Many technical indicators are based on one thing, price, and provide redundant readings that say the same thing. With his many years of trading experience, Larry Williams has produced unique indicators that reveal trade setups based on market conditions, the starting point for successful trading. His work with TradeShark developers makes their application simple and easy.
My guest today is Larry Williams a world famous trader dating back over a half a century, well known in the trading world and a very successful trader. Larry, let’s talk about your connection to TradeShark first of all. How did that come about?
Well, I’m always looking for software that I can use. I want to know exactly what’s the newest state of art products that are out there because people that are following me are always saying, what should I use? How about this, how about that. So I watch things to see what new products are, of course I know the Mendelsohn family for most of my 50 years I suppose, Lane of course and prior to that his Father. So just because people want to know what’s new, I need to know that. I want to be topical, it’s so easy for a guy my age to just fall asleep and forget about what’s happening right now. So really for the interest point of what’s going on in this business right here right now clearly, it’s TradeShark.
Recently you’ve released some private stock indicators not available anywhere else. Why did you decide to do that now?
Well, for a couple reasons, first of all my association with the Mendelsohn family has spawned a couple generations now, that’s part of it, we’ve know each other a long time so I have confidence and trust and also I think it opens up some opportunities for people that weren’t using my indicators to be able to see some of my indicators. Typically my people are maybe on another software, so it was good to let other people see Larry Williams’ work because I’m entering my golden years, it’s nice to get new people to see what’s going on. But more importantly an association where people can be helped with these indicators. Just to have an indicator really isn’t of any value. If somebody doesn’t teach you how to use the indicator it’s not going to help, you’re probably in trouble, so to be able to have that, an association where people can help my people and their people with the way I look and the way I think about the markets, wow that’s great!
That’s an important point you bring up about there are a lot of indicators out there. How are yours different? How do they work in TradeShark?
Let’s first talk about indicators in general. Most indicators I think are redundant. It’s nice to have redundancy if an airplane pilot, if you lose one fuselage link you want another and another and another, you want back up. But trader’s, I look at their charts, they have fifteen, twenty indicators and they are really all saying the same thing. There an oscillator in one form or another. My approach to trading is unique and that each indicator serves a different purpose. One may be measure professional accumulation, one to measure what the public is doing, one to measure momentum in the market, one to measure what the commitment of trade report is doing, what the commercials are doing. So each indicator stands on its own, there nor redundant there’s not one more indicator. Each indicator, whether its mine or anyone else’s on your charts need to have a specific purpose and each of mine fills that. Oh, this is going to show us accumulation, this is going to show us momentum, this is going to show up trend. So, it’s the synthesis of all these that allows up to be more successful traders.
So talk about how I know when to use which indicator, are they running all of them all the time and they will give signals? How does that work?
Well the way I look at indicators is a little unique and that to me indicators set up a condition in a market place. So I’m much more concerned first about the setup, because you know it came up the price crosses the 10 day moving average in a bear market it’s not as bullish as the prices cross above the 10 day moving average in a bull market. So it’s all about the setup. Does accumulation cover the market, well you can see that in TradeShark. Are professionals buying the market, we can see that in TradeShark. That’s the setup, then you can come into the entry with my tools or tools they have in TradeShark, or maybe the trader’s own tools, but initially it’s let’s find a unique conditional market for when these conditions exist most of the time there’s been a big up move or a big down move. I’m not a technical trader really Tim, I’m a conditional trader. I’m looking for conditions in the marketplace, I find the condition then I can home in, focus my attention at this market at this particular time to be long or be short.
If a trader is just starting out or whether they got years of experience doing this, do they each have, do these indicators have an advantage for each one of those types of groups?
Yeah, there’s advantages and disadvantages to both actually. The disadvantage for somebody that’s been trading for a long time, they probably have learned a lot of bad habits. Those are the people who I see have thirty five indicators on their chart and they are all oscillators in one form or another. They have my Percent R they have Bollinger percent B they have stcholastics they have CCI index. There all the same thing, there redundant, so they’re too much into a grove and the door I opened up, as we’ve talked about is to bring in tools that really matter, that show accumulation of the market place, show unique patterns of the market place, show seasonality in the market place. Those things are real causes that drive prices. A new trader coming into the market has a real big problem, what do I do, there’s this, there’s that. Where do I go, it’s like ahhh.. There’s too much stuff. I’m not the only person that has good indicators, there’s a lot of people that are real successful, that have built good tools a lot of my friends have. You need to find tools that fit your trading style, maybe mine, maybe somebody else’s. But, those indicators and this is a really critical point, they each need to serve a purpose as opposed to just throw a bunch of indicators that you read about in a book.
And how important is it to take every signal rather than choosing which ones you’re going to decide to take with those indicators
Well, that’s what I think my indicators do best in TradeShark is they focus all of our attention on the few times we want to take signals. So I actually don’t trade as often as people think I do. I don’t want to trade. Trading is risky, you’re going to lose money trading. A lot of people lost a lot of money trading, so I want to trade less not more often. So I want to find these unique situations which I can with TradeShark. This market’s set up to rally, the odds are way in my favor now for prices to go up. That’s the purpose of my indicators is to focus our attention on these unique opportunities in the market opposed to “hey, there’s another buy signal”, “one line crossed another line”, big deal. It has to be said in the context of what the market’s doing, what’s the setting on the stage. Is this the 3rd scene where the person is going to get murdered, are we going to find out who did it, or is this the first scene where we don’t know where this play is going. My indicators say ok, there’s going to be a murder on stage right now, that’s the purpose of them.
Alright and lastly, because this is available exclusively in TradeShark, there team has been specially trained by you how to use these indicators. Talk about how it helps the trader.
Well, let’s talk about how it helps me. I don’t have to have people calling me and emailing me and since I’m phasing into retirement the users of TradeShark will have someone who will carry this on and will work with them. They have been instructed, they understand the indicators, they’ll know how to work with them, explain them, which is great for me because I just don’t have the time for it. I get 300-400 email a day, I just cannot handle it anymore. So to have somebody who can sit down with serious traders and say, this is what Larry thinks, this is what Larry would say, well that’s a great help to me, it takes a lot of pressure off me and it helps carry on my work to other people who will become successful traders.
Yeah, I would imagine that just getting an indicator is great, but having that support behind it would to be able to really learn how it’s used and to best make money with it that’s got to be critical too.
Well, here’s the coping saw, what are you going to cut with it, 2x4? Piece of copper? Here's a ballpeen hammer, it’s a hammer, but are we going to tear down a building with it? What are we going to do with it? So, just to have a tool, which is really all that my indicators are, they’re tools. To have a tool is helpful but unless you know how to use the tool. For you to learn how to use it yourself, that may take 3 or 4 years. So, you can like suppress the time frame, learn it right here right now. Become a good trader.
Larry, thanks for your time today. My pleasure. Thanks Tim.
We’ve been talking with Larry Williams, world class trader and author of the inclusive indicators in TradeShark.