Turtles Trading System – History, Rules And Strategy-cm68.com

Stocks-Mutual-Funds In 1983, Richard Dennis , the well-known speculator, had a disagreement with his friend Bill Eckhardt over whether skilled traders were born with the ability, or it was something that could be taught. They decided to test their theories, by teaching 13 beginners to trade. These beginners were known as the ‘Turtles’, and if they mastered trading, Dennis and Eckhardt would fund trading accounts for them. Over four years, the Turtles managed to earn a rate of return in excess of 80%. So the argument was won, and the Turtles trading system was born. The Turtles introduced the concept of "Volatility Normalization". In simple words, volatility normaliztion suggests that the more volatile an instrument, smaller is the trade. This means every instrument carries the same dollar risk. This is from where oft-repeated term *N, the 20 day exponential moving average of the ATR (true range) derives. In the turtle trading system, the losses are taken seriously. Let us say, a turtle trader starts with a notional amount of $100 . In case, the trader looses $10 he would, normally, have $90 to manage future trades. However, in turtle trading system, the trader would have to manage the future trades with only $80 till he earns a profit of $10 to cover the loss. Turtles entered trades based on two different systems,one being a 20 day breakout system, and one a 55 day breakout system. To use the first system, if the market traded during the day or opened thru the 20 day high or low, that would be a signal to enter.One Unit would be bought/sold to initiate the position.If the previous signal would have resulted in a successful trade, this signal would be ignored, in an attempt to avoid ‘whipsawing’. Once in a position, Turtles trading system would add a Unit every 1/2 ‘N’ advance, up to the maximum number of units they were permitted (4 in a single instrument, 6 in ‘Closely Correlated’ markets, such as Oil and Crude, 10 units in ‘Loosely Correlated’ markets, 12 units overall in a single direction).The prime directive in all of this was CONSISTENCY. As the majority of trades failed, it was essential to be in on ALL of them, so as not to miss the few huge winners that made the profits. The system is structured in such a way that there are constant losses which is offset by an occasional huge winner. However, it takes extraordinary will power to wait for the happening and if that is possible, then the turtles trading system will certainly work. About the Author: 相关的主题文章: