Feb

15

I am glad to consider Larry Williams as a friend, so it is was with great enjoyment that I read his recent book. One of the great pleasures and benefits of knowing the Specs is being able to meet and discuss market ideas with the best.

The commitments of traders report provides good additional information to speculators in the futures markets. Larry presents many good ideas for quantitative specs to test, and even hints at some of the many tricks he has up his sleeve, without giving away the family jewels. The book's use of charts is aimed at the less quantitatively inclined beginner, and while some of the chart-based reasoning suffers from chartism's typical retrospective bias, Larry does have a chapter on quantitative tests, although limited to win/loss ratios and amount of wins, and briefly discusses down days in S&P. However, any astute spec can test the many good ideas rigorously and develop his own more precise methods.

Ideas for new trades can come from any source, as the Specs have shown us, and new ideas are necessary to keep an edge in a competitive market. Rather than try to find entries base on comparing chartpoints and indicators which is non predictive, better to use the ideas and data to refine the entries. It is in this spirit that the book is helpful to a speculator. It's a fun an quick read, in Larry's breezy and folksy style.

In many ways the most basic and important call in the market is if it is going up or down. Seems so deceptively simple, but the paths it takes throw one off the track. Good information, just a bit more than the next guy, is what it takes to head in the right direction, and the COT report may give an edge.


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  1. Tom Tarr on February 17, 2007 12:12 pm

    With over 40 years of experience and a tireless commitment to finding edges in the markets, I am always interested in listening to what Larry has and then deciding whether I agree with him or not. It is excellent book about whose on what side of the trade and which side to bet with and when; however in the COT reports there are deceptions in the data as some large speculators can be classified as commercials. Sounds a little like “Turf Betin”; thus you have to use other indicators to help in the selection of trades. Larry addresses how to use other indicators and his approach to trading in the commodity markets in a well thought out and unique way. Further back testing should be done on the strategies over a grouping of markets in lieu of hand picked charts and time frames outlined in the book. He also debunks, through back testing, many of the popular TA methods used today in trading including Fib levels.

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