tactical trader

This from The Australian brings a whole new meaning to the sales by line so often used by Williams and his cronies. I am particularly amused by the line that describes how the arrest has turned away first time attendees. So this is what it takes to get people to realise what is going on with these people - arrest for tax fraud. I hope the Inland Revenue are paying attention.

Arrested get-rich-quick guru needed help to raise $1m bail

Nick Leys
May 27, 2006

LARRY Williams, the international share trader wanted in the US for tax evasion, will carry on with his Sydney get-rich-quick seminars despite struggling to raise his $1million bail this week.

Arrested by Australian Federal Police last Saturday, Mr Williams spent five nights in a Sydney holding cell. He was granted bail on Tuesday afternoon, but could not raise the surety until Thursday morning, when he walked free.

Mr Williams's reputation is based on claims of massive windfalls from the futures market, most notably his claim that he traded $US10,000 ($13,247) into $US1,100,000 in less than 12 months.

His daughter is Michelle Williams, the Oscar-nominated actor and partner of Australian film star Heath Ledger. The pair met while filming Brokeback Mountain and are based in Brooklyn.

Mr Williams eventually raised the bail with $500,000 from his partner Louise Stapleton and surety of $500,000 from a married couple who are associates of his Australian promoter, but who had not met Mr Williams previously.

The promoter, David Hunt of ADEST Trading, told The Australian that Michelle Williams and Ledger were aware of the situation but had not been asked for assistance because Williams "didn't want to break into their schedule".

Did his daughter offer to bail her father out?

"No comment," Mr Hunt said.

The US-born Mr Williams, who lists residences in the Virgin Islands and South Africa, has courted controversy before. Commodity trader William Gallacher claimed in his book Winner Take All that Mr Williams was a promoter "operating on the comic fringe of commodities" who had been investigated by US regulatory body the National Futures Association over the management of fund accounts during an investment contest, The World Cup of Futures Trading.

Mr Gallacher claims Mr Williams and the organisers Robbins Trading Company were fined $US35,000 each by the NFA for violating a compliance rule. The fine was reduced to $US13,000.

Mr Williams has admitted he was investigated by the NFA and the Commodity Futures Trading Commission, describing it as "highly politically motivated". He admits to a fine of $12,000 but had retained his trading licence.

He will deliver a Sydney trading seminar next Wednesday and another on June 7, but has cancelled similar lectures in Brisbane, Melbourne and New Zealand because of the bail conditions. Mr Williams must present himself three times a day at the police station in The Rocks in Sydney.

Mr Hunt said attention from the arrest had turned away first-time seminar attendees.

What an interesting (and expensive) few weeks it has been, markets the world over have seen the most intensive periods of selling in some time, especially the emerging Asian and European hot spots. But what next? Nobody really knows of course and even if they did I doubt they would tell the likes of you and me. Despite this lack of reliable guidance I have spent the last week reading just about everything I could get my hands on that sets out to explain what happened, particularly in looking for someone or something to blame, and what comes next.

I decided it might be useful to share this with our readers as not everyone has the luxury of being able to do this on a full time basis. I attach no endorsement to much of what I bring to your attention, you must make your own decisions but neither will I shy away from telling you what I think and what I am going to do. Please also keep in mind that this only relates to the position and longer term holdings, there is plenty of intraday action right now without me needing to comment on it.

Most talk has been of an inevitable correction, that markets have been overheated for some time and we should all have expected this to happen, especially with precious metals. The talk of a bottom being reached and a recovery being the order of the day possibly in a few weeks and certainly no later than October could just be wishful thinking or it could be a perfectly reasonable scenario.

Personally I am backing this and see the whole thing as a serious buying opportunity in waiting. Fundamentally little has changed and despite the howls of protest from the TA brigade there is no doubt that these will win out in the end. One of the most amusing things of the last week has been the scurrying for cover of the Technical Analysts only for them to emerge with yet another dazzling array of charts to show how this was predicted in the tea leaves. What a pity they could not predict this before it happened.

Please do not get me wrong, I have nothing against TA provided it is used in context and along with all the other factors that shape markets, the work of people like Robin Griffiths and David Fuller are excellent examples of this approach. In fact it was Griffiths who, during April, told us to get out of India, at least temporarily. How right he was.

Over the next few days I am going extract all the key points from my research and will be putting together an action plan for my portfolio, I will share this with you along with any insights I glean along the way. I hope it helps.

I have just finished applying the latest updates to the site and, although there are over 100 changes, the two that you’re most likely to notice are:

New session management and login

The session management code has now been updated to address two (frequently made) complaints: premature logout and automatic login. The login page now provides a ‘Remember your login details’ option that, when checked, will store your details in a cookie and means that you shouldn’t have to login manually again. Keep in mind that this ‘automatic login’ behaviour will be turned off if you manually logout from the site, change your password, delete the cookie, or have cookies disabled.

In the Member section of the site you will also find a new ‘Mark all as read’ item that can be used once you have caught up with what’s new since your last visit.

Updated Trader Locator

The Trader Locator has been completely rewritten and now makes use of the latest version of the Google Maps API. The result is improved performance (except in Internet Explorer which plods along as always) and better maps covering a wider area.

The over indebtedness of many in the UK and USA only just seem to be hitting home with the media.

We are starting to see their awareness through shock headlines such as '1 million expected to file for bankruptcy'.

Now, anyone who reads around will have known this for ages and could see it coming - but, as ever the general populus are blind until shown the light by the press.

Hopefully nobody will have enough debt on here to be considering going bankrupt, but out of interest i thought i would post the contents of a recent marketing email i received from equifax.

5 bankruptcy facts everyone should know...

1. Bankruptcy is NOT an easy option
   It’s true that your bankruptcy could be discharged within 12 months but you may not be able to get credit again for up to 6 years. And even then you’re likely to pay a lot more to borrow money, because you represent a greater than average risk to a lender.

2. It actually COSTS money to go bankrupt
   You need £460 to cover court costs and the Official Receiver’s fee – and it has to be paid in cash.

3. You STILL have to pay your creditors even if you go bankrupt
   If you have any assets, such as a house, they may be sold to pay your creditors. If you are deemed to have more monthly income than you need to live on, some of the surplus may also be paid to your creditors for up to three years.

4. You CAN’T keep bankruptcy a secret
   Bankruptcy orders are published in the London Gazette and local newspapers. The information is also displayed on the Individual Insolvency Register – which is accessible on the internet – for a period of 3 months after you are discharged.

5. Your CREDIT file is affected for 6 years
   After bankruptcy you are likely to find it difficult to get credit – including a mortgage, loans, credit cards – even a mobile phone.

I’ll be updating the site at some point over the next few days and, because some of the updates apply to the database, the site will have to be taken offline for a couple of hours.

I’ll post more about what has changed once I’ve finished – there’s quite a lot to go through!

This you have to see, it is hilarious!

Link

Back in March I posted about some chart problems in eSignal. I’m pleased to report that, following some harassment of our contact at eSignal by Steve, the problem has now been entered as official bug EDL #22026 on the eSignal development list!

Unfortunately it’s probably too late to make it into the soon-to-be-released version 8.0 (the release candidate is currently available for testing here) but will hopefully be fixed soon.

I was staggered to learn this week that the slogan ‘Pure Dead Brilliant’ has been painted on the terminals of Prestwick Airport in Glasgow at a cost of £3m. This piece of news in The Times further went on to describe how the Councillors in Derby have spent huge sums of money devising (along with expensive consultants) the slogan ‘Derby Does It”. I am not sure what Derby does but it is beside the point, the article moves on to state how this obsession with public image benefits no one but the new “ruling class of braggarts and bluffers” who are expert at playing the system but “useless at getting the job done”.

What parallels there are here with our own activities as traders and investors. The same class of braggarts and bluffers has populated the world of trading, education and advice for more years than I care to remember. The difference is that they are now getting far better at disguising the real story, the fact that they are ripping you off and you do not need them. One such supplier springs to mind immediately, this individual claims to be a world class trader who brings extensive direct trading experience to the business of teaching others. He claims to have developed countless money making strategies all of which are available to you at a price.

This is a lie. The information is out there and readily available that proves this is a lie. This person had not traded a day in his life before starting this massive money making scheme. Now he does not need to bother thanks to the hundreds of hapless investors who have been suckered in to buying the services on offer. This person’s career prior to their sudden emergence in the investment community was lacklustre and uninspiring but, rather like Prestwick Airport and Derby, he has had a make over and people are falling for the hype. Do not be one of them.

Ask any professional trader about the things that matter to them most in their trading and the chances are that one of the most popular responses will include reference to spreads.

Cost control in trading is critical to year on year increases in profitability and one of the major charges that will eat into this profitability is the spread, the difference between what you are expected to pay and what you will get for what you are selling.

In my experience most investors are pretty lazy where spreads are concerned, mainly based on the belief that there is very little they can do other than pay them. They convince themselves that over time, if they have bought wisely, the spread will become very insignificant when compared to the growth they will enjoy.

This may well be true but think of it another way, imagine you make just one trade each month and it involves buying 5000 shares at £3.00 each. If you could get these shares for just one penny less than the ‘sticker price’ then you will save £50. Do this each month and by the end of your first year your savings will be a very healthy £600, reinvest this and the results are even more dramatic.

This £600 should be in your pocket, not the pocket of your broker. Think about this, you probably shop around for cheaper petrol or go online to save money on a holiday and yet here you are actually giving money away. It simply does not add up.

Until relatively recently there was very little you could do about this but in line with the rapid advances in electronic trading the data that will give you the opportunity to get these price improvements is readily available. Sometimes you will have to pay to get it although in the majority of cases it is rolled up into the service provided by your broker. Generally the data is referred to as Level 2 and you are going to hear more and more about it as it gains in popularity.

One of the most exciting things about Level 2 is that you can use the information to help you trade using what is generally called ‘direct access’. In very simple terms this means that instead of asking someone for a price for the shares you want to buy and then being forced to accept this you can place your own orders directly at the exchange on what is known as the order book. This order is placed at the price you want to pay which brings considerable advantages over the more traditional methods you will be familiar with.

What a few weeks it has been, the FTSE has been dancing around the magical 6000 figure causing fear and excitement in about equal measure. Who knows where it will be by the time you read this, I certainly don’t. What I do know is that this is a very dangerous time for the average investor, by average I mean those who believe all the hype about the return of a serious up move and have rushed headlong to make the most of their ISA allowances.

I read recently that unprecedented numbers of people are now returning to equities, especially as they are now realising that the property honeymoon is over. Clearly for the professional trader there is money to be made here as the professionals cause the market to whipsaw up and down to take maximum advantage of the gullible but what about everyone else? The people who, once again are entrusting large chunks of their savings to a market that bled them dry just a few years ago. What short memories people have.

The answer as always is to diversify. Yes the FTSE has had a good run, yes it may well carry on way beyond the 6000 point fuelled by demand from the returning flock but what if it does not? If you have everything in the FTSE you are stumped. Far better in my opinion to have part exposure to the FTSE and at least then you will get something from any up move but you will also be protected from any downside by your other holdings. You have been warned.