020 – Trading Insights from 50+ years – Larry Williams

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Larry Williams has been trading futures and stocks for over 50 years.

In 1987 he won the World Cup Championship of Futures Trading ®*, turning $10,000 in to over $1.1 million in 12 months, that’s a cool 11,000% return and the highest return to ever be achieved in that competition. 10 years later his daughter won the same competition with a 1000% return and his students have won the competition in many other years too.

He is a published author, with a long list of best-selling books and has also created a number of market indicators including Williams %R, Ultimate Oscillator, the Williams Accumulation/Distribution Indicator, COT indices, cycle forecasts, market sentiment and value measures.

In this weeks episode we discuss conditional trading, understanding what drives prices, the misuse of indicators and how to apply them correctly. We also discuss cycles, forecasting markets, what to look for in market tops plus loads of listener questions where Larry shares tips and insights from 50 years of trading.

Topics discussed

  • What it means to be a conditional trader
  • Why buy and sell signals need to be analysed in the context of market conditions
  • Fundamental factors that drives markets
  • Interpreting the COT reports correctly
  • The buying differences between retail and commercial traders and how it can indicate future market direction
  • Why you should approach trading like a combination lock
  • Coming up with unique indicator ideas
  • The mis-use of indicators and how to use them correctly
  • Trading styles of successful traders
  • Forecasting markets based on technical factors
  • Characteristics of stock market tops and bottoms
  • The fundamentals to watch during market tops

Listener questions

  • Issues with the Forex market
  • Trading prices patterns, do they still work and are they scalable
  • Why short term price patterns work
  • What happened in 2002 and why you need to consider that when backtesting
  • Will trend trading always be effective?
  • How many positions to trade at one time
  • Money management tips for those who aren’t into heavy maths
  • Choosing the best markets to trade
  • Favourite Larry Williams indicator
  • What keeps Larry motivated to trade after 50 years
  • What drives peak performance (it’s not money…)
  • The key component that really drove Larry to becoming a consistently successful trader
  • How Larry lasted so long in the industry
  • How to overcome emotions when entering or holding trades
  • Larry’s biggest contribution to the trading industry
  • Why Larrys strategies have lasted the test of time
  • Common traits against the most successful traders
  • The trading model that’s worked for Larry for over 50 years

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Resources

Reminiscences

Quotes

Top tips from this episode

Here are 2 of my favourite takeaways from my chat with Larry:

  • Conditional trader – Larry likes to call himself a ‘conditional trader’, he looks at conditions in the market using various tools, including COT reports, seasonality, cycles etc first, then he overlays entry and exit conditions based on those conditions. Charts don’t move the markets, conditions drive prices, so the underlying condition needs to be determined first.
  • Trading should be like a combination lock – Larry likes to see 3 or 4 conditions to really get trades to work, like a combination lock where you get one number first, then you look for the 2nd number, until they are all lined, that’s when the lock opens. Larry does the same with his trading, he likes to see a number of conditions all line up to really get the trades to work.

*Trading futures and forex involves significant risk of loss and is not suitable for everyone. Past performance is not necessarily indicative of future results. The World Cup Championship of Futures Trading and the World Cup Championship of Forex Trading are registered marks of Robbins Trading Company’s affiliate Robbins Financial Group.  Accounts trading in the World Cup Trading Championships (WCC) do not necessarily represent all the WCC accounts controlled by the competitor and may produce results different than the results achieved in other WCC accounts of the competitor.

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