Linda Raschke has been a full-time professional trader for 40 years. She is a key trader for many large hedge funds and also founded her own investment fund in 2002.

Linda Raschke has audited trading results and is interviewed in Jack Schwager's "The Witch of the Market" in 1992. Linda Raschke is identified as a market witch, on par with Mark Minervini and many other trader legends.


Only one moving average, which Linda Raschke has been able to trust and use for over 40 years to trade and make profits. So how did this sorceress use the 20 EMA for trading? Please read on.

The 20-period EMA is a 20-period exponential moving average, it is a variation of the MA (normal simple moving average), different from exponential. Thanks to this exponential variable, the EMA will be more sensitive to the price than the simple MA, that is, if you compare the EMA and the SMA on the chart, you will see the EMA stick closer to the price and quickly follow the price movement. , while the SMA will be slower.

1) The first use of ema 20 is to show the trend objectively:
  • If ema 20 is upward and the price is consistently above ema 20 then we tend to increase;
  • If ema 20 slopes down and the price is consistently below ema 20 then we tend to decrease;
  • If ema 20 is sideways and the price goes up and down continuously, ema 20 will not have a trend.
2) Determine your entry point: ema 20 is an area of value on the chart, on all timeframes, it is the average price of the 20 nearest candlesticks, so it is essentially an important resistance. most important in the short-term downtrend, and is the most important support in the short-term uptrend. We can wait for the price to touch the ema 20 lines while the market has a trend to enter the trend.

  • Sell when the price hits ema 20 in a downtrend;
  • Buy when the price hits ema 20 in an uptrend.
3) Determine the market transition: ema 20 sugar is like a magnet with a very strong attraction. Whenever the price exceeds this line, the attraction will "pull" the price back to the ema.
  • When the price is too far above ema 20, the market is overbought and tends to decrease;
  • When the price is too far below ema 20, the market is oversold and tends to increase.
  • You should avoid the trend when the price is away from the ema 20 because the pull will be pulled back.