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Turtle Traders Strategy

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The legendary Turtle traders were a group of aspiring traders chosen through a job ad and interviews to be personally mentored by multi-millionaire Market Wizards. Richard Dennis and William Eckhardt set off to find out if traders were just born to be good traders or if anyone could be trained to be successful in the markets with no experience. They found the answer, if new traders could follow their rules, they could be successful. Many of the Turtle Traders became millionaires and went on to manage funds successfully their self.

Turtle Traders Names

Who are the original turtle traders?

Jerry Parker
Liz Cheval
Brian Proctor
Tom Shanks
Anthony Bruck
Michael Carr
Jim DiMaria
Howard Seidler
George Svoboda
Russell Sands
Michael Shannon
Curtis Faith
Jim Melnick
Michael Cavallo
Erle Keefer
Jeff Gordon
Mike Carr
Michael Cavallo

Turtle Traders Rules

Founder of the ‘Turtle Traders’ Richard Dennis quoted from the book Market Wizards: “I always say that you could publish my trading rules in the newspaper and no one would follow them. The key is consistency and discipline. Almost anybody can make up a list of rules that are 80% as good as what we taught our people. What they couldn’t do is give them the confidence to stick to those rules even when things are going bad.”

Most of the traders that could follow the rules went on to be millionaires and to manage money professionally.

The Turtle system was a complete trading system.

Markets – What to buy or sell

  • The Turtles traded all major futures contracts, metals, currencies, and commodities.
  • The turtles traded multiple markets to diversify risk.

Position Sizing – How much to buy or sell

  • Turtle position sizing was based on a market’s volatility using the 20 day exponential moving average true range.
  • The Turtles were taught to trade in increments of 1% of total account equity,

Entries – When to buy or sell

  • The Turtles traded a Donchian breakout system, System 1 entered a 20 day break out and System 2 entered a 55 day break out.
  • Positions were added to in a winning trend. (pyramiding)

Stops – When to get out of a losing position

  • System 1 exited at a 10 day break out in the opposite direction of the entry and System 2 exited at 20 day break out in the opposite direction of the entry.
  • No trade could incur more than a 2% equity risk, stop losses were planned accordingly

Tactics – How to buy or sell

  • The most important aspects of successful trading is confidence, consistency, and discipline.
  • The Turtles believed that successful traders used mechanical trading systems.
  • They traded liquid markets only.

Turtle traders bought strength, sold weakness, controlled risk, and followed their rules.

Turtle Traders Book

The definitive book about the turtle traders is The Complete TurtleTrader: How 23 Novice Investors Became Overnight Millionaires by Michael W. Covel. This book tells the full story of their journey from the beginning to end of the program. It reads like a financial thriller much like the books by Michael Lewis like The Big Short and Moneyball.

Turtle Trader Rules PDF

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