Level 6: Advanced StrategiesInteractive
The Holy Grail Strategy (Linda Bradford Raschke)
30 min readUpdated Mar 2026
Disclaimer
This educational content is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Trading involves risk of loss. You should consult a qualified financial advisor before making investment decisions. Swingfolio is a trade journaling tool, not a financial advisory service.
Developed by Linda Bradford Raschke in Street Smarts (1995), the Holy Grail identifies pullback entries in the direction of a strong, emerging trend. The name is ironic. The real "holy grail" is the ability to identify and trade with the trend, not a perfect entry.
When the ADX rises above 30, a strong trend has developed. The natural tendency after a strong move is for price to retrace. The Holy Grail buys that retracement, betting the strong trend resumes.
This is a trend continuation strategy. You are not picking tops or bottoms. You wait for a confirmed strong trend, then enter on a pullback to a key level.
ADX Direction Matters
ADX above 30 alone is not enough. The ADX must be RISING above 30. A declining ADX above 30 means the trend is weakening, not strengthening. Only enter when ADX is both high AND trending upward.
After exiting a Holy Grail trade, the ADX must turn up above 30 again before taking a new trade. This prevents over-trading during consolidation periods.
The 20-SMA acts as a magnet during pullbacks because it represents the 4-week average price, many institutional algorithms reference it, and traders watching for "buy the dip" opportunities converge at this level.
Strategy developed by Linda Bradford Raschke. Published in Street Smarts: High Probability Short-Term Trading Strategies (1995). All strategy details presented for educational purposes.
Key Takeaways
Try This
Add the ADX indicator and a 20-day SMA to any stock chart. Scroll through the last year and find instances where ADX rose above 30 while price pulled back to the 20-SMA. How many valid setups do you see? For each, note where the buy stop would have triggered and where the swing low stop would have been placed.
Log Holy Grail setups in Swingfolio and track your ADX + pullback win rate over time.
Start Tracking FreeDisclaimer
This educational content is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Trading involves risk of loss. You should consult a qualified financial advisor before making investment decisions. Swingfolio is a trade journaling tool, not a financial advisory service.