|
PureBytes Links
Trading Reference Links
|
well, another technical cult guru bits the big weenie :)) i guess that
explains why miles dunbar is publishing commodity timing these days.
whatever.
ya gotta love it!!!
TJ
at one time, i thought all this technical stuff meant something. i no
longer think it means much. -- larry williams
Chicago-July 27-FWN--Larry Williams has evolved from a technical trader
in the 1960s into one who now relies heavily upon fundamentals and
conditions. "At one time, I thought all this technical stuff meant
something," he said. "I no longer think it means much. "Books of that
era (the 1960s) professed that charts answered everything. I don't
really believe that anymore. I think what answers everything is
fundamentals. Things happen for a reason. "Before taking any trade, I
need to have something that has set it up on a fundamental
basis--whether it's a short- term trade or a long-term trade. Then I'll
bring in the technical aspect. "I am what I call a `conditional
trader.' I've got to have conditions. The conditions are more important
than some whirly-gig oscillator or a trendline on a chart. "I think
those things explain the past. But they don't explain the future."
Williams is a highly regarded trader who focuses mainly on futures
markets, although he will occasionally trade an individual stock. He
lives by Rancho Santa Fe, Calif., near San Diego. He has written
several books, including "How I Made $1 Million Trading Commodities
Last Year," which was about one of his trading years in the early
1970s. He has had two other $1 million dollar years. In 1987, he won
the Robins World Cup Trading Championship by turning $10,000 in to $1.1
million. And in 1997, he turned $50,000 into more than $1 million. Some
of his other books include "How Seasonal Factors Influence Commodity
Prices" and two volumes of "Definitive Guide to Commodity Trading." His
most recent book is "Long-Term Secrets to Short-Term Trading." Williams
described his shift from a technical trader to a fundamental/conditions
trader as a gradual learning process. The conditions he monitors range
from fresh news to historical tendencies. "It has to deal with
cause-and-effect relationships in the marketplace," he said. "Those
things are controlling. Charts don't move the markets. Markets move the
charts. And I need to find out what those things are that are moving
the markets. "Also, I prefer to have not just one (condition). I'd like
to have a couple. I'd like to have a loaded deck." Some of the data he
tracks include the Commitments of Traders reports that come out every
other Friday, investor sentiment indexes, interest rates, and
relationships of markets to other markets. He added that there are
certain times of the year when the Federal Reserve has tended to add
money to the economy. Once Williams determines whether a market's
conditions are bullish or bearish, he might use technical factors for
specific entry into a market and placement of stops. But, he added, "I
think too many people have seen technicals as the be-all, end-all, and
they don't see it as one, little tiny element of the puzzle." Some
traders tend to favor technical analysis because they say it's hard to
ascertain whether a fundamental condition is fully or partially
factored into a market. "I understand their point," said Williams. Yet,
he maintained that fundamentals cannot be ignored, either. "The
fundamentals are not precise as a timing technique. But a technical buy
signal in a fundamental bull market has a totally different impact than
a technical buy signal in a fundamental bear market. You have to go
back and check the premise. "A buy signal is not always a (reliable)
buy signal. It depends on the conditions. If the stage is set for a
rally, great, the buy signal is going to work. But if it isn't, the buy
signal isn't going to work very well." Williams' average trade tends to
last from three to five days. His favorite futures markets are the
bonds and S&P 500 futures index. "They have lots of movement, and I
need that as a short-term trader," he said. "They are very
fundamentally oriented. There are lots of cause-and-effect things in
the bond market and stock market, and I like to have that advantage
|