Larry Williams OOPS Trading System
Larry Williams OOPS System methodology was presented in his book, How I Made One Million Dollars Trading Commodities. It is still used by many traders with varying adaptations. OOPS trading System can be used for pattern applicable on hourly, daily, weekly, monthly or yearly.
Back in 1979 Larry Williams published a description of a short-term trading method that is based on a pattern observed often in markets. The OOPS signal is a gap trading method that fades the direction of the opening gap. It is named thus, according to Williams, because when a broker would report to his clients that they were stopped out, he would call them and say, “Oops, we lost.” Markets open and gap overnight, due to a reaction stemming from a news announcement or event occurrence. The gap is based on the opinions that are formed by the crowd, “savvy” traders, and active players
in that market. After the open, traders could realize that the market’s price had overreacted from the initial event, which caused the market to create the gap in the first place. The favorable outcome for the OOPS to work occurs as traders reevaluate the impact that the news or event had on the market’s price. Prices then reverse and move back in the opposite direction of the gap.
a) If you are watching daily charts, the first condition is that there has to be a SUSTAINED downtrend for a few trading sessions.I mean few Red Candles on daily Charts b)On the last day of downtrend when the Oops buy occurs, there is a gap down, which opens well below the previous day’s low.
c)During the course of trading the stock rises and goes above the previous day’s low, and also the previous day’s close.