Here are the rules of the turtle trading strategy:. Note: The original turtle trading rules are a little more complex as it trades both a long-term and short-term breakout. Also, it scales into winners as the price moves in your favour. If you want the exact turtle trader's rules , then check this out. Also, some of the markets no longer exist like Deutschmark, French Franc so we will exclude these markets.

Yes, you can say the original turtle trading rules have stopped working given the poor trading results you just saw. For example, you can increase the number of markets to trade, reduce your risk per trade, and increase the length of the breakout to reduce whipsaw. Agriculture: Feeder Cattle, Rough Rice, Sugar, Coffee, Soybean, Soybean Meal, Soybean Oil, Wheat, Corn, Lumber. Non-agriculture: Brent Crude Oil, Gasoline, Heating Oil, Natural Gas, Gold, Silver, Palladium, Platinum, Copper.

However, the principles behind it still work. And if you understand the concept behind it, you can develop multiple trading strategies around it and diversify your risk. Earlier, the modified turtle trading strategy produced an annual return of Market conditions change.

However, there are times when a trading strategy stops working altogether like the turtle trading strategy. The key thing is to focus on the trading concept and not blindly follow a trading strategy. Because once you understand the concept, you can build multiple trading strategies from it.

What are your thoughts on the turtle trading strategy and the turtle trader's rules? While I appreciate your work in promoting Trading, I am a bit disappointed that the you seem to conclude that the Turtle Trading strategy does not work, even though you are not trading the strategies as they were originally designed. Fx you are not testing based on the fact that the turtles position sizes where carefully defined by taking volatility into account and also the fact that they were scaling in on their positions.

That said, I am a big fan of yours, and one of my inspirations in my own personal trading journey — and I am also going to backtest you enhanced Turtle strategy, which I also appreciate 🙂. I like the practical analysis of the Turtles trading system as I have been wondering if there is still value in the original system and this article shows no but there is obviously value in trend systems. Does the market traded make much of a difference to results — so how would it work on stocks?

Nice experiment, Rayner; the Turtle Rules remain as fascinating as ever. Thank you Rayner for the email, I think the turtle idea all boils down to proper risk management, less emotional you become the better your trades. Hey Andy, he uses a period Donchian channel in this case. So a SL could be manually or coded to trail this.

Rayner, thanks for the info—if the market goes sideways for 10 days do you still exit at the 10 day low? Hi Rayner, thank you for an excellent experiment. Thanks for your analysis. In the current market conditions, traders can look for trading instruments in stocks, forex, and futures markets and trade them effectively using the Turtle trading rules, because these markets have ample liquidity and provide decent trading volumes.

The ATR of these instruments can be measured and the historical trading data is readily available for calculation using the software. Backtesting is the best method to test any trading strategy. Backtesting can be automated using much software available for free or through specialized software for this purpose.

Since Turtle trading rules are mechanical, backtesting them is very easy and can be done with little effect. Most marketplaces provide historical data and are available free. Moreover, backtesting may reveal hidden flaws in the trading strategy and the input conditions.

On the other hand, backtesting and optimization of the input parameters for the long run can provide the trader with a complete snapshot of the performance. Essentially, backtesting will assist the trader in identifying and unearthing the performance of any trading instrument using the Turtle trading rules.

There are much software that can be used to code the Turtle trading rules using Turtle trading strategy Python and other coding languages can automate the system. Turtle trading rules excel sheets can be used to monitor the performance using manual entry and exit points.

Turtle trading system indicators can also be developed and coded easily. In fact, there are many indicators, scripts, and experts available in the market to trade using the Turtle rules. All of them take advantage of the mechanical trading rules.

Many books are available in print and soft copies from many Turtles with the trading rules and strategies.

A few Turtles teach the strategy and also have modified the original trading rules to accommodate the modern days trading conditions and volumes, The Turtle trading rules pdf has short descriptions and also detailed illustrations. Like any trading system, every trader should spend considerable time understanding the basic rules and the criteria before applying them in their trading accounts. There is no substitute for understanding a mechanical rule-based system, by manually trading it. The Turtle Trading Rules is indeed a mechanical rule-based system, which many people fail to follow.

Many traders fail to follow the rules and break the rules repeatedly due to the intermittent losses and the drawdown the system produces. The basic issue with this problem is due to a lack of confidence in the trading system, this can be overcome only by repeatedly testing the strategy by trading manually or backtesting it using automated software. Furthermore, traders tend to use and apply a trading system as it is without doing enough research and understanding the core ideas.

The Turtle trading system if applied properly after doing the necessary research to select trading instruments will produce beneficial results. He is a recognized expert in the forex industry where he is frequently invited to speak at major forex events and trading panels. His insights into the live market are highly sought after by retail traders. Ezekiel is considered as one of the top forex traders around who actually care about giving back to the community. He makes six figures a trade in his own trading and behind the scenes, Ezekiel trains the traders who work in banks, fund management companies and prop trading firms.

Dennis explained how important it was to wait with patience before it was time to place an order. Once again, turtle trading is about discipline as well as the ability to spot the strongest for purchase and weakest for selling markets.

First, turtle trading rules and the experiment itself provide traders with tons of useful details and information based on other traders' experience. Secondly, it explains the core issues of trading psychology. For example, some traders failed to follow the rules because of being impatient or lacking discipline.

One would hardly argue that people find it very difficult to follow the rules even if they promise big trades. Last but not least, turtle trading is a set of tested rules. You do not need to invent the wheel although some small modifications may be necessary to customize the strategy following current market conditions and trends.

Finally, the idea is always the same — the concept is about preventing losses, delivering a high risk-reward ratio, and closing big trades with benefits. This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks. What does Turtle trading strategy mean? Original Turtle trading rules To make the most of the turtle trading strategy, you need to be well aware of its baseline rules.

There are six major points that traders should take into account when establishing a successful trend following technique: 1. Market Types The first thing is to identify the type of the traded market. Position Sizing Position sizing is the core algorithm for the turtle trading strategy. Market Entry As we consider two different breakouts upside and downside , traders may use two different market entry tactics. Stop Loss Dennis taught turtles to place as many stop losses as possible.

Market Exit It requires maximum skills to define the best moment to close the trade.

The turtle trading strategy introduces renowned trading tactics developed by Richard Dennis during the s. The main idea is to let traders benefit from sustained momentum. The main advantage here is the ability to adjust turtle trading to different types of financial markets and use it when trading various instruments. The concept is aimed at identifying upside and downside breakouts. The strategy founder wanted to develop a mechanism that would make it possible for traders to use specific rules instead of relying on their feelings and emotions.

Dennis launched an experiment and invited a group of people to trade following those rules. This is how the story of the turtle trading system began. As you have already understood from the introduction paragraph, turtle trading refers to the type of trend following strategy.

The original tactics included a day high breakout futures purchase and day low selling. Of course, the concept involves more rules to consider in addition to specific details that will shape the strategy depending on the market conditions. To make the most of the turtle trading strategy, you need to be well aware of its baseline rules. There are six major points that traders should take into account when establishing a successful trend following technique:. The first thing is to identify the type of the traded market.

Turtle trading works with high volatility markets. It means that it may help when trading:. Position sizing is the core algorithm for the turtle trading strategy. The idea is to make sure that all positions are of the same size despite the type of traded markets. Besides, it helps to improve diversification. High liquid markets let traders spot fewer contracts and vice versa. The system uses different ways to evaluate the volatility and uses a 2-day exponential moving average.

As we consider two different breakouts upside and downside , traders may use two different market entry tactics. To make things as simple as possible, traders opt for a day breakout no matter if it is high or low. What's more, turtles are supposed to use all the signals. If at least one was missed, it would result in missing a potentially big trade and win.

Would it not only drag down total return but also ruin the trading algorithm with a day breakout and winning positions with up to 4 market entries. Dennis taught turtles to place as many stop losses as possible. That was the only way to prevent bigger failures.

The key idea here is to evaluate the risk before entering the market or placing a trade. The higher volatility the market has, the wider stop losses traders are supposed to set.

It requires maximum skills to define the best moment to close the trade. Leaving too soon will limit your chances to win the big trade. Many trend followers make this common mistake. The turtle trading strategy involves many trades with smaller wins.

On the one hand, it can mean smaller losses. On the other hand, it has a day exit rule in case of a breakout downside for long positions. So, the idea is to look for the real-time price instead of using top exit orders. The turtle-trading founder taught students to use additional tactics like setting limit orders or dealing with different types of markets that generally move very fast.

Dennis explained how important it was to wait with patience before it was time to place an order. Once again, turtle trading is about discipline as well as the ability to spot the strongest for purchase and weakest for selling markets.

First, turtle trading rules and the experiment itself provide traders with tons of useful details and information based on other traders' experience. Secondly, it explains the core issues of trading psychology. For example, some traders failed to follow the rules because of being impatient or lacking discipline. One would hardly argue that people find it very difficult to follow the rules even if they promise big trades.

Last but not least, turtle trading is a set of tested rules. You do not need to invent the wheel although some small modifications may be necessary to customize the strategy following current market conditions and trends.

Finally, the idea is always the same — the concept is about preventing losses, delivering a high risk-reward ratio, and closing big trades with benefits. This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks. What does Turtle trading strategy mean? Original Turtle trading rules To make the most of the turtle trading strategy, you need to be well aware of its baseline rules. There are six major points that traders should take into account when establishing a successful trend following technique: 1. Market Types The first thing is to identify the type of the traded market.

Position Sizing Position sizing is the core algorithm for the turtle trading strategy. Market Entry As we consider two different breakouts upside and downside , traders may use two different market entry tactics. Stop Loss Dennis taught turtles to place as many stop losses as possible. Market Exit It requires maximum skills to define the best moment to close the trade. Trading Tactics The turtle-trading founder taught students to use additional tactics like setting limit orders or dealing with different types of markets that generally move very fast.

Reasons to use Turtle trading system First, turtle trading rules and the experiment itself provide traders with tons of useful details and information based on other traders' experience.

The trend was the important factor in the strategy, in the absence of a trend there was not trading and the Turtles were on the sidelines. Dennis picked only fourteen from these thousands to be part of the inaugural group. The exit strategy of both S1 and S2 aimed to eliminate the impact of these two emotions. These indicators can be successful during trending market conditions. Dennis did substantial screening before picking the individuals that would participate in the Turtle experiment. So, what were these rules?

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