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Question on Larry Williams' method

Discussion in 'Strategy Building' started by Georgii, Apr 2, 2009.

1. Georgii

Hi all,

I've been reading Larry Williams' "Day Trade Futures Online" (c) 2000, Pub. Wiley and Sons.

I've come across a chart that I don't quite understand. On "Volatility Breakouts- The Momentum Breakthrough", page 75, Williams writes:

Let's look at the very best results of several nonrelated commodities using a variety of points for measuring the explosion. Table 4.1 shows buying tomorrow at a percentage of today's range added to today's close. The data, listed in order, shows the commodity, percentage of range, dollar profit, accuracy, and average profit per trade.

I am now going to try to reproduce the chart...

Commodity = Cattle
Percent Range of Buy/Sell Value = 70/50
\$ Profits = 24,556
Percent = 44
Average Profit = 92

And it goes so on and so forth for a number of different commodities.

Williams continues...

In this table, I have even provided the best percentage of the previous day's range to add to the close for a buy and to subtract for a sell. In this, and all data shown, no stop was used and you were always long/short.

This table shows only the best percent volatility add-ons for buys and subtracts for sells; and again in the data for table 4.1, we added the volatility factor or filter to the previous day's close. Using cattle as an example, if price rallied 70 percent of the previous day's range above the close, we bought and sold short at 50 percent of the day's range subtracted from the close.

My big question here is how to read the price chart exactly. I understand the commodity obviously, but the percent range of buy/sell value I don't quite understand - where is he getting these numbers from and what are they for exactly? And also, why are there two numbers of trades, and percent, average profit?

Thanks for any help...

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