Larry Williams Strategies Indicator

20 thg 3, 2021

This indicator is a trend following indicator. It plots some of the trend following strategies described by Larry Williams in his book 'Long Term Secrets to Short Term Trading'. Below are types of trend following strategies you can trade using this indicator. These are notes taken directly from Larry Williams' book.



Short Term Low Strategy

Short Term Low - Any daily low with higher lows on each side of it.
Intermediate Term Low – Any short term low with higher short term lows on each side of it.
Long Term Low – Any intermediate term low with higher intermediate term lows on each side of it.

Conceptual pattern for best buying opportunity is when forming an intermediate term low higher than the last intermediate term low.

This setup can be used on all time frames. However since Larry Williams usually trades the daily chart, the daily chart is probably the best timeframe to trade using this strategy.

Entry point – High of the day that has a higher high on the right side of it.
(My interpretation: price crossing above the high of the previous day is the buy signal)

Target – Markets have a strong tendency to rally above the last intermediate term high by the same amount it moved from the last intermediate term high to the lowest point prior to advancing to new highs.

Trailing Stop – Set stop to most recent short term low, move up as new short term lows are formed. Can also use formation of next intermediate term high as an exit point.

A 'run' to the upside is over when price fails to move higher the next day and falls below the prior day's low.



Short Term High Strategy

Short Term High - Any daily high with lower highs on each side of it.
Intermediate Term High – Any short term high with lower short term highs on each side of it.
Long Term High – Any intermediate term high with lower intermediate term highs on each side of it.

Conceptual pattern for best selling opportunity is when forming an intermediate term high lower than the last intermediate term high.

This setup can be used on all time frames. However since Larry Williams usually trades the daily chart, the daily chart is probably the best timeframe to trade using this strategy.

Entry point – Low of the day that has a lower low on the right side of it.
(My interpretation: price crossing below the low of the previous day is the sell short signal)

Target – Markets have a strong tendency to fall below the last intermediate term low by the same amount it moved from the last intermediate term low to the highest point prior to declining to new lows.

Trailing Stop – Set stop to most recent short term high, move down as new short term highs are formed. Can also use formation of next intermediate term low as an exit point.

A 'run' to the downside is over when price fails to move lower the next day and rises above the prior day's high.



Trend Reversals

A trend change from down to up occurs when a short term high is exceeded on the upside, a trend change from up to down is identified by price going below the most recent low.

Can take these signals to make trades, but it is best to filter them with a confirmation or edge such as Trading Day of the Week, Trading Day of the Month, trendlines, etc. to cut down on false signals.



Three Bar High/Low System

Calculate a three bar moving average of the highs and a three bar moving average of the lows.

Strategy is to buy at the at the price of the three bar moving average of the lows - if the trend is positive according to the swing point trend identification technique - and take profits at the three bar moving average of the highs.

Selling is just the opposite. Sell short at the three bar moving average of the highs and take profits at the three bar moving average of the lows, using the trend identification technique above for confirmation.

This strategy can work on any timeframe, but was described as a daytrading system by Larry Williams.

20 thg 3, 2021

Phát hành các Ghi chú

Short Term Lows and Highs are shown by the arrows plotted on the chart. The Trend Reversals are plotted by the bar change color and by a line that plots when the previous bar's high is crossed. The bar color change and lines are also used as buy/sell points for the Short Term Low/High Strategy. The Three Bar Low/High is plotted using the moving averages.

23 thg 3, 2021

Phát hành các Ghi chú

Revised code, eliminated several false entry points. Removed line plot point and candle color change for Trend Reversal since most indications are the same as Short Term Low/High. Trend Reversal now only plots a label point. Other minor changes.