Trades That Have Worked for 50 Years


Larry Williams Image Larry Williams President,

Reflecting on his 50 years trading the markets, Larry Williams can still identify certain market-moving forces that remain just as constant and in play even today.

My special guest today is Larry Williams, and Larry, you’ve been trading for over 50 years now. I wonder if you could share some of the things that you’re trying to get across to new traders to get them on the right path, and maybe some of the key takeaway points.

Sure, I think the most significant thing in my work is what I’m teaching people now is exactly what I was doing in 1970. The conditions that cause markets to move are the same, and I think that’s really significant.

The markets may have changed, but it’s conditions that move markets. I don’t think charts move markets. Those fundamental conditions are the same now as they were ten or twenty or thirty years ago.

It’s all about conditions. Then bring the technical stuff in on top of when I’ve found a market that’s set up to rally or decline.

So by conditions, you mean the combination of fundamental supply and demand, economics—what exactly are you referring to?

Well, those would be part of them. We have developed an index that would allow me to see if a commodity is undervalued or overvalued, and I would look at something like the Commitment of Traders (COT) report, which I pioneered way back in the mid-60s.

See related: Find Useful Signals in the COT Report

When the vast majority of commercial traders—the big financial interest—is long or short a market, it’s going to have an influence on the market.

There’s a good example right now: the Goldman roll. Goldman Sachs (GS) rolls forward contracts every month for the long-only funds.