Larry Williams on Developing Your Own Trading Style

I moved to a new city recently so the past few weeks have been hectic. In the process of removing myself from one place and adapting to a new one I have been thinking about the comfort of familiarity and the issue of stagnation. In my old surroundings everything felt familiar and I had my routines. Now everything is new and there are no routines. Every day I am forced to make decisions about my lifestyle which has been a challenging and rewarding process.

Trading has similar characteristics. New traders often want to emulate what they see others doing and experienced traders can easily get into routines or habits that may not be ideal. The path to success for new and old traders alike is paved by developing your own trading style and continuously checking that you are on the right path.

In this video, Larry Williams gives advice for developing your personal trading style. It is aimed at new traders but there are a lot of valuable reminders for everyone. By the way, Larry Williams is a champion futures trader and famous for developing market indicators like Williams %R.

Key Questions for a trader to ask themselves:

1. How do you make your mind up? (Quick vs Slow. Suitability for daytrading vs longer term)
2. What is your athletic background? (What are your natural response mechanisms?)
3. How do you stick to decisions once you make them?
4. How risky are you?
5. Why are you trading? (If you said "to make money" you are in a tiny minority)
6. Does any of this conflict with your lifestyle? (How much time can you really commit to trading?)

A few notes from the video:

• If you are unwilling to take on risk this is not for you.
• 90% of people will lose their money.
• Paper trading differs from real trading because of the lack of risk exposure.
• If you can sleep soundly at night you aren't risking enough.
• Figure out what works best for your psyche.
• Making money should be your first objective! (vs. thrill-seeking or proving how smart you are)
• You will drift away from the making money objective, so you need to consciously re-focus on it.
• "Most people don't deal with physical realities very well."

One point that resonated with me was the importance of self assessment with the goal of finding contradictions within one's personality. Problems arise when a trader has an inner contradiction. For example, a big risk taker who is also a fast decision maker might naturally gravitate to day-trading with very wide stops. This won't work. Self assessment is necessary so the trader can develop a game-plan that fits their psyche and physical reality.

Don't do this unless you want to do it to make money. - Larry Williams

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