Way of the Turtle

Submitted by Book Library on 25 February, 2010 - 18:38

Shrouded in secrecy for nearly 25 years, the most successful Turtle Trader of them all breaks the silence, revealing his most lucrative trading strategies and the Turtle legend. "We're going to raise traders just like they raise turtles in Singapore." So trading guru Richard Dennis reportedly said to his long-time friend William Eckhardt nearly 25 years ago. What started as a bet about whether great traders were born or made became a legendary trading experiment that, until now, has never been told in its entirety.

Way of the Turtle reveals, for the first time, the reasons for the success of the secretive trading system used by the group known as the “Turtles.” Top-earning Turtle Curtis Faith lays bare the entire experiment, explaining how it was possible for Dennis and Eckhardt to recruit 23 ordinary people from all walks of life and train them to be extraordinary traders in just two weeks.

Only nineteen years old at the time-the youngest Turtle by far-Faith traded the largest account, making more than $30 million in just over four years. He takes you behind the scenes of the Turtle selection process and behind closed doors where the Turtles learned the lucrative trading strategies that enabled them to earn an average return of over 80 percent per year and profits of more than $100 million. You'll discover:

  • How the Turtles made money-the principles that guided their trading and the step-by-step methods they followed
  • Why, even though they used the same approach, some Turtles were more successful than others
  • How to look beyond the rules as the Turtles implemented them to find core strategies that work for any tradable market
  • How to apply the Turtle Way to your own trades-and in your own life
  • Ways to diversify your trading and limit your exposure to risk

Shrouded in secrecy for nearly 25 years, the most successful Turtle Trader of them all breaks the silence, revealing his most lucrative trading strategies and the Turtle legend. Offering his unique perspective on the experience, Faith explains why the Turtle Way works in modern markets, and shares hard-earned wisdom on taking risks, choosing your own path, and learning from your mistakes.

Curtis Faith, who was 19 years old when he joined the Turtles, went on to become the most successful member of the group. For the first time, he explains the wildly successful Turtle system; the rules, timing, risks and rewards that can deliver enormous profits. Faith also shows you how to use this system in the modern market including how to select the right trades, smooth out returns, effectively diversify and know when to exit a winning trade.

The first definitive book on the legendary Turtle Traders, their story, their methods and the secrets impressive annual returns. Written by the most successful Turtle of all, after decades of secrecy. Includes behind-the-scenes strategies and step-by-step techniques that today's traders can use to achieve maximum profits in the most volatile markets.

There are no glaring weaknesses to the book

Curtis Faith's Way of the Turtle is a significant contribution to the trading literature. As other reviewers have noted, it works on several levels: It is an engagingly written first-person narrative of one of the most interesting experiments in trading, but it is also a thoughtful presentation of the various ingredients of trading success.

Faith spells out the Turtle trading method in detail, providing a template for a more general approach known as trend following. Most helpful is the way he breaks down the method into components: entry criteria, criteria for adding to positions, position sizing, stops, and exits. A particularly interesting chapter draws upon his Trading Blox software to update trend following research and illustrate the results of several systems in recent markets.

If I had to identify a single theme for the book, it might be this: Relatively simple trading systems can provide a tradable edge, but it is psychologically difficult for traders to follow these systems and exploit that edge. Faith illustrates this with the variability in the results among the Turtle trainees (despite the fact that all of them were given the same system rules). He also provides a detailed accounting of the psychological biases that make it difficult to follow systems that ride relatively few big winning trades for an overall positive expectancy.

Among the gems provided by Way of the Trader is a discussion of stop loss criteria and surprising research about what works and doesn't; a concluding chapter that lays out the Turtle rules in manual form, along with execution tactics; and an insightful presentation of the reasons most traders do not succeed in trading. Faith questions both discretionary trading--trading without systematically testing one's trading ideas--and the notion that trading systems eliminate emotions from trading. He makes it very clear that traders need an objective edge in the marketplace *and* the psychological fortitude to ride out inevitable drawdowns on route to exploiting that edge.

I don't think it's necessary that one be a dedicated trend follower to greatly benefit from this book. Besides being a fun and interesting read, it is an excellent introduction to the various components of trading methods and how they impact outcomes. It is also a first-rate integration of the psychology and techniques of trading. Perhaps most important of all, Way of the Turtle is an illuminating presentation of risk management and consistency, two major contributors to market success.

There are no glaring weaknesses to the book that I can detect. Personally, I would have enjoyed a discussion of the pros and cons of trend following at shorter time frames. I also would have liked a discussion of the capital required to properly implement the Turtle approach, given that success derives from holding a diversified portfolio. Those, however, are small quibbles when compared to the book's strengths. The author's chapter elaborating the Turtle method as a life philosophy is, by itself, worth the price of the text.

In short, Curtis Faith has written the definitive book on the Turtle experience and way of trading. It's hard to imagine anyone reading this book and not coming away from the experience impressed with the blend of research and psychological strength that goes into trading success.

Author Biography

Curtis M. Faith was the most successful of all the Turtles, earning more than $30 million for Richard Dennis while trading as a Turtle in his early 20s. He has become one of the industry's leading pioneers of mechanical trading systems and software. He is currently the head of research and development for Trading Blox, LLC and runs an Internet forum at tradingblox.com/forum.

Table of Contents

  1. One Turtle’s Story
  2. The Turtle Way – How the Turtles Made Money
  3. The Basic Elements of The Turtle Way
  4. Trading Psychology – Preparing Yourself to Do the Right Thing
  5. Money Management – Staying Alive through Tough Times
  6. Cutting Losses – Knowing When to Get Out of a Losing Trade
  7. Letting Profits Run – When to Exit a Winning Trade
  8. Catching the Wave – How to Enter a Position
  9. Diversification – Smoothing Out Your Returns
  10. Limiting Risk – Protecting Against Disaster 16
  11. Systems Part I – Finding a Strategy that Fits You
  12. Systems Part II – Avoiding the Pitfalls of Testing
  13. Systems Part III – Going from Testing to Trading

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