Article Reviews, Trading

Tidbits and Lessons from Larry Williams Looking Back at 50 Years of Trading

There’s a short article at Futures Magazine on Larry Williams looking back at 50 years of trading. Link to original article here. I’ve captured some of the more interesting bits below.

What Williams views are his major accomplishments

  • Writing the first book on seasonal patterns in 1973
  • Developing measures of accumulation and distribution
  • Originating volatility breakout strategies
  • Popularizing the use of the Commitment of Traders (COT) data
  • Having taught Bill Cruz, the founder of TradeStation, Tim Mather, the founder of CQG, and Glen Larson, the founder of Genesis Financial Technologies.

Some tidbits

  • Bollinger bands are a re-work of Keltner bands, which are a re-work or what Owen Taylor had done.
  • Williams’ accumulation/distribution studies are a spinoff of Joe Granville’s on-balance volume, which was a spinoff of Cumulative Volume work done by a fellow named Woods in San Francisco.
  • Williams’ %R is a version of %AD that Allan Davis developed after looking at Stochastics.

Lessons for traders

  • Price goes up or down, from point A to point B, due to fundamental conditions. Hence we must understand fundamentals. However, the path price takes is not direct; it is driven by the news and emotions of the day. That’s where technical analysis shines.
  • Don’t bet big on any trade.
  • Use money management, nothing is more important to survival.
  • Fade the advisors and public; they are most often wrong while the commercials [the big guys] are most often correct.
  • Don’t let emotions run your trading game.
  • Trade what you see, not what someone tells you that you should be seeing. Forget the news; trade what you see.




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