Optionetics Articles
INTERVIEW CENTRAL: Larry Williams
By Jeff Neal, Optionetics.com
8/15/2003 4:00:00 PM
Larry Williams is a graduate of the University of Oregon School of Journalism,
and over the years has been awarded several honors within the trading community, including the first Omega Lifetime Achievement award, Futures Magazine, "Doctor of Futures" and was elected by his peers to the board of directors of the National Futures Association. His trading success is indeed legendary
As a long-time author he has just released his new book, The Right Stock At The Right Time: Prospering in the Coming Good Years. It is always fun to Larry, especially about trading, and this interview certainly was no exception
Optionetics: How did you first become interested in trading?
Larry: A friend pointed out to me the most active list on the NYSE one day. I asked what it meant that it was up $1, and he said that means if you bought it yesterday you'd have made $100. That was in 1962âthat was a lot of money and Iâve been hooked since.
Optionetics: What gave you the idea and motivation to create your new book about the stock market?
Larry: Old age was the motivator, I guess. This book is about longer term investing, a way of making sure I do better than bank accounts with as little risk as possible. I wanted something in addition to short term trading, and something I can run a hedge fund with that is tight and mechanical.
Optionetics: What are the most important things to keep in mind as a trader?
Larry: Cut your losses short and let your profits run. It sounds easy, but it is not. Also, that fundamentals do matter.
Optionetics: Psychologically how do you treat losses and account drawdown?
Larry: Itâs just the business we are in. I pre-frame myself knowing I will have losses and never ever bet the bank roll on one trade and only bet what you can emotionally lose.
Optionetics: What do you like best about teaching other traders about the various trading systems you have developed over the years?
Larry: To see them get so turned on about the markets and go out and make so much money, as well as helping them start other careers, has been very rewarding.
Optionetics: Given the hundreds of technical indicators out there what would you suggest new technicians do to prevent "analysis paralysis" or in other words information overload?
Larry: Avoid most like the plague. They all say the same thing. Just use one or two, which will not overload.
Optionetics: What is your most memorable trade?
Larry: The one I am in now. I have very little recollection of the past. I have a past but it does not have me.
Optionetics: What are some of your favorite technical tools that you utilize in your trading?
Larry: Commercial buying and selling, which is a valuation tool I have used to measure the absolute value of any commodity. Also, using the bonds to trade the S&P and the extensive use of patterns.
Optionetics: Do you prefer futures trading to options trading and what are some of your favorite markets to trade?
Larry: I do prefer futures because thatâs what I cut my teeth on. Not as smart as George [Optionetics founder George Fontanills] to figure out all the angles. I just work on up or down.
Optionetics: What advice do you have for dealing with the emotional pitfalls inherent in trading?
Larry: Your emotions are a reflection of the size of your wager. If you are over emotional you are putting up too much. It is not that you need counseling or that your mother fed you vinegar or any of that stuff.
Optionetics: What mistakes do most people make in the markets?
Larry: Hold onto losers; get out of winners and over trade.
Optionetics: You obviously have done a lot of work creating profitable trading systems, are there any new systems you plan to unveil in future seminars?
Larry: I have a new indicator called âBlast Offâ that is truly a new indicator unlike anything out there. It points out when there will be up or down blast offs in the market and is not based on time but rather market structure.
Optionetics: What are some of the misconceptions many individuals have concerning trading for a living?
Larry: Thatâs easy. That they can trade every day and make money. Not all days are created equal.
Optionetics: What kind of impact do you see the neural network technologies having on traders? Also, what kind of value do they have for traders?
Larry: Well, since I dropped about $50,000 using a neural network, I donât think they have a future, based on their past.
Optionetics: How do you use options and how have you integrated them into your own trading?
Larry: I like to write options when the advisors are real bullish and price is in a downtrend.
Optionetics: What is your current take of where the stock market is likely to go over the next 6 to 12 months and why?
Larry: Down until a late October early November low and then up into April. After that we will have to see. Why? Because thatâs the typical pattern of pre- and election years.
Thanks, Larry, as one of the more legendary traders in the business, we really appreciate you taking the time to share your experiences and trading insights with our Optionetics reading audience. His straight shooting and down to earth style is truly refreshing, especially given his enormous stature in the trading profession.
Jeff Neal
Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
jeff@optionetics.com
. With thanks in advance!
