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Larry Williams -- Jaws of Death Strategy
Catchy name – good strategy for swing traders. You get at least one per month, so far looks like 3 of these trades in June. Essentially you are working off bond futures behaving in reverse of S&P futures I’ve gotten some bits and pieces on this strategy from Larry’s solicitations and started trying to piece it together. It appears that you chart the daily bond futures (USU2) – looking for spots where the price is peaking and then a downturn in the bonds where price closes below the EMA20 (it can take 1 or 2 down daily bars).
Next you move to say a 60 min chart of the bond futures, using a trendline to locate a bond futures breakout (close of the bar !) to the upside out of a downward sloping trendline. At that breakout point sell and take like a 12 point protective stop. I can sometimes take as long as till the end of the next day or even the following open after that for price to move in your favor. I would move a protective stop to breakeven after 5 or 10 pt. gain. Often times you get like 2 or 3 down days off this entry. Many times establishing EOD short positions before the breakout confirmation results in better gains, but then I believe you subject yourself to more risk for without the breakout confirmation a higher % of trades fail.
Look at what you would have gained by shorts at:
10:20 CST on 1-18-02
8:20 on 2-14-02
11:20 on 3-05-02
9:20 on 4-18-02
10:20 or 11:20 on 5-09-02
9:20 on 6-06-02
day open (sucker trap) or 1:20 0n 6-18-02
I’m short at 12:20 on 6-25-02 based on this strategy
Anybody care to research this strategy and provide some more insight to this o-list ?
Frank
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