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Trade Stocks and Commodities with the Insiders: Secrets of the COT Report by Larry Williams

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CHAPTER 14
Charts
What They Are, What They Mean
 
 
 
 
As scarce as truth is, the supply has always been in excess of the demand.
—Josh Billings
 
 
 
My suspicions are that most of my readers are well aware of the various forms of charting. Yet, I suppose many of you are not. So for you, here are the basic forms of charting for following the markets.

IT’S ALL ABOUT TIME

The art of being a successful trader is very much about time—the right time to take action and knowing what time frame you are trading for. The first lesson is:
The trend is the basis of all profits.
That is as true of a statement as you will ever read about the markets. Here is the second part of that idea.
Trends are a function of time.
By this I mean that the bigger a trend can be, the more time is needed. There is certainly a better shot at getting a large and profitable trend in 12 months than in 12 days, 12 hours, 12 minutes, or 12 seconds. In this business, time is our ally and we usually want more of it, not less, as it is the basis of all trends.
Now, the next thing you need to know is that time is different for everyone. Some people like to day trade, while others like to hold for a year or longer. You need to know what time frame works best for you.
For most beginners I think the ideal time frame is a week to three months if we can spot such major moves. These are the definitions of time that I use:
• Long term—A year or more.
• Intermediate term—Three months to 11 months.
• Short term—Two to 60 days.
• Day ...

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