Momentum Pinball: A Linda Raschke Strategy for Capturing Explosive Moves

Momentum Pinball: Riding the Wave of Momentum

Momentum Pinball is a strategy that Linda Raschke uses to capitalize on strong, directional moves in the market. The name "pinball" comes from the way the price seems to ricochet between support and resistance levels during a strong trend.

The Setup

• Identify a Trending Market: The strategy works best in markets that are exhibiting strong momentum.
• Use a Momentum Oscillator: A momentum oscillator, such as the 3/10 oscillator, is used to identify entry points. The 3/10 oscillator is a simple momentum indicator that subtracts the 10-period simple moving average from the 3-period simple moving average.
• Buy the Dips, Sell the Rips: In an uptrend, a trader would look to buy on pullbacks to the zero line of the 3/10 oscillator. In a downtrend, a trader would look to sell on rallies to the zero line.

Example: NQ Futures

On a 5-minute chart of NQ futures, a trader might observe a strong uptrend. The 3/10 oscillator pulls back to the zero line, providing a long entry opportunity. The stop loss would be placed below the recent swing low, and the profit target could be the next resistance level.