Williams has created several market indicators the most famous of which is Williams %R and authored numerous books on trading. He was the first recipient of Trade Stations Life Time Achievement Award and won the 1987 World Cup Championship of Futures Trading supervised by Robbins Trading Company where he famously turned $10,000 to over $1,100,000 (11,376%) in just one year, with real money. Ten Years later his daughter Michelle won the same contest.
How I Made $1,000,000 Trading Commodities
This for me is one of the classic trading books and while written back in 1973 before the age of the internet, it still stands the test of time and I would urge any trader to read it. Many traders are always looking for the latest and greatest trading books, however, most professional traders know that the “old school” books are very often the best.
Here are some of the highlights of the book and sound trading advice any trader can incorporate in their trading strategy.
Trading Strategy
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Follow the commercial traders, these are the “smart money” traders and can indicate value in the market and contrary trading opportunities .
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Open Interest is the major part of Larry's trading strategy. His theory is based on the fact that the Commercials represent open interest. If open interest increases, it is a sign of bearishness in the market. A decrease in open interest indicates bullish stance is being taken by the commercial traders.
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Trade with the trend Use a 10-week moving average to define the trend. If it is pointing up, you only take trades on the long side. If it is pointing down, you only take trades on the short side.
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For timing trading signals he likes to use of his %R indicator which works in a very similar way to the stochastic indicator.
Money Management
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Never invest more than 30% of your trading equity and less for new traders (20 %)
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Do not diversify to much trade no more than 6 markets at any one time.
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When you feel like you cannot lose and feel over confident of a trade chances are you probably will lose! -
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Risk no more than 5% of your capital on any trade.
Larry Williams a Personal View
For me, he was one of the authors who inspired me to become a trader and even after 30 years I still consider his Williams %R, an essential indicator for generating more accurate trading signals and I also just like him, view the CFTC Net Traders Positions as one of the most important reports of the trading week.
Larry Williams Books
The Secret of Selecting Stocks
How I Made $1,000,000 Trading Commodities
How Seasonal Factors Influence Commodity Prices
How to Prosper in the Coming Good Year
The Definitive Guide to Trading Commodities, volume 1
The Definitive Guide to Trading Commodities, volume 2
Long Term Secrets to Short Term Trading
Day Trading on Line
The Right Stock at the Right Time
