Feb

15

I am glad to consider Larry Williams as a friend, so it is was with great enjoyment that I read his recent book. One of the great pleasures and benefits of knowing the Specs is being able to meet and discuss market ideas with the best.

The commitments of traders report provides good additional information to speculators in the futures markets. Larry presents many good ideas for quantitative specs to test, and even hints at some of the many tricks he has up his sleeve, without giving away the family jewels. The book's use of charts is aimed at the less quantitatively inclined beginner, and while some of the chart-based reasoning suffers from chartism's typical retrospective bias, Larry does have a chapter on quantitative tests, although limited to win/loss ratios and amount of wins, and briefly discusses down days in S&P. However, any astute spec can test the many good ideas rigorously and develop his own more precise methods.

Ideas for new trades can come from any source, as the Specs have shown us, and new ideas are necessary to keep an edge in a competitive market. Rather than try to find entries base on comparing chartpoints and indicators which is non predictive, better to use the ideas and data to refine the entries. It is in this spirit that the book is helpful to a speculator. It's a fun an quick read, in Larry's breezy and folksy style.

In many ways the most basic and important call in the market is if it is going up or down. Seems so deceptively simple, but the paths it takes throw one off the track. Good information, just a bit more than the next guy, is what it takes to head in the right direction, and the COT report may give an edge.


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