This podcast is brought to you by the award-winning prop firm, Fidel Crest,
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I know in my case,
the year I took $10,000 to 1.1 million and won the Robins World Cup
Trading championship. I mean, I was hiring a kite on that.
I probably would've been more stable if I was on cocaine or heroin .
I have yet, after 55 years of doing this,
to find incredibly high accuracy and incredible large risk reward ratio.
You don't get one. You get one or the other.
Everybody wants to jump in this thing and go fast.
They see all my students have won their trading championships and they win with
three, four, 500% gains. Or my actress daughter, Michelle Williams,
that took 10,000 to $110,000 when she's a 16 year old kid and they go, oh,
I can do that. Bill always said, Larry, the way you make money in the market,
I didn't understand this for a while,
is to have small positions and catch big moves. Well, at that point in my life,
I was young, I was trying to, I was betting the farm on every single trade.
He said, no, if you have a small position, you can only have a small loss,
but that small position can ride a bigger trend move.
So your average loss can be 3, 5, 10, 15 times your, your,
your average profit can be five, 10 times your average loss.
He said it's about having a small position so you don't get blown out and
looking for and catching major moves relative to your amount of money you could
lose. Well, my preferred strategy for the average person,
I really have one for stocks and one for commodity.
So let me talk about the commodity one.
Friday, folks, here we are on trading.
Now we've got Larry Williams back in the house today after six years.
In fact, we are re-releasing the interview that we did six years ago.
You're gonna find that I'm hopefully better now than I was then.
I'm sorry about that. Uh, and I can't believe, like,
if you listen to the quotes at the start,
I can't believe that I completely missed the fact until three years after the
interview that he is the father of Michelle Williams, the famous actress. I,
and he even said it in the interview and I never even knew it. Um,
right after this, we've got later on in the week,
we've got another video from a past guest. Derek Vander is back on.
He's having a great winning streak at the moment with one to three
R trades. They're sitting up there at, well,
when we recorded the video at 96% win rate from,
I think it was the start of this year or late last year,
you're gonna get to find out not just how he's done it, what he's done,
but also see the full strategy as it breaks down in, in its entirety.
So we're on there for about half an hour, Derek.
So that video's dropping and a reminder, other things going on here.
We've got the live streams happening. We've got a few traders, in fact,
three of them now taking on the Fidel CREs 50 K challenge.
You guys can take part in this as well.
There is a link below the video filler foreman and we'll see if we can get you
on. Now one of them is past phase one already,
so that means they've made 5% on the account. The other two are still underway.
Um,
and we've got a new trader on this week who's looking really promising cuz he is
a funded trader as well. So folks, that's all over there on the live streams.
You're gonna need to subscribe to the channels for that so you don't miss them
when, when they pop up. Uh, another thing I spent the day with my new sponsor,
black Bull Markets last weekend on the back of a boat. Uh,
what I'm gonna do is actually show you the video shot of me just about to get
flipped. So if you're listening to the podcast,
then you might wanna jump onto the YouTube channel to see this video.
Then we're gonna hit play on now, right? So it wasn't quite flipped,
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there's Auto Pass solution there as well. And then we've got a $1 trial.
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podcast description, right? Enough from me.
Let's hear from my sponsor and then get on with this interview with
Larry Williams.
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Welcome Larry, thanks for joining me here on the 52 Traders Podcast this week.
Oh, my pleasure, cam. Look forward to seeing if we can't have some fun today.
Oh, let's hope we do. Okay,
so I've already mentioned some of your highlights and I know that's just a small
party story.
So can you tell the listeners a bit more about you personally and what first
attracted you to trading?
Well, I was attracted trading because it looked like easy money. Uh,
my dad had worked in an oil refinery and it was hard, dirty, stinky,
sweaty work. And uh,
when I found out you could make money just buying something and went up,
you made a hundred bucks in a day, this stock went up one point. This is for me,
this your beach refinery work. That was horrible work.
So it was really just trying to avoid a job I think is what attracted me to it.
And uh, and was there anything that sort of triggered you off in that direction?
Was, did you, uh, did you hear about, how'd you hear about it?
Uh, actually, I, uh, asked the guy one day on a newspaper. I pointed something.
He said, most active stock. He said, this is, uh,
I don't know what the stock is. It's up one point. What does that mean? He said,
you could have made a hundred dollars,
you bought it yesterday and got out it at that price today.
And I was in college at the time,
I was an art student and switched to a journalism student cause I couldn't draw
very well compared to other people. And I thought, wow,
this is a hundred bucks. Which back in, in 1962 was, you know, a car,
a brand new car cost like $800. So it was a huge amount of money. And I said,
this is, I gotta figure this one out . Sure, of course.
I've been working hard at it ever since.
Fair enough. 1962 had a number of years of experience under your belt. Uh,
more than I think almost anyone on the, uh, that I've had on the show to date.
Um, right. So for those listening, for the first time, we're gonna enter around,
I'd like to call the fundamentals.
So this is where we'll be asking Larry some to tell us some stories that will
help you understand what makes him a successful trader.
So can you give the listeners some insight into your trading,
your trading style, the strategy you use, timeframes, winning percentages,
instruments, those sorts of things?
Well, let's talk about timeframes. First of all,
I think as we all get into the market, we're very short term timeframe traders,
if you're going to be a trader. And, um, it's fun to do that,
but it's pretty tough life. Um, so I did it for a while,
but now I'm 74 years old. I really don't need another trade. I want a big trade.
So at some point in my life, I, I don't recall the exact year,
but maybe 1974, I, I had the cognition.
That technical analysis kind of sucked by itself. There had to be more.
I was just looking at charts and most of the stuff that I read in the book
didn't work. And, um, and I proved and my own trading account.
Yeah. Um, but I realize that conditions move markets.
And so I, I'm a conditional trader. I'm not a technical trader.
I look for conditions. Some are technical,
some are fundamental that I can associate with times in the past when we've seen
significant up or down moves. And uh, to me it's all about conditions.
And then I can put in the technical stuff cam on top of that technical analysis
is gonna gimme trend changes, market structure, stuff like that.
But really I think it's a combination of two elements to be a successful trader
and identifying your timeframe because, um, uh, you know, uh,
when I was young I moved faster than I do now. Um, some people are sprinters,
some are marathon runners.
You have to find what fits you cuz you can't wear my shoes.
You gotta find what temperaments fits you. You know where you are.
You're in New Zealand,
totally different timeframe if you wanna trade the American markets than if
you're where I am in the Virgin Islands. So your lifestyle timeframe,
you gotta consider all that.
You just can't mock up somebody else and think you're gonna be wealthy.
And, and so looking at the, I suppose he's talking about timeframes there.
So what, uh, what about like duration of a trade?
So you're looking for longer term trades, sort of more investment style, uh,
entries, or how does that work?
Well, the real key to making a lot of money in the market,
an old guy told me, bill Meen, who was kind of, uh,
helped me a lot and understand the commitment of Trader Report. Uh,
he had been a member of the Board of Trade and,
and he was the only person that ever knew what this was and taught me about it.
And I eventually went on to make my career out to write books about him.
But Bill always said, Larry, the way you make money in the market,
I didn't understand this for a while,
is to have small positions and catch big moves. Well,
at that point in my life, I was young, I was trying to,
I was betting the farm on every single trade. He said, no,
if you have a small position, you can only have a small loss,
but that small position can ride a bigger trend move.
So your average loss can be 3, 5, 10, 15 times your, your,
your average profit can be five, 10 times your average loss.
He said it's about having a small position so you don't get blown out and
looking for and catching major moves relative to your amount of money you could
lose. And that really is the basis of anybody's success in the market,
regardless of what strategy they use.
And so if we had to sort of dive a little deeper on, on the,
on the numbers and stuff. So what mean, what,
what does it look like from a winning percentage and a, um, I suppose, uh, uh,
yeah, winning percentages, draw downs, that sort of thing for you. Sure.
People always ask me about what percentage of my trades are profitable.
And that's really probably the last thing that I look at.
I'll pull up one of the trading systems we trade right now.
And I can tell you it's pretty good trading system and uh,
it's accuracy is high, but whenever you get accuracy, you get another problem.
Uh,
this trading system trades the s and p e minis and in the last year it's been
86% Correct. Which is really great accuracy,
but the average profit is about equal to the average loss.
So you're always gonna get one thing or the other.
If you're gonna get an average profit 10 times the average loss,
which is the ideal thing, your accuracy's gonna be maybe 35, 40%. Cause you're,
you're gonna strike out a lot if you're gonna be highly accurate,
you're gonna get things like I'm doing here in my shorter term trading programs
where the risk reward is a,
my average one is about equal to my average law.
So I have yet after 55 years of doing this to find
incredibly high accuracy and credible large risk reward ratio.
You don't get one, you get one or the other.
So the trader has to find the one that fits his emotions.
Some people wanna be correct a lot of the time,
some don't care if they're ever correct,
but they want to catch that one big trade. So again, it's, you know,
you don't trade the market, you trade yourself, you trade your personality.
And so how many trades would you have running at any one time?
Uh, well I hate to have more than three or four trades.
I'm not that good that I can have 15 trades going in my mind. Uh, I think you,
you know, it's like multitasking.
You try to talk on a cell phone and have a cup of coffee and drive,
you gotta get in a wreck. Yeah. And my experience and people I worked with,
same thing. If you have a bunch of trades going,
unless you're a Steve Cohen or some absolutely incredibly brilliant person, uh,
the average guy is gonna end up in the gutters of the road.
And so, um, uh, so I suppose if you, if you, you mentioned s and p 500,
what about other markets are you in trading in other markets?
Well, I think, uh, sure I do. I trade everything. Um, I trade some markets,
uh, lend themselves to systematic trading bonds.
I have some automatic bond trading programs, gold programs, uh,
crude oil and e minis.
And I just trade them there in a cloud computer and they just go ahead and
trade. I don't know if I'm long or short and I just let 'em do what they do.
So that's part of my trading strategy, mechanical trading.
Then the other part is where, um, I'm selective.
I look at conditions and find a market that I think is going to have a big up or
down move and act accordingly.
And do you think everyone should have some sort of, uh,
algorithmic or mechanical, uh,
robot working in the background in some markets or no?
Nope, nope. Nope. Not at all. Uh, again, and I know this based on,
uh, research has been undone traders,
some traders must have a mechanical trading strategy.
It fits their personality. Others,
you could give 'em the best winning creating strategies in the world and they'll
screw it up because they want to tinker and play with it.
And they're creative and they, they dance in and out with it.
So you have to understand your own temperament and how you approach things. Um,
it took me a long time and I had that realization, um, that, uh,
I can develop my really great trading strategies, but I, I'd always
with them at the last and do things.
So they weren't as successful as they could be.
And finally when I had that realization that actually my son,
I was a psychiatrist, Dr.
Jason Williams did a lot of research on winning traders to see what winning
traders hadn't all had in common.
Nobody had done research on winning traders before just losing traders.
And that's one of the things Jason found Fon interviewing these phenomenally
successful traders was they all had a trading strategy that fit their
personality. Some were mechanical, some were discretionary,
but had to be what worked for them.
Oh, that's very interesting.
And it might have to actually get Jason on the show by the sounds of it.
I was talking about this exactly the exact same thing the other day. So, uh,
it might be worthwhile getting him on to talk about, uh,
psychology and just give the listeners a quick grounding.
Cause we haven't actually gone into psychology, uh, in any detail.
And I just had an email come through the other day where somebody was talking
about the fact that it was probably the smallest part of trading in their,
uh, in their sort of, when they look at their trading career,
it all sort of came back down to strategy. Um,
would you agree with that or would you disagree with that?
Oh no, there's quite a bit of stuff that makes a successful trader. Um,
yeah, I'll just prole away here for a moment.
If I start to boring you jump in. Yeah.
But one of the first things people look at money manage. I actually,
I didn't look at money manager early on in my career cuz I was,
I nobody had written about it. We didn't even know what it was about in 1960s.
I had no idea what money management was that came a lot later. Um,
but what I now realize, people talk about money management,
but that's not what it is. Money management isn't how you manage your account.
Money management is really your emotional management.
Some people can stand to lose $5,000 or 30% of their money on
a trade or on a trading strategy. Others can't.
So you need to find a money management approach that doesn't drive you wild
emotionally. And so for some people that's a huge risk. For others,
it's a small risk. So I can't say, ah,
here's the best money management strategy.
Ralph Vince has come up with the best money, money management strategy,
optimal F but a lot of people can't trade that because it's,
it's not risk adverse. It seeks risk. It,
it will always give you the maximum returns, but maximum arrest.
So you've gotta find something that you and maybe your wife are can live with
that. Uh, you can still be a normal human being without having this huge
sucker punch of emotions that the market can give us.
Right. Folks on here at the Black Bull Markets headquarters up in Auckland,
New Zealand and standing in front of their whiskey bar. Now,
if you like that kind of selection,
you're gonna love their 26,000 tradable assets from Forex, cryptos,
indices, stocks, you name it, they've got it.
So folks go and check 'em out@blackballmarcus.com or click the link under the
video or in the card above.
Yeah, yeah, I know what you mean. I mean, do you, do you think there's a,
is there a sort of special, I think we'll get this into a,
into this a bit later in the show,
but is there a special technique that you've come across or a common technique
to, to get around that sort of emotional connection to money.
Y Well, no, I, I think we all,
um, money means a lot because we worked for it and it,
and it shows that we're losing things. Um, most of us, I know, in my case,
the year I took $10,000 to 1.1 million and won the Robins World Cup
trading championship. I mean, I was hiring a kite on that.
I probably would've been more stable if I was on cocaine or heroin as
it, what it does to your personality. I was just a horrible person.
Not that I've ever been that good of a person,
but you just get so damn full of yourself. And,
and so the emotions you can be, it's manic really.
You can be manic or you can be depressive, and it really is the amount of money.
The the other thing that I've learned in my trading, I don't mind losing 30,
$40,000 in a trade, uh, as a,
it's as a percentage of my bank role. It's not even 2%,
but it took me a long time to, to handle the dollar amount.
It wasn't the percentage of risk, but when I grew up, we were dirt poor.
Our house cost $10,000. So if I lose 10,
$15,000 in a trade in a day, I have a lot of like, geez, Larry,
you know this, what are you doing here? Uh, it was just a dollar amount.
So that's me. That's probably different for everybody.
But you have to find that, um,
internal point in yourself where the dollar amount and the percentage of risk
you can live with,
then you can take anybody's money management strategy and insert your
personality into it and you'll have a strategy that fits you.
Okay. And, uh, so what does your typical trading day look like these days?
Well, uh, it's kind of unusual . Um,
my typical trading day really begins about now the markets just close.
And so as soon as we're through with this, I'll start working on the markets,
figuring out what positions, if any I'm interested in.
I'll place my orders tonight. And, uh,
then I really won't look at the markets too much until tomorrow afternoon when
the markets close. And that's really what I learned when I was living, uh,
in Sydney, Australia, uh, because of the time zones. I would place my,
uh, trades about 10, 11 o'clock at night, go to bed, wake up in the morning,
gingerly,
walk over to my computer to see how many things I'd been stopped out of,
about what I'd lost or made. Open it up and kind of peek at it like, oh,
what happened like Christmas morning every morning?
And I learned from that not to interact with the markets.
It was really a, a grandly helpful experiment.
So I still more or less trade that way. I seldom will,
will call a trade during the day. I, I know,
I know tonight what I wanna do tomorrow. If I don't, I shouldn't be trading.
Okay. Might, might be helpful for me living on the,
in the side of the world as well.
Yeah, you're in a great,
great place to learn to trade because you don't worry about stops.
You place your stops, you know it's there. You don't have to,
are they going to get me? What's going to happen?
All that yada yada metal stuff's gone. You go to bed,
have a nice glass of Shira from, uh,
Australia and go to sleep or have a, a great, uh, Sion blanc from New Zealand.
Yeah, indeed. Right. So in the beginning,
what do you think differentiated you from the average ma mum or dad trader out
there? I mean, what traits did you have and what actions did you take?
Well, I think, uh,
one of my strengths is that when I take IQ tests and all that stuff,
I'm not up there very high,
which means I have to overcome that by working harder.
So I think that I've worked really hard at what I do.
I I probably have some natural gift for it, uh,
because it's always been something that's easier for me than other people.
So that would be one thing. Also, having really inspirational people in my life,
bill me, and I mentioned Tom DeMar, who's been a phenomenal,
absolutely incredible friend and supporter for so many years,
and such a creative guy that I've, uh,
learned a lot from and learned how to learn how to look. Um,
so y you know, my friends in the market have, uh, you know,
been just phenomenal friends and we've all shared ideas,
Vic Meer Hoffer share ideas about the markets that's helped. And the,
I, you know, I played football in college and the,
the idea there is you gotta persevere through pain.
And I've run a lot of marathons, 80 marathons and the same thing there.
And that's like trading.
You're gonna have pain if you're gonna trade and you better preframe yourself in
advance in a marathon mile 18, 20, 25, they're gonna be pretty ugly.
So when you get there, you don't collapse. Oh, yeah. Okay. I was,
I'm ready for this. And the same thing with trading.
You're gonna have some ugly days. See, you need to be emotionally,
intellectually ready for that.
Okay. So if, if you're a retail trader working a day job,
what steps would you take to start earning income?
? Ask my boss for her raise. I said.
. Sorry. As a trader, who do you income as a trader? Yeah.
Oh, oh, as a trader. Yeah. Well,
I wouldn't day trade because you can't, you can't be loyal to your boss.
You can't ride for the brand and day trade.
You're going to be so screwed up washing your little five minute stupid charts.
You're not gonna be a good employee. So don't day trade,
learn conditions that move markets, uh, learn, uh,
to be an end of the day trader. Uh,
learn to not bet so big that your emotions, uh,
get in the way of your job performance and, uh, go slow.
Everybody wants to jump in this thing and go fast.
They see all my students have won their trading championships and they win with
three, four, 500% gains. Or my actress daughter, Michelle Williams,
that took 10,000 to $110,000 when she's a 16 year old kid. And they go, oh,
I couldn't do that. And well, you know,
we really focused on those years and, and, um,
these massive gains are, are, um,
an unreal goal for most people. So you should have a realistic goal.
If you can do 30, 40% a year,
you're knocking it out of the park on this business.
If you can consistently do that.
Only when I think one or two people have done that,
that manage funds ever in the history of the world. So, you know,
have realistic goals.
And so, and so if they were gonna sort of go somewhere for learning, I mean,
what,
what would be your advice in this day and age for trying to find somebody or
something to learn from? What would you recommend?
Oh, I'd recommend that you don't do that. Uh, I'd recommend you look at charts,
you read books, go to the library as Ronald Reagan said, uh,
trust but verify.
A lot of these books are just who they say things that really aren't real,
but you can check it, you can look at your charts and go back and see, well,
is this really right or not?
And then try it in the future on paper to see if it works.
So I think a lot of it is a self-learning experience. Sure.
People like me have courses in classes and my students do pretty well at it,
but I tell all of them, you know, the more didactic, uh,
self-learn you are, the better you will be.
So I just say from what I can tell, and this is an old man's view,
there's all these four X people out there with,
they're all making millions of dollars in two days or whatever. I, I don't know.
I don't know that's really doing that in real time trading. So just be careful.
Uh, you know, that's all I'd say. And, and, and yeah,
from my perspective, um,
technical analysis is one of the elements. It's not the only element.
You really have to put three or four elements together.
There's no one be all end all answer to the market.
Okay. And can you explain to the listeners your preferred trading strategy?
So the ins and outs of how it works and why you chose this strategy over others?
Well, my preferred strategy
for the average person,
I really have one for stocks and one for commodity.
So let me talk about the commodity.
One is I use weekly charts and I don't have very many
indicators. I think most people have way too many indicators in their charts.
My percent are the same as stochastic, which is the same as Bollinger Band B,
which is the same as M A C D. They're all doing the same thing.
But just massaging numbers, the, the results are about the same.
So I have very few indicators in my charts.
What I have are indicators like the commitment of trader report, uh,
insider buying, insider selling, uh, commercials, real,
real money being going into the marketplace,
the seasonal factors in the market spreads, which are huge in commodities.
So those are fundamental considerations.
I look at those to get a market that I think is set up to move,
and I've got six or seven of those criteria. That's just a couple that I name.
Then once I find those criteria,
I then can turn to my technical work and I would look for my percent r to help
me identify an overbought oversold area.
I'd look for trend lines or a volatility stop, uh,
as an entry in the marketplace to say, oh yeah, the trend is not up,
which is what the condition suggests so I can now get into the marketplace.
That's really a thumbnail sketch of how I do what I do.
Okay, cool. Thanks for that. And, uh, if you had to split,
split your trading into technical versus fundamental, what would it look like?
I couldn't do one or the other.
And sorry, I mean, from a percentage point of view, what,
what would it look like? Like 80% technical, 20% fundamental?
Oh, um,
well,
I would say it's probably 80% fundamental and 20% technical
because it's all about finding the right market,
and then the right time comes from the technical. So it's like going hunting.
You kick up with a lot of bushes, looking for a birds or deer,
and you don't see anything.
So you're out in the field a lot until you get to pull the trigger and shoot or
like fishing. Same thing there. So it's probably, uh,
I don't think you've ever been asked that question before.
It's probably 80% what I would call fundamental.
Okay. And so if you would, uh,
I suppose a novice trader looking at for fundamentals,
what three things would you recommend they look for?
Commitment to trader report would be the first one,
and there's a lot of variations of that. I've written a book about it called,
uh, trading with the Insiders First book ever written about it. Um,
I'd look at seasonals.
I think seasonal factors are relatively consistent and are important in the
marketplace.
I would look at premiums or spreads to see if a market is developing a premium,
uh, in the natural resource. Commodities, uh,
it's incredibly important when markets go into a premium.
It means the commercials want the product and the market is extremely bullish
and you really wanna look for buys.
So those would be the the first three things that I would look for.
And seasonals what I've not heard of seasonals before. What,
how do you go about finding those?
Well, most, uh, charts, uh, now have seasonal indicators.
Another one of the first,
I was the first person to write a book about seasonal influences in commodity
and stock prices way back in 1973.
And basically what we do is we grind all the numbers together.
So we can tell you when, uh,
the spy in Australia usually rallies and declines. Uh, typically, uh,
the bond market in America starts to rally in about six or seven days from now.
There's been a strong seasonal influence for that.
We usually rallies this time of the year, things of that nature.
So by developing a seasonal indicator,
we know when the best time usually has been to, uh,
buy gold, but that doesn't mean it'll be this year.
We still have to get to that seasonal sweet spot and then look at the other
stuff. But it's a great advanced warning. Oh,
we better look for gold to buy now because usually year in and year out the last
25 years, it's rallied here, should do it this year,
but let's confirm it with some other tools.
Okay, cool. And so if they were looking at a, uh,
from talking from a technical perspective,
if a novice trader was looking at a price price chart,
what three things would you recommend they educate themselves on.
? Uh, well I don't look at price charts,
so I don't know what to tell you. Oh, I don't use candle,
I don't use candlesticks. No, the price is very deceptive. You look at price,
it'll go crazy. I look at the conditions that cause price to move.
The last thing I look at is price.
I wanna look at the thing below the market that makes the market move.
If you look at today and yesterday,
there are 28 relationships between yesterday's open, high, low, close,
and today's open, high, low close, 28. Maybe there's more, but that's,
I found that many.
So if you multiply that by five or six days or so much stuff for your mind to
look at that you got all wrapped up in it.
The only thing I look at charts for is to find signs of
high emotions when people's emotions are wildly
bullish. And then I wanna fade that wild bullishness. If you have a,
a market that's up on, give you an example, uh, crude oil yesterday.
You got the date on this so your people can take a look at that. Uh,
let me bring up on my chart here. Where's my crude oil chart?
Crude oil had what looked like it broke out really well yesterday. There it is.
And then, um, uh,
today it came right back down. Yeah, it broke it yesterday.
So we're looking at the, uh, whatever. Yesterday, uh,
the 19th day of October, 2016,
crude had new high closed broke out of congestion. Rains look really bullish.
I go, it should be, but if it fails the very next day,
well that's, that's a setup for yourself. There's a good example of it.
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Get the free training and download a free robot. Cool. We can jump on there and,
uh, have a look at that guys. We might even chuck it in the show notes. So, um,
let's move on to the next part of the show. So this is where I'm gonna talk, uh,
it's called the Technicals.
I'm gonna run through 12 quickfire questions to help the listeners out there
understand what it takes to become a successful trader.
So are you ready for us there, Larry?
Bring it on.
Righty ho.
So how long did it take you to go from trading newbie to consistently
profitable.
Uh, uh, consistently profitable, maybe six years.
What's your mental approach to trading and what special techniques do you use to
keep your emotions in check?
Don't bet too big. The bigger the bet, the bigger the emotions.
That's real simple. So most people are betting if they're getting emotional,
it's not because their mother didn't breastfeed 'em or they got spanked as a kid
or whatever, they probably should have been spanked.
The reason they're too emotional is the bet size is too big for their emotions.
So if you're getting overly emotional in the market, it's not you,
it's not your psychologically rearranged,
it's that your bet size is too big for emotions, the amount your risk.
So cut back your risk.
And quickly, what's your favorite entry setup?
Uh, I actually don't have a favorite. I have several. I think,
well, I know the markets don't always top and bottom the same way every time.
So you have to have, um, a a variety of techniques to get you in.
You have to have a bunch of arrows in your quiver.
So I don't think there's any one that I would say, oh, this is the be all end,
you know, this is like fighting. You have,
be protect yourself at all times and look for opportunities. So I,
I will use things like trend lines, though. I like those.
I'll use little patterns in the marketplace. I'll use momentum studies, um,
so, you know, use a seasonal, uh,
stuff as well. So I, I really have a variety of techniques,
um, because markets don't top and bottom the same way every time.
And what strategies do you use to exit or manage active trades?
To manage my active trades? Yeah. Uh, well,
I really don't pay much attention to them. I think most people, um,
get so close up to their trades that they dance around,
they get into out,
they get whatever they don't because they're watching every tick on the
marketplace. You know,
I'm so fortunate living here in the beautiful Virgin Islands.
I might go for swim in the morning. I'm not gonna look at the market as much.
The markets are gonna do what they're gonna do. Me looking at the market,
will that change what the market does? Nope, in fact will probably draw me in,
lure me in to make a wrong decision during the day. So, you know, I,
I place my stops, I have my targets and trades over, I'm gonna win,
lose or draw.
What's your recommended must-read trading book?
Must-read trading book, uh, the best trading book in the entire world.
There's no book better than this book is gonna be the book you write yourself,
the book where you record your daily observations about the market,
your thoughts before, where you're gonna buy or sell,
then your follow up commentary on the market, what happened,
why the trade worked, why it didn't work, why you could have bet more,
why you shouldn't have bet more. All those things.
That personal Diary of trading will make you a much better trader than the
reading the best 100 books ever written in the marketplace. That's.
Probably the best, that best answer I've had for this question.
? Yeah, that, that notwithstanding the best.
There's a couple of best books to one that I think is so, so, uh,
insightful is called Zurich, like the Town in Switzerland,
Zurich Axioms by Max Gunther.
And it's not gonna tell you to buy pork bellies tomorrow,
but just drip with wisdom and, uh, thinking about the markets.
I tried to buy the rights for it,
but somebody picked him up and the the book is now available,
he's out of print for quite a few years. Uh, but that's,
that's been certainly a marvelous book. Um, on money management.
You have to read Ralph Vince's books. Without a doubt.
He's the smartest guy I've ever met in my life. Um,
technical analysis tom stuff, Tom to mark stuff,
my stuff you can't probably get at the library and so you don't have to buy it.
Um, Jake Bernstein's got some good stuff out there. Uh,
you know, you gotta find a teacher that teaches the way you learn.
So that's important. If you go to a guy named Larry Pesto,
I've got an email from Larry today.
If you understand how he teaches, then you can learn his stuff quickly.
So whenever you come into a teacher, if you go, wow,
I don't quite understand this, it's probably not the material,
it's his teaching styles. You have to have a teacher where you go, oh, I got it.
I see what he's doing here. That's gonna help you be a better learner.
Cool. I'll hook those, uh, all those books up. We'll go and find a whole,
whole bunch of books from those, uh, authors. Check 'em in the show notes.
So guys, if you wanna jump on there, you can have a look and uh, and find those.
Um, or you can jump down to your library and see if you can find Larry's book.
Um,
so if there was one thing you would recommend any retail trader spend the next
month mastering, what would it be? Why and how could you go about mastering it?
Mastering something in trading?
Yeah. For over the next month.
What would be the one thing that you could recommend Mean?
Like a, like a trade? Like a trade or a trait to work on.
A trait to work on or a, uh, a specific aspect to trading. So, uh,
something that they could go away and, and work on mastering. Sure.
Humility.
Humility. Do you wanna expand on that one quickly?
The greatest traders that I know,
and I know guys that are worth billions and billions of dollars,
uh, if you were to meet them, you would be shocked at how, um,
under confident they are, how humbled they are,
how pleasant they are to be around the movies,
have the image of the Wolf of Wall Street where people shouting and yelling and
screaming. And by New York South Chicago have all that.
That's not the real world.
The real world of these guys that are such phenomenal traders is they,
their confidence level is not nearly as high as you would expect.
That's probably why they're such good traders because they don't get
overconfident. So, yeah, uh, even if you're not a trader,
I think if you can work on humility, I'm having troubles with that myself,
so I try to work on it. Um,
but I think humility makes for very good traders.
I heard a good quote the other day. Uh, be humble, be happy.
So if that's something you wanna, um, remind yourself of,
guys out there might help you with your humility.
So what trading related internet resource like bloomberg.com do you always use?
Uh, well I, I use trade station, um,
because I have a lot of my indicators in trade station.
All my commitment to trade report stuff is there. My true seasonal is there.
So I've got all my indicators in trade station. I can place my orders there.
This is an interesting question that used to be in the old days.
We had software companies that we could look at the markets with and then we had
brokers where we placed our orders. And when I grew up,
of course we called brokers with the orders. Uh,
now we have software and we have brokers, but we have some where the bro, uh,
broker and the software have come together. Mm-hmm.
So that's one stop shopping and I like that I have the software from them.
I placed my order and they're platform and it's an done deal.
So I really like one stop shopping in terms of the software that I use,
but I use trade station.
Uh, what's the biggest mistake most retail traders make.
To start trading? .
.
Uh, overconfidence, I guess. Um, you know,
thinking they can do it. Um, you have to be optimistic in this business,
but you can't be too optimistic, that's for sure. And thinking that charts move,
the markets charts don't move the markets conditions move the markets prices go
from A to B from say 50 to a hundred because of conditions they dance around.
That's the technical emotional part of the market. In other words,
technical stuff is really emotional stuff,
but the conditions cause prices to move. Charts don't cause prices to move.
Sure. Interesting. Uh,
and if you could leave our listeners with one piece of advice, what would it be?
Probably not listening to Larry Williams. I dunno how good my advice is.
You know, and a lot of,
a lot of people out there that done a lot better at this than me, um,
uh, just don't over trade. Uh, don't try to become a day trader.
They're, you know,
we've created a lot of really consistently successful traders, um,
end of the day traders who wait for conditions,
understand that charts don't move markets,
and look for trend changes and ride trends and keep your stops in there
and don't get paranoid. Don't think they're out to get you,
they don't even exist. And just be a disciplined traitor,
um, and have it a strategy that you've proven works. Uh,
and then don't get too emotional. Other words, watch your money management.
That's really kind of, uh, in a nutshell what I would suggest to anybody.
Okay. Cool. So the last question of the show.
We'd like you to give us the bones of a full trading strategy.
So the entry set up, stop loss, take profit targets, market timeframe,
something our listeners can try out at home. What have you got for us there,
Larry?
Oh boy. Uh,
my, my, uh,
automatic trading strategies are too complex, um,
to, uh, give you,
because they're pretty sophisticated.
So I'm dragging my feet here telling you how I can give you one. Um,
we.
Just need to sort of bone. So like, you don't need to go into all the detail,
just, uh, just a structure is, is fine.
Sure. The structure would be, I would, I'm, again,
I'm a conditional trader, okay?
So I'd like to find this condition in the marketplace a high level of open
interest.
And then I'm going to look at the commitment of Trader report and
see that that high level of open interest has been caused by the small
speculators and the large traders.
And while that open interest has been increasing,
the commercials have been selling the market.
Now that's a beautiful setup for a cell signal. So that's the condition.
Then the entry is going to be from a trend line or any arrow that you guys and
gals have in your own quiver.
Cool.
I think our guys can work out, have a look at that. Um, before we wrap up,
what's the best way for my listeners to get hold of you?
Uh, well our website is i really trade.com.
I think we might have some free stuff on there. I don't know. I'm, uh,
I'm gonna retire next year at 75.
So we're really started to pull back quite a bit and I'm looking for the
off-ramp, so I don't know how much stuff is there,
but you go to i really trade.com,
there might be some free lessons and stuff there and some commentary. Uh,
we do have a mailing list if you get on it. We send out interesting things. Uh,
we don't do promotion. We're not a, you know,
try to sell you stuff type of thing. Uh, we, if we see something interesting,
we'll let you know, but we're,
you don't have to be afraid we're gonna spam you or anything like that,
that doesn't happen. We trade both my wife,
my wife's has been a incredibly successful trader. So we, we'd really trade.
Alright folks, then you have an interview done and dusted. Now, I,
I thought I completely screwed the interview up,
but Larry managed to pull it together and give some fantastic answers.
And I'm actually gonna try and reach out and see if I can get a sun on, uh,
and some of those guests he mentioned in the books.
And what we'll do is we'll link up the books in the show notes. Again, uh,
folks do remember other things going on here at Trading Out.
We've got those live streams for you. We've got the Fidel Crest challenge.
You can enter that. Uh,
we've got Derek Vanda Linda's video coming up later this week.
We've got the Black Bull Markets Trading View Pro offer.
And do also remember to check out those robot links.
So there's all sorts of stuff.
I think six or seven $1 trial all the way through to building your own bots. Uh,
it's all over there on Trana links under the video or in the podcast
description. All right, that's enough from me.
Thank you for listening and watching.
We'll have a fantastic brand new interview for you next week, so stay tuned.