Trading lessons from the turtle strategy


As mentioned above, the “emotional” factors were not taken into account, traders were not tempted to take reckless risks for the sole purpose of being right and to prove the market since they did not really have the initiative and this is in my opinion the main reason for the success of turtles. 


The Right Conclusion


From there to conclude that robots can replace humans and that automated trading systems are the panacea, there is only one step that we will not take. These “robot traders” are not comparable to the apprentices of Richard Dennis who still had a share of choices to make: the framework was strict but human initiative was also important, if not why took the time to train all his little turtles before letting them trade? Clearly, what is needed is a bit of common sense in a well defined framework. Also you need to go through the BTCC review there.


Stop compulsive trading!

The breakout method on which this strategy is based greatly limits the number of trades made. Simple advice is therefore essential: be patient. Yes, you may spend several days desperately staring at your screen with a boring trader’s eye. But if you do not wait for the opportunity to present itself, you are not looking to make a winning trade, you are looking for adrenaline and it is more the attitude of a casino player than a trader pro. Simple observation, no judgment on my part. 

Stops: in my opinion, one of the most important rules of this strategy is systematic stop! The limit of 2% of the capital in potential loss that is possibly discussed and to say that most traders don’t put stops. 

For winning exits, the simple (but rarely followed) rule of “let profits slip and cut losses ” applies. A common mistake made by losing traders is to be a little “greedy” and to cut gains too soon. Consequence: it takes a much higher ratio of winning trades / losing trades to have a system that works.