Part IV : On Trading

TJ : Is trading difficult ?

Well, it’s certainly not simple.  Successfully trading commodities is the most difficult thing I can think of.

TJ : What are the difficulties ?

Finding a good trading system and following it exactly.

TJ : What is the biggest cause of failure and how should people overcome it ?

Letting your emotions override your plan or system.

TJ : Are traders born or can they be taught ?

Both.  Some people are born with an innate discipline.  Most have to learn it the hard
way.

TJ : What would make a good trade ?

The trade should be in the major trend direction. It should not have wild gyrations. If possible there should be a nearby support area to provide a reasonable stop. It should be rated high on the COT.  (Commitment of Traders.)

TJ : What would make a lousy trade ?

It would be a trade against the major and minor trends with wild gyrations.

TJ : You’ve been trading for some time. I think one of the most difficult things traders are faced with is dealing with emotion. How do you avoid falling into the type of trap ?

That’s a good question.  It takes experience, discipline, quickly recognizing the problem and the determination to overcome it.  Otherwise get out of trading.

TJ : What else should people keep in mind when they are managing risk ?

Risk is something one should consider before entering the trade.  He can use a chart to determine the support and resistance.  If those allow too much risk, either forget the trade or come up with a dollar (amount of money) risk.  Most importantly, do not increase the risk if the trade is going against you.

TJ : Given a chance to start all over again, what would you like to do differently?

Well, if I knew then what I know now, I would probably know Bill Gates and Warren Buffet as personal friends!  Seriously though, as I look back on my life and think of how exciting and rewarding it has been, including the hard times and the good times, I wouldn’t change a thing! 

TJ : Let’s talk about trading education. How long do you think it would take someone to master the art of trading?

Of course that depends to a great extent on the person and his mastering of the attributes we have been talking about.  Most traders never master the “art of trading,” because to me that implies being able to trade profitably without a system to rely on.  So, I don’t think there is I have a definitive answer to that.

Part V : Trading System

TJ : Other than the book, you have also developed a trading systems ? Please tell us a little about it. Why did you develop it ? What is the basic principle?

Over the years, I have developed numerous trading systems.  I ended up with two trading systems that I will probably trade for the rest of my life.  One is the Delta Plus System which trades 17 commodities profitable with low draw downs. I prefer to trade Delta Plus on what I call “the big 8” instead of 17. It has two parameters.  It has twelve years of very profitable results and two years of actual trading results.

The other system is the DDS system.  It is based on a certain configuration that very often causes a major break out either up or down.  We take the trade in the direction of the breakout and follow it with a unique stop.  Although this system is definitive, it has never been programmed.  It would be a bear for anyone to program.  Our experience with the program in 10 years of actual trading, as I mentioned above, was over $50,000 per year.  Draw down is generally very low.   

TJ : What is your view on trading systems ? Do they work ? What makes them work ?

I think the best thing a commodity trader can rely on is a good trading system. In the February issue of Futures magazine, is an article bout the “Top Ten Trading Systems through Time”.  I know George Pruitt (who conducted the testing) personally.  He is totally trustworthy.  I have not revealed my two systems to anyone to program.  My personal programmer is good friend who works exclusively for me. 

I will list several of these systems so you can look them up on Google.  They are all for sale. Here we go: Aberration, Basic II, Dollar Trader, R-Breaker, Grand Cayman, Trend Channel, and Golden SX.

I am not familiar with any of these systems or how many commodities they trade.  I don’t want this to sound like a commercial, but add to the list my Delta Plus System, which is available from the Delta Society International.

TJ : When you create these systems or indicators, do you alter them constantly to adjust to changes in market behavior ?

Absolutely Not.  That is a recipe for disaster.  I call it fooling oneself.

TJ : What is the Volatility System and how did it came about ?

I think the Volatility System is the best, but most overlooked system in the New Concepts Book.  In 1993, Futures Magazine did a study on trading systems, and declared then that the Volatility System was the best system up to that time.  The system is also on George Pruitt’s list mentioned above.  The basis for the system is my discovery of True range.  The system has two parameters that should be adjusted for each commodity.  One is the number of days in the Average True Range.  The other is the distance from the close of the high day to the SAR (Stop and reverse.)

Part VI: Recommendations

TJ : What books would you recommend to our readers ?

To tell you the truth, there are no so many books out on technical trading, I have not been able to keep up with any of then.  However, I have a lot of respect for any books written by Tom DeMark.  Look him up on Google.

TJ : Do you have any final comments you’d like to share ?

I really enjoyed writing this.  Your questions were very well put and covered about everything that one would want to know about trading.  I hope that my answers have been beneficial to your readers.

I am over 70 years old and my abilities to do what I have done all my life are not as sharp as they used to be.  Over the years, I have written three books on technical trading and trading systems and one book with the modest title of “The Wisdom Of The Ages In Acquiring Wealth” 

If I had only known in my youth what is in this book, I would be much wealthier than I am now.  The book is all conversation between the teacher, Mr. Richmond, and the students.  I would urge you to get a copy from Amazon.  Read it yourself and then have all your children read it.

In closing, here is something kind of interesting.  My name is spelled Welles Wilder.  The only other person who I have found that spells Welles with two e’s is Orson Welles. So if you look me up on Google as Welles Wilder you will get so many hits.  However, if you look up Wells Wilder you will get three times as many hits.  The bottom line is that three fourths of the people that make reference to me don’t even know how to spell my name!

Well, I really appreciate your insight and thank you for your time.