Turtle trader
The Turtle Traders are legendary stock market traders who became famous for being able to put their stock market trading decisions into clearly defined rules. The summary of their rules was called the Turtle Trading System . To this day, organizations adorn themselves with the reputation of these legends. Whether they still have much to do with it cannot be said. In any case, the Turtle Trader System is no longer considered successful in today's markets.
Turtle trading
Richard Dennis and William Eckhardt were two successful futures traders who were friends in the USA. They had a discussion in the early 1980s : Dennis was convinced that successful traders could only be trained with the right training. Eckhardt did not consider the necessary skills to be learned. To end the dispute, they started an experiment. In 1983, out of 1000 applicants for an advertisement in the Wall Street Journal, they selected 13 young people with no professional trading experience and taught them a trend-following system for trading futures in a two-week course. The group got the name "Turtle Traders" from Dennis - he meant that you could "breed" successful traders as well as turtles.
After the course, the participants performed simulated trades for a while. Those 10 who had proven themselves in the simulations received start-up capital of $ 500,000 to $ 2 million from Richard Dennis to implement the system. The success of this experiment was perhaps Dennis' greatest triumph: The "Original Turtles" (so called today because there was a second Turtle group) averaged 80% gains over the next four years, and some of them are still successful today in the asset class managed futures .
The Turtle System was a short to medium term trend following program based on a modernized interpretation of Richard Donchian's Weekly Rules . Breakouts from a 20- or 55-day high or low (i.e. from a Donchian channel ) were used as entry signals . The particular strength of the Turtle system, however, were the volatility- based rules for position sizes, which perhaps represented the first effective risk management in relation to systematic, trend-following trading programs.
literature
- Curtis M. Faith: Way of the Turtle. The Secret Methods that Turned Ordinary People into Legendary Traders. McGraw-Hill, New York NY et al. 2007, ISBN 978-0-07-148664-4 .
- Michael W. Covel: The Complete Turtle Trader. The Legend, the Lessons, the Results. Collins, New York NY 2007, ISBN 978-0-06-124170-3 .