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Alexander:
I see you at "dream finance" view Larry's work with cynicism.
I have to say that after I read his book "Long Term Secrets to Short Term Trading" I saw a LOT of holes in his strategies. For one, a lot of critical things were missing in some strategies in order to backtest to try to duplicate his results (he never furnishes .ela's or .els's which would make it all too easy).
However, I gotta hand it to the guy he was the first I am aware of that identified the relationship between the bonds and the S&P's (example would be his jaws of death trade) and another fairly reliable trade is his Oops trade.
While a lot of traders feel they have to shovel through his B.S. and hype - I have found some things he has pointed out first (among a large field of copycats) which are true, and can make you a lot of money.
Your analogy of countertrend brakeout is not quite accurate, his JOD strategy is more like finding a "topping" action, with the bonds showing you the way early --- and when using daily bonds to first identify the pattern it often gives more "punch" and/or more duration to the selloff.
While we can all debate Larry's marketing side, you gotta give the guy some credit for his 2 or more decades of research, plus if you really are a serious detractor and want to make a statement I suggest you should consider trading against him as per the challenge on his website. If you got something valuable or constructive to contribute then share it with us all -- if not, no need to comment.
By the way, I came up with the stop and the 2 time frames, but regardless of me giving credit to Larry, I was really just looking for other traders to take a long, hard look at the phenomena and perhaps come up with a better way to trade it. I don't vare who discovered it or gave it a Hollywood name, I just want collaborate with others to fine tune it.
Frank
On Tue, 25 Jun 2002 12:23:54 -0700 (PDT)
Alexander <alexander@xxxxxxxxxxxxxxxxx> wrote:
> Oh boy! You asked. Okay. Here is an insight.
>
> This is why Larry Williams is not just a great trader but also a great
> educator! He takes something that has been around since the tulip days, fading
> a countertrend breakout (or as someone famous once said, "When the ducks quack,
> feed them"). He then gives it a Hollywood blockbuster name, "Jaws of Death" and
> a trustworthy Walter Cronkite face, bonds with two time periods. We buy the
> movie tickets, cubic yard of popcorn and gallon soda. But we're still not quite
> sure why we feel constipated, bloated and broke when the final credits run.
>
> That's because Larry has the steel guts to act the part, selling when everyone
> else is buying and has a stop even larger than Saddam Hussein's view of
> himself. I can only rent the video in amazement.
>
> Good luck Frank! I sincerely hope that we will all discover our own Larry's
> discipline, success, panache and outrageous flair. Till then, pass the popcorn
> my friend...
>
> alexander the gassy
>
>
>
>
> Frank Richardson wrote:
> 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 1-18-028:20 on 2-14-0211:20 on 3-05-029:20 on 4-18-0210:20 or 11:20 on
> 5-09-029:20 on 6-06-02day open (sucker trap) or 1:20 0n 6-18-02I’m short at
> 12:20 on 6-25-02 based on this strategyAnybody care to research this strategy
> and provide some more insight to this o-list ? Frank
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