Long-Term Secrets to Short-Term Trading

LARRY R. WILLIAMS has been trading for almost fifty years and is one of the most highly regarded short-term traders in the world. Larry has taught thousands to trade, won several trading championships, and since 1970 has been writing bestselling books based on his technical indicator, Williams %R, developed in 1966 and still published daily in major financial newspapers and on finance and investing sites. Between trading, researching, and developing trading tools, he ran twice for the U.S. Senate, was a board member of the National Futures Association, and has received numerous awards, including Futures magazine’s first Doctor of Futures Award, the Omega Research Lifetime Achievement Award, and Traders International 2005 Trader of the Year. The Mayor of San Diego declared October 6th, 2002 “Larry Williams’ Day.” Larry has been featured on CNBC and Fox News, and has been interviewed and quoted in more publications than he can keep track of.

• Acknowledgments xiIntroduction You Are Already a Commodity Trader 1My Most Important Market Belief 4The Beginning of My Career as a Speculator 5The Ride of a Lifetime 8Chapter 1 Making Order Out of Short-Term Chaos 9How I Learned about the Market 9Charting the Market 11The Nonrandom Market 13Understanding Market Structure 15Market Structure Will Never Change 21Short-Sell Pattern 27Target Time and Trailing Stops 28Recap 32Chapter 2 It’s a Question of Price and Time 33All You Will Ever Need to Know about Cycles 33The Natural Cycle of Range Change 39Where the Trend Is with You—The Second Power-Play Price Pattern 50Recap 54Chapter 3 The Real Secret to Short-Term Trading 59It’s All about Time 61Bankrolling Hotshot Traders 62Proving the Point 65How to Make the Most Money 68Recap 70Chapter 4 Volatility Breakouts—The Momentum Breakthrough 71Simple Daily Range Breakouts 76A Look at Volatility in the S&P 500 80Separating Buyers from Sellers to Find Volatility Using Market Swings 95Results 96One Step Further 97Recap 98Chapter 5 The Theory of Short-Term Trading 99What Is Wrong about the Information Age 103E H Harriman’s Rule of Making Millions 104Recap 105Chapter 6 Getting Closer to the Truth 107The Market Is Not a Coin Flip: Random Walk or Cootner versus Cohen (Cohen Wins) 108Gold TDOM Study 117Bond TDOM Study 118Monthly Road Maps 120Recap 123Chapter 7 Patterns to Profit 125The Common Element 126The Questions to Ask 131My Smash Day Patterns 132How to Use Smash Day Patterns 136Specialists’ Trap 137A Vital Note—This Works on Shorter Time Frames as Well 141Oops! This Is Not a Mistake 145S&P Oops! Trading 151Recap 152Chapter 8 Separating the Buyers from the Sellers 153Greatest Swing Value 155Stock Index Trading with Greatest Swing Value 156Some Pointers 160Recap 161Chapter 9 Short-Term Trading from a Quote Screen 163How a Quote-Screen Trader Makes Money 165Swing Points as Trend Change Indication 166The Three-Bar High/Low System 167A New Indicator for Short-Term Traders: Willspread 170Willspread and the S&P 500 Stock Index 174Recap 180Chapter 10 Special Short-Term Situations 181Month-End Trading in Stock Indexes 181Target Months 184Making It Better 184Month-End Trading in the Bond Market 186Getting Specific 187Better and Better 188A Time to Sell 191Recap 193Chapter 11 When to Get Out of Your Trades 195Chapter 12 Thoughts on the Business of Speculation 197Exits before Entries 197What Speculation Is All About 200It’s about Time 201Essential Points about Speculation 202Recap 215Chapter 13 Money Management—The Keys to the Kingdom 217Most Traders Use a Hit-and-Miss Approach 218Approaches to Money Management—One Is Right for You 218The Good, the Bad, and the Ugly of Money Management 219Looking in New Directions, Drawdown as an Asset 222Back to Ralph: 2011 Money Management Breakthrough 228The Kelly Ratio Mirage 229Recap 233Chapter 14 From Kennedy to Obama, Thoughts from 50 Years of Trading 235Trading and Collecting Honey 236Low-Hanging Fruit 237Look before You Leap 238Remember the Game Called Pick Up Sticks 238And It Can Get Worse by Far    239Lock-Up Time 240Enough on Greed    Now Let’s Deal with Fear 241Running, Trading, and Losing 242Doing the Wrong Thing    It’s So Easy, Isn’t It? 242It’s Not the Trade, It’s the Battle 243The Art of Fly-Fishing Revisited 244Fear and Greed, Looking Them in the Face Again 245Why Most Traders Lose Most of the Time 246A Review of Losing Trades Showed That 247The Number One Reason We Lose Money Trading 247The Most Important Trading Belief You Have 248The Worst Dog I Ever Had Cost Me the Most 249Athletics Are Such a Parallel to Trading 251What Causes Stock and Commodity Market Trends 251How to Measure the Public versus the Pros 253Folks, It Just Can’t Be Done 254The Rush of Trading 255Beating Them to the Punch 257It’s Just Over My Head 259I Looked Fear and Greed in the Face 259The Show Must Go On 260Broken Noses, Cauliflower Ears, and Bad Trades 261Learning How to Lose Money 262Hillary, High Hopes, and Heartaches 263Nervous Nellies—Heaven Bound 264Secrets of System Developing and Trading 265The Difference between Winners and Losers 266Recap 268Chapter 15 Just What Does Make the Stock Market Rally? 269Logic 101 270These Words Are My Bond 270A Look at Data A and Data B 270Let’s Break Some Bad Habits 273How to Break Bad Habits 273Comments on Setting Stops—Dollar Loss and Unpredictability 275An Overview of How I Trade 278My Trading Strategy How It Works 282Recap 285Chapter 16 Hard Facts about a Very Hard Game to Win 287It Is Just Like Life 289Maybe You Are Not Cut Out for This 292You Are in a Tough Spot 293But There’s a Little Bit More 294In Closing 295Index 297