Slow Trader

Tag: Larry Williams

  • Is the medium-term market prediction a coin toss?

    There are any number of ways to tell us what the market is going to do next.

    1. We could consider market cycles. This is a big favourite of Larry Williams. And within reasonable tolerances he does seem to get it right.
    2. We could use fundamentals. Which is looking at the books to determine a companies economic well-being.
    3. We could use technical analysis. Which doesn’t care one bit about the ‘value’ of a company but uses charts to show predictable patterns.
    4. We could listen to the, more often than not, short-term media comments, and panic!

    We all favour one method or another. I’ve tried all of them, but I do stay well away these days from number 4.

    The current probability of the market going significantly up or down, over the medium term, is 50/50. That is the same as betting on a coin toss. I wouldn’t do it.

    (….okay, I do take trades that have no better than a 40/60 probability of success. But that is because the reward to risk is so good. And if we consistently play the 40/60 rules correctly, and let them run, when we catch one…. voilà.)

    As a trading style, I favour the very short-term stuff, it’s based on technical analysis, and it is how I manage the slow trader fund. I also favour the very long stuff (30-years plus) based primarily on fundamentals with the buy timing helped by technical analysis.

    Everything in between, I leave to the coin tosses.

  • 2016 forecast

    Larry Williams provides an annual stock market forecast – it’s considered one of the most reliable.

    My own trading, as I read charts bar-by-bar, does not require a forecast. However, I’ve used Larry’s forecasts in the past. Larry’s comment for 2016 starts with:

    ….”It looks like it’s begun; a 2016 bear market. Hold on though… my cycles studies clearly point to a decline this year that will punish long-term investors – but NOT right now. In fact cycles say we have a spirited rally not far away; then a decline that will hurt the bulls and take cash away from investors and traders.”

    It’s because of such uncertainty that I now stay away from the mid-term investing timeframes, that is trades/investments held for a few months to a few years. I focus on short-term stuff and, occasionally, out to a few weeks.

    The only other investment timeframe, in my view, is 30 years or more via great fundamentals.

    Here’s Larry’s forecast for the EUR for 2016. Larry provides this one free. The full report is $195.

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