Mr. Williams responds

Discussion in 'Technical Analysis' started by Pekelo, Mar 6, 2006.

  1. Well, then, I guess I'm...speechless.
     
    #41     Mar 8, 2006
  2. I am of hte opinion that someone cannot just show you their set ups and you can replicate their results so easily. This was covered by a few traders in Market Wizards as well. No matter the tools, the trading approach is always a result of the individual's skill, experience, emotional strength, risk tolerance, discipline etc....

    One Wizard was saying that even if he taught someone his exact set-ups and system they could make more than him, less than him or even lose money because the individual intangible factors come into play.

    So even if I believed in LW, I might not want to spend the thousands on the seminar to watch him trade because I doubt I would see things like him. I would pick up a book or two to see if I could adapt his style to my own personal and individual talents and skills.

    As I said, the MW books made it clear that just watching someone trade or knowing their set-ups is not enough to be successful or even replicate their success.
     
    #42     Mar 8, 2006
  3. Pekelo

    Pekelo

    That post wast made exactly at noon, about 10 minutes after the LOD. Right now we are 80 points higher, since I posted....

    I guess you are not going to read my journal, but hey, your loss....

    But if you feel, that it is an easy business to predict, why don't you start predicting? (I hope you notice I turned the table on you)
     
    #43     Mar 8, 2006


  4. LW is my friend. I dont need to attend the seminars.

    :D :D

    surfer
     
    #44     Mar 8, 2006
  5. Those guys wouldn't admit it anyway, I am of the opinion that what we do is pretty simple. That success leaves clues, and that anyone can learn to be a profitable trader. That doesn't mean they will be a market wizard, but they can be consistently profitable.
     
    #45     Mar 8, 2006
  6. Alert the media.
     
    #46     Mar 8, 2006
  7. Pekelo,
    Nice call. When will you start your journal?
     
    #47     Mar 8, 2006
  8. volente_00

    volente_00



    I agree about a trader selling seminars and bs courses, but how do you deny the fact when he trades live at these seminars and makes money ?
     
    #48     Mar 8, 2006
  9. The very last (apparently) of Larry Williams' seminars was written up in Trader Monthly, Oct/Nov 2005. It was held on St. Croix (that's why he does it!...) in early Nov. 2004. Here is that colorful story, in full.

    Also reprinted are all 7 readers' comments, incl. a couple of noteworthy ones from the author himself, Matt Blackman, who claims serious negative editing bias, after his submission. In any case, enjoy.



    Larry Williams's Last Stand

    For the past five years, legendary trader Larry Williams has speculated $1 million before legions of pie-eyed disciples. Now he's pulling up the tent stakes on his seven-figure show. We snuck in to see what happens when a trading slugger takes his final cuts.

    By: Matt Blackman

    Issue: October/November 2005 , Page 92

    It's a sultry afternoon on the island of St. Croix, in the U.S. Virgin Islands, where a man named Glenn, in khaki shorts and Tevas, strolls to the bar at the Carambola Beach Resort. He orders two Heinekens and heads back to his table, where he and a man named Cody, sporting a blue Hawaiian shirt, lean over a laptop and engage in feverish discussion, oblivious to the paradise around them.

    On the laptop screen sits Glenn and Cody's obsession: a chart of the S&P 500 Index. Although fresh off their flights, they've come here for neither the babes nor the beach -- they've come to spend the next three days sitting under fluorescent lights with 50 other traders, breathing recycled air and watching 62-year-old Larry Williams trade $1 million in real time, with profits shared among the attendees.

    It's called the Million-Dollar Challenge, and in the five years since Williams began hosting it, this dog-and-pony show has achieved a cultlike status, hopscotching to exotic locations around the globe and affording its participants the rare opportunity to witness a trading legend at work. This is the sixteenth Challenge for Williams since October 1999, and -- much to the chagrin of his devotees, who long ago drank Williams's Kool-Aid -- it will be the last. Williams boasts that in 15 seminars over a total of 45 trading days, he has already made $1,028,750 in profits, or more than $68,000 per Challenge. Now he's pulling up the stakes on his tent, claiming he's tired of the travel, and traders like Glenn and Cody have paid $4,500 each to watch the farewell show.

    This is Glenn's first Challenge. Tall and lean, he's a part-time helicopter pilot who operates his own Bell Jet Ranger and looks the part in Serengeti Aviator sunglasses. Fairly new to the financial game, Glenn has given himself five years to learn how to trade.

    Cody, stocky with broad shoulders, sports a marine-style crew cut and a military swagger. This is his sixth Williams seminar. He's had a hard time trading recently. The fact that Hurricane Ivan beat up his Florida home two months ago hasn't helped his confidence.

    During a lull in the conversation about markets, Glenn asks Cody how much he's spent on programs, books and seminars since he began trading. It's an innocent question, but it catches Cody off guard. He takes a minute to do some mental calculations. Including his trading losses, Cody estimates he's down about $800,000 so far.

    Larry Williams began his trading career in 1962 and has since authored eight trading books that are still in circulation. His latest, on deciphering and using Commitment of Traders reports, is due out any day now. But it was his 1987 victory in the coveted Robbins World Cup Championship of Futures Trading -- when he turned $10,000 into $1.1 million in under 12 months, a record that has yet to be broken -- that made him a household name in trading circles.

    A former boxing manager and amateur archaeologist, Williams excavated his first trading fortune in the early 1970s, then went on to write about it in the aptly -- if unimaginatively -- titled "How I Made a Million Dollars Trading Commodities." Evolving into a futures-market guru (even his daughter Michelle, a novice using Dad's tricks, reportedly made $110,000 trading a few years ago), Williams says he has trained more than 200,000 traders.

    His books have been translated into at least six languages and are sold worldwide. Among a lot of rookie traders, Larry Williams is big.

    How big? In 2000, Williams held a Challenge in Shanghai. "When we landed at the airport, we were met by more than 100 fans, all wanting his autograph," recalls Glenn Larson, the founder of Genesis, the software platform Williams uses to trade. "Everywhere we went, we were treated like rock stars. We didn't realize why until someone showed us a copy of the Shanghai Securities News, which is like the Wall Street Journal there, with the 'Williams %R' indicator on every stock chart." Ask a group of traders what they think of Larry Williams, and you'll get a variety of answers. Some are reverential almost to the point of cult worship. Some call him a snake-oil salesman who's a better marketer than trader. Others say his systems aren't that special. Williams has heard it all. "Let's face it," he says. "It's hard to make money in markets, and there are many frustrated traders out there. Because they can't do it, they think no one can, so in their minds any system that helps traders must not work.

    "You never hear people bemoan Barry Bonds's salary, saying 'If he's so rich, why is he still playing baseball?' or 'If Bill Gates is so rich, why is he still working?' But for some reason, successful traders who teach and write books attract those kinds of comments."

    In 2002, while the post-bubble doom and gloom still prevailed, Williams wrote "The Right Stock at the Right Time," which predicted a glorious bull market just beyond the horizon. Tracking the best market years of the twentieth century, Williams found that the majority ended in 2's and 3's, and that years preceding a presidential election had historically been the best of any four-year period. Williams saw reason for hope. In March 2003, as reviews of the book hit the press, the market did indeed begin to climb.

    Cynics note that such prognostications essentially hold a 50/50 chance of being correct -- if not better, given that the bull market that doesn't come sooner always comes later. Contrarians dismiss the sheer numerology of it all. But for the 52 traders who have come to St. Croix, such stories become chapter and verse of the gospel, tales that imbue godlike status to a man like Larry Williams. The traders want answers. They want his secrets. And they have not flown in from around the globe to see Larry Williams fail.
     
    #49     Mar 8, 2006
  10. Day One: It's another glorious Caribbean morning, the bougainvillea-scented air wafting along on the sea breezes. But in the chilly, windowless room where the final Million-Dollar Challenge begins, the quiet is punctuated only by the sound of air-conditioning fans humming in the background. On each desk sits a spiral-bound book with more than 150 pages of typed notes, formulas and indicators, all related to futures. Williams walks in, dressed casually in a blue Hawaiian shirt and tan khaki shorts. He has an athletic build and a serious set of calves for a 62-year-old man.

    He silently scans the room through wire-rimmed glasses, then welcomes the group in a soft-spoken voice that's more chaplain than type-A trader. If whispering is a ploy, it works. Like a classroom full of brown-nosers, the attendees sit up in their chairs, craning to hear his every word.

    "Paul Tudor Jones averages 25 percent a year, John Henry 18 percent, and Steve Cohen has an incredible record of 50 percent per year," Williams begins. "They are the very best in the business. Yet many traders start out believing they can make 200 percent or more a year -- and that's the one major reason most of them fail. For those sorts of returns, you have to be fully invested in every trade. One or two bad trades, and you're broke." It's November 1, the day before the U.S. presidential election, and the markets are choppy. The race is close. Based on the lack of volume, most players appear to be sitting on the sidelines. Not a great day for trading -- but a great day to languidly discuss strategies.

    Williams explains that, due to the lack of volatility, there are only two potential trade setups today: one to short 20 contracts of 10-year Treasury bonds at 113.17, and two S&P 500 long trades. He buys five S&P 500 contracts for a day trade and 10 more to hold overnight.

    When the bonds hit his 113.17, he shorts them using a derivation of something he calls the "Oops" pattern. Simply put, it holds that most traders tend to jump on a breakout, but as soon as they realize it's a fake-out, they panic; those who recognize this can go short, then catch a ride all the way down as others run for the exits.

    Or so the theory goes.

    As the traders wait to see what comes of Williams's -- and, by extension, their -- positions, he explains another of his signature trades, something he calls "Blast Off."

    "Monday, Thursday and Friday are my setup days, as many notable rallies have taken place the next day," he says. "Next, I look for the pattern consisting of an inside day -- one that has a lower high and higher low than the prior day. The direction of the close of the inside day doesn't really matter. The close of the day before the inside day has to close higher than the opening of that same day.

    "When we have an inside day following an up-close day, it suggests that the market may be catching its breath before another up day," he continues. "If the opening on the day following the inside day is lower than the high of the inside day as well as the high of two days ago, I buy on a stop at the high two days ago."

    By late afternoon, both S&P trades, which had been profitable, have dropped back to the entry price. Williams exits the day trade after missing his profit target, per his rules, for a small loss. When one participant asks why he didn't sell both, Williams is resolute: The system has not given him an exit signal on the second.

    Later, during a break, an attendee named Mike, who manages a small fund, says he's impressed by Williams's loss: "Larry does what most traders are not willing to do. Even in the face of adversity, he allows the system to dictate the trade."

    Fred Wenninger is 65 and wears it well, standing six-foot-two, looking like a cross between Paul Newman and Jimmy Stewart. During a break in the seminar, he stands in a corner regaling a group of admirers with his rags-to-riches tale. A former Hewlett-Packard division manager, he has been retired for seven years; he now spends his days trading.

    Wenninger owns a winter home in Alva, Oklahoma, and a summer home in Spokane, Washington. He occasionally commutes between the two towing a Hughes 300C helicopter behind his motorhome in a trailer he designed himself. While on the road, he uses a high-speed two-way satellite dish to access the Internet from any point along the way. "I can surf and send e-mail. I download the Genesis data updates every night. I can trade anywhere." After trying to develop and trade systems in the mid- to late '90s on his own, it became obvious to Wenninger that he needed help when his $50,000 trading account had dwindled to less than half of what he'd started with. "Then I came across a Web site that discussed how Larry Williams traded $1 million live," he says with the effusiveness of an infomercial testimonial. "It impressed me that he put his mouth where his money was. I went to the seminar. He offers your money back if you don't feel it's worth it after attending the first morning -- and I almost asked for my money back. He was talking mostly about trading the S&P 500 futures. I'd never traded them, but I decided to stay and start trading the index futures and bonds. I've been getting a 40 percent return on my investments ever since." When prompted for details, he smiles broadly. He's clearly itching to share. "I trade well over 100 patterns, some of which I've developed, most I got from Williams's seminars and some that friends have shared with me. I've collected quite a few over the years."

    Wenninger pulls out some old booklets and points to a formula: IF Next Bar Open <= Open + .5 And High > High 1 bar ago And High 1 bar ago > High 2 bars ago And High 2 bars ago > High 3 bars ago And High 3 bars ago > High 4 bars ago And Open > Open 1 bar ago And Open 1 bar ago > Open 2 bars ago And Open 2 bars ago > Open 3 bars ago And Open 3 bars ago > Open 4 bars ago And Close > Close 1 bar ago And Close 2 bars ago > Close 3 bars ago And Close 3 bars ago > Close 4 bars ago Or Close 4 bars ago > Close 5 bars ago -- Then sell limit at close.

    The formula essentially predicts that after five straight days of increasing highs, opens and closes, the price will decline -- contrary to what many looking for breakouts might think. Wenninger claims it offers a win/loss ratio of 3.77, a winning percentage of 94.7 percent. So far today, Larry Williams would kill for those numbers.
     
    #50     Mar 8, 2006