KING - Larry Williams, a futures trading legend, endorses the blockbustiest emini trading methodology, KING!

Well, not really... But I thought that would make a very swell headline, so I really could not resist. I love bombastic headlines. That's my favorite way of mocking marketers. Heck, I obviously can't compete with them, but at least I can mock them. 

Still, while technically Larry Williams (or even Larry King) has nothing to do with KING, there is something in it that Larry Williams would probably approve of, even though this hardly is a very standard thing. Curiously enough, this thing, a certain aspect of KING's approach to emini trading appears to trouble people from time to time, quite unnecessarily, though, because I doubt that it would trouble Mr. Williams. It has to do with the reward-risk ratio, sometimes referred to as the win-loss ratio. So read on...

I receive quite a few emails from prospective KING clients every month. I try to answer all of them as well as I can, even though there is already a pretty comprehensive FAQ section that addresses most of the relevant issues. Because of that I often refer them to it, but whenever their concerns revolve around what I consider myths, I try to do my best to dispel them. I may not always succeed, as myths just like various other prejudices, die hard, but since this site professes to be of educational nature as well, I consider it my duty to help its visitors understand trading better. Especially emini trading. Or at least to give them my perspective on things. 

As I said, that may not always succeed as some people are just not flexible enough to accept my opinions even if there is nothing wrong with them (the opinions, that is, not the people), but one fine day, in the first week of 2010, I think I did succeed. It was on that day that I got an email from a Robert who wanted to know a bit more about the risk-reward ratio as it is implemented in KING. 

Though this was already addressed in some detail in the answer to question 29 of KING's FAQ, I wanted to add a bit more to it. You can see how it went from this email that I sent Robert the same day.

I got a prompt response from him. It was obvious from his email that not only did he understand what I meant, but he also told me what I did not know at the time. Namely, he mentioned that when Larry Williams turned $10,000 into a cool million or so bucks he was employing a stop-loss 2.5 times bigger than his target. Yes, the story of Mr. Williams success has been well been known to me for many years now and I even own two books written by him, but I was not aware of this little detail. As you see, Mr. Williams would certainly have no problems with KING's approach to trading, unlike some visitors to this site.

There is a special document in KING called "The edge or playing it like a gambler" that addresses this issue in some detail. Trading is gambling and if you want to win it, you need to approach it the same way professional gamblers do. That starts from knowing some very basic math that applies to both trading and gambling. Otherwise, you may forever be puzzled by certain things. That's particularly true if your knowledge of trading comes from trading forums, the easiest way to obtain it, the worst in quality, though. 

I don't think KING's approach is revolutionary in any way, even if it's more out of the box than all the bozo stuff out there peddled by marketers. It is simply more educated, hence better. But I don't think that the issue of reward and risk is fully understood. In fact, I am afraid it is understood somewhat superficially even by those who are not puzzled by the fact that an approach with low reward compared to risk may work quite well too, which is why I thought the KING document in question was needed. 

Larry Williams has a daughter, Michelle. She is a Hollywood actress. While I live in Hollywood, I have yet to run into her, but maybe one day this will happen... Like her father she also won the same trading  competition, Robbins World Cup Trading Championship, although her profits were much smaller. She was only a teenager when she did it and her winnings are the fourth best in the history of the competition. Overall, that's not a small feat at all.