code

Who Are Larry Connors and Linda Bradford Raschke?

Larry Connors is a highly respected trader and author, known for his systematic approach to trading. Linda Bradford Raschke is a legendary trader with decades of experience, specializing in short-term trading strategies.

What is Street Smarts?

“Street Smarts” is a book co-authored by Connors and Raschke, focusing on practical, real-world trading strategies that have proven to be effective.

What is TS Code?

TS Code refers to the TradeStation code, a scripting language used to create custom trading strategies and indicators. Connors and Raschke have developed TS Code to automate their strategies.

Key Concepts of Street Smarts

Pattern Recognition

One of the core principles in “Street Smarts” is pattern recognition. By identifying specific patterns in the market, traders can predict future price movements with a higher degree of accuracy.

Short-Term Trading

Connors and Raschke emphasize short-term trading, which involves holding positions for a few days or even just a few hours. This approach reduces exposure to market volatility.

High-Probability Setups

The book provides various high-probability setups, which are specific trading scenarios that have historically yielded positive results.

Implementing TS Code

Why Use TS Code?

TS Code allows traders to automate their strategies, ensuring consistent execution and removing emotional bias. It also enables backtesting, which is crucial for validating the effectiveness of a strategy.

Getting Started with TS Code

To begin using TS Code, traders need access to the TradeStation platform. The platform offers a robust suite of tools for coding, testing, and executing trades.

Basic TS Code Examples

• Simple Moving Average Crossover: A basic strategy that buys when the short-term moving average crosses above the long-term moving average.
• RSI Overbought/Oversold: A strategy that buys when the Relative Strength Index (RSI) indicates oversold conditions and sells when it indicates overbought conditions.

Applying Connors and Raschke’s Strategies

The 80-20 Strategy

One of the strategies detailed in “Street Smarts” is the 80-20 strategy. It involves buying when a stock closes in the top 20% of its daily range and selling when it closes in the bottom 20%.

The Turtle Soup Strategy

This strategy is a contrarian approach that capitalizes on false breakouts. It involves shorting a stock when it breaks above a previous high and then quickly reverses.

The Holy Grail Setup

A trend-following strategy that combines the ADX indicator with pullbacks. Traders buy when the ADX is above 30, and the price pulls back to the 20-period exponential moving average.

Benefits of Using Connors and Raschke’s Methods

Consistency

By following proven strategies, traders can achieve more consistent results.

Reduced Emotional Trading

Automating strategies with TS Code helps eliminate emotional decision-making.

Improved Risk Management

The strategies outlined by Connors and Raschke include specific risk management rules, helping traders protect their capital.

Challenges and Considerations

Market Conditions

Not all strategies work in every market condition. Traders need to adapt and be flexible.

Learning Curve

Mastering TS Code and the strategies from “Street Smarts” requires time and dedication.

Continuous Improvement

Successful trading is an ongoing process of learning and improvement. Traders should continually refine their strategies.

Conclusion

“Street Smarts & TS Code with Larry Connors & Linda Bradford Raschke” offers a wealth of knowledge for both novice and experienced traders. By understanding and implementing their strategies, you can enhance your trading performance and achieve greater success in the markets.

FAQs

1. What is the primary focus of “Street Smarts”?

The primary focus is on practical, short-term trading strategies that have been proven effective in real-world markets.

2. Can beginners use TS Code effectively?

Yes, but it requires a willingness to learn and practice. TradeStation offers resources to help beginners get started.

3. How do high-probability setups work?

High-probability setups are specific trading scenarios that have historically shown a high likelihood of success, based on pattern recognition and market behavior.

4. Is short-term trading riskier than long-term trading?

Short-term trading can be riskier due to higher volatility, but it also offers opportunities for quick profits. Proper risk management is crucial.

5. What are the advantages of automating trading strategies?

Automation ensures consistent execution, removes emotional bias, and allows for backtesting to validate strategy effectiveness.