Larry Williams: The Volatility Breakout System Behind His 1987 World Cup Win

Larry Williams is mostly known for one number: a futures trading contest in 1987 where he turned about ten grand into over a million. The system people associate with that run is surprisingly simple. Take yesterday's range, add a slice of it to today's open, and buy if price gets there. I build a tool that reads chart screenshots, so what I wanted to figure out was which parts of his method you can actually see on a chart and which parts live somewhere else entirely.

Quick Answer

Below: the contest and why the exact figure moves around depending on who you read, the breakout rules with a worked example, the Oops! pattern, why his COT timing can't come from a chart, what the sources say about his sizing, and whether the breakout still holds up.

Who Is Larry Williams?

Larry Williams is an American trader, author and educator who has been publishing on short-term trading since at least the late 1970s (his 1979 book), mostly in commodities and futures. The Wikipedia entry on Larry R. Williams and his CMT Association presenter bio both list the same core body of work: the Williams %R oscillator, the Ultimate Oscillator, and indices built from Commitments of Traders data.

If you've seen his name in an indicator menu, that's probably Williams %R, which has its own breakdown here. The other place it pops up is an accumulation/distribution line, and that one causes confusion: Williams's A/D compares each close against the previous close and ignores volume, while Marc Chaikin's A/D Line is weighted by volume. I'm not going to re-derive either indicator here.

On the book side, Wikipedia lists titles going back to How I Made One Million Dollars... Last Year... Trading Commodities (1979) and The Definitive Guide to Futures Trading (1988). The one most people mean when they ask for the Larry Williams trading strategy book is Long-Term Secrets to Short-Term Trading, from the late 1990s (Wikipedia says 1998, Trading Greats says 1999). That's where the volatility breakout and most of his short-term patterns are laid out.

How Did Larry Williams Win the 1987 World Cup?

The World Cup Championship of Futures Trading is a real-money trading contest, often called the Robbins World Cup. In the 1987 edition, Williams took roughly $10,000 to over $1.1 million in 12 months. The CMT Association bio puts it at 11,300% with real money. Wikipedia gives an ending balance of $1,137,600 and 11,376%. Trading Greats says $1,147,607. Other write-ups round to 11,000%. Same story, different decimals, and I haven't been able to pull the contest organizer's own record to settle it, so "about 11,300%" is the honest version.

Two caveats worth keeping in your head. First, this is a contest result repeated through bios and interviews, not an independently audited multi-year track record, so treat it the way you'd treat any reported performance figure. Second, one spectacular year in a leveraged futures contest tells you the method can produce huge upside in a contest setting. It tells you much less about the drawdowns a normal account would sit through running it. As a side note, Wikipedia reports that his daughter, the actress Michelle Williams, won the same contest about ten years later, though Trading Greats only says she briefly competed, so I'd file that under "sources disagree."

What Is the Larry Williams Volatility Breakout?

The idea behind it is that a sudden expansion in range tends to keep going. The MQL5 write-up of the Williams volatility breakout, which draws on Long-Term Secrets to Short-Term Trading, quotes him comparing it to an object set in motion. When price moves an unusually large distance away from the open, that is the expansion, and you get on board in that direction.

The rules, in the form most implementations use:

• Measure yesterday's range
  Prior day's high minus prior day's low. That one number sets the size of everything else.
• Buy stop above the open
  Today's open plus the range times your multiplier. If price trades up to it, you're long.
• Sell stop below the open
  Today's open minus the same amount. If price trades down to it, you're short (or you only take longs, which is a common filter).
• Get out fast
  Published versions pair it with a protective stop sized off the range and a time exit. Several profiles also describe a 'bailout' exit at the first profitable open, and exits after a fixed number of days.

A worked example (made-up numbers)

Say yesterday's high was 52.40 and the low was 50.20, so the range is 2.20. Today opens at 51.00. With a 0.25 multiplier, the offset is 0.55: buy stop at 51.55, sell stop at 50.45. With 0.50, the offset is 1.10: buy stop at 52.10, sell stop at 49.90. Same bar, same open, and the two versions put your long entry 55 cents apart. That gap is the whole reason the multiplier matters.

There is no official multiplier

This trips people up. WH SelfInvest's free version multiplies the range by 0.25. The MQL5 article defaults to 0.50 and calls it user-defined. TradersMastermind describes a variant that adds the full range to the prior close. The multiplier is a historical, optimized parameter that traders pick and test for their market. It is not something a chart shows you and it's not something an AI tool should be calculating for you. If you see one confident "Larry Williams number," that's one person's version.

Structurally, this is a close cousin of the opening range breakout and the London session breakout. All three pick a reference range, set a level off it, and enter when price breaks. The difference is what defines the range: the first few minutes of the session for ORB, the Asian session for London, and the entire prior day for Williams.

The Oops! Pattern and the Rest of the Toolkit

The Oops! pattern is the other setup attached to his name. The version described by Unger Academy's test of the Oops pattern goes like this: the session opens with a gap below the prior day's low, and the long triggers when price recovers back up to that prior low. The short is the mirror, a gap above the prior high that falls back to it. It's a failed-gap trade, and the gap part is covered in more detail in our guide to the different gap types. One blog says Williams published it back in 1979, and Unger's own test on DAX futures found it lost effectiveness from late 2022, so I wouldn't assume it works today just because it has a catchy name.

Around those two entries, profiles of his work consistently mention seasonal and day-of-week tendencies, intermarket relationships (bonds and gold against stocks), and the COT data covered in the next section. The seasonal and day-of-week material mostly reaches you secondhand: TradingCoachU, PicturePerfect Portfolios and two Altrady write-ups all list calendar tendencies as part of his toolkit. I'm not quoting any win rates or specific calendar stats from them, because I couldn't trace those back to his own published tables. Here is the whole toolkit in one place, with the question I care about in the last column.

The pattern is pretty clear. Anything built from price bars (the breakout levels, the Oops gap, his oscillators) has a chart-visible part. Anything built from positioning reports, decades of calendar stats or your own account doesn't, and the multiplier is a decision you bring to the chart, not something you read off it.

Why His COT Timing Is Out of Reach of a Chart Screenshot

Williams uses Commitments of Traders data as a timing overlay, broadly watching what commercial hedgers are doing relative to speculators. That data comes from the regulator. The CFTC's Commitments of Traders reports break down each Tuesday's open interest in futures and options markets where enough traders hold reportable positions, and they're released on Fridays at 3:30 p.m. Eastern.

So it's weekly, it lags by a few days, and it isn't price. No candle encodes who holds the open interest. A chart screenshot, no matter how clean, cannot tell you whether commercials are net long, and any tool claiming to read his COT indices off a price image is making it up. Some third-party write-ups describe specific normalization windows for his COT index, but I couldn't confirm those as his exact formula, so I'm not repeating them. If you want this layer, you pull the CFTC reports (or a service that charts them) and look at them next to the price chart.

How Did Larry Williams Size Positions?

This is where the sourcing gets thin, so I'll be careful. MoneyShow's speaker bio says his work includes applying the Kelly ratio to money management. TradingCoachU and FinancialWisdomTV both describe sizing off your largest loss: (account balance times risk percent) divided by largest loss gives the number of contracts or shares. TradingCoachU frames that with a 2% risk cap, but that's the blog's framing, not a confirmed Williams quote. The sources I read lean the same way: always use a stop, and assume the next trade could be your biggest loser.

Worth pointing out the tension here. Contests reward aggressive sizing in general, and I could not find a source for his actual sizing that year. So copying the entry rule is fine, but sizing a real account to chase any contest-winning return is how people learn about drawdowns the expensive way. If you want the mechanics of turning a stop distance into a share count, our post on risk per trade and position sizing walks through it, and placing stops from structure covers where the stop itself should go when the chart gives you a better level than a fixed range multiple.

What Can a Chart Screenshot Grade in a Volatility Breakout?

This is the practical part. On a daily chart, the prior day's high and low are right there in the last completed candle, and today's open is visible once the session starts. So the inputs to the breakout levels are readable. What isn't on the chart is your multiplier. The honest workflow is the same one that works for opening range breakouts: you mark the reference levels yourself (compute the buy stop and sell stop with your multiplier, draw them as lines), then screenshot and let the AI read the chart around them.

What that read can cover: was yesterday a normal day or already a huge expansion bar (buying a breakout off a blow-off range is a different trade), which way the trend is pointing, whether there's obvious resistance sitting just above your buy stop, whether price is pushing through your level with follow-through or just poking it, and where a stop would sit relative to structure. That's the same kind of question as whether to take the breakout or wait for the retest, just with Williams's levels instead of a drawn trendline. The general mechanics of how AI reads a chart image are in our AI trading overview, and the scope of what gets graded is on the AI chart analysis page.

To be completely clear about the limits: SnapPChart does not implement Williams's system and has no detector for it. It doesn't calculate a multiplier, doesn't spot Oops setups across a watchlist, and doesn't touch COT data. It grades the chart you upload.

How Williams differs from the other educator profiles

If you've read our other trader profiles, Williams sits in a different corner. Andrew Aziz and Oliver Velez are intraday stock traders working off stocks in play and intraday price action. Mark Minervini is a growth-stock swing trader filtering with a moving-average Trend Template. Williams is mostly a futures trader whose best-known entry is mechanical and built from the daily bar, with a positioning-data overlay none of the others use. If you want the intraday stock version, the Aziz profile and the broader momentum trading strategy guide are the closer fit. For a map of the whole field, there's our overview of day trading strategies.

Does the Larry Williams Volatility Breakout Still Work?

I can't give you a clean yes, and I'd be suspicious of anyone who does. What the sources agree on is where it breaks. TradersMastermind says flatly that volatility breakouts get hammered in low-volatility conditions, and the MQL5 article notes that no strategy behaves the same across all markets. WH SelfInvest suggests adding a trend filter and a volatility filter to improve breakout strategies, which is another way of saying the raw rule takes a lot of bad trades on its own. Emini-Watch and RogueQuant both point out that small backtest samples don't tell you much.

My read: the idea underneath it (enter when range expands away from a reference point, exit fast if it doesn't follow through) shows up in a lot of modern breakout trading, including most intraday momentum setups. The specific multiplier is the least important part and the most over-discussed. What actually protects you is skipping breakouts that fire into obvious resistance or out of a dead market, and that part is a chart read.