Trading Tenets That Span Five Decades

Focus: STRATEGIES

Larry Williams Image Larry Williams President, ireallytrade.com

The skills that have guided Larry Williams in his 50-year career are ones even rookies can copy, he says, sharing easy-to-follow advice for maintaining simplicity and sound money management.

Today, we get wisdom from a trader who’s been in the markets for 50 years.  Larry Williams will tell us what he’s learned, and I know we have only a few minutes, so you’ll have to really encapsulate it.

Well, the first thing would be that the markets can be predicted and they can be forecasted.  They’re not just total randomness.  If they were total randomness, we should walk away from the market.  So they can be predicted.  That’s important. 

The really critical thing is money management.  I don’t care if you have a system or don’t have a system. If you don’t have money management, you’re going to lose most all of your money.  So to me, money management is absolutely a critical ingredient to what I’ve learned in the market over the last 50 years.

What were some of the hardest lessons you learned?  The most painful? 

To stop being stupid!  To get out of losing trades in a hurry.  That’s so hard to learn, because you want to hold onto it and you don’t want to get hurt, but the more you hold onto it, the more you get hurt.  So you have to learn to get out of your losing trades in a hurry, and stay with your winning trades.

And I think also to realize that there are so many relationships in this business.