Turtle Trading is a popular trading system for trend traders. It became popular when super-trader Richard Dennis taught his students how to trade profitably. Those traders were nicknamed the 'Turtles'. Over the years, there have been various versions of the Turtle System. The strategy is a channel breakout method. The trading system leaves no decisions to the subjective whims of the trader.
While the Turtle method appeared to be a well kept secret, it was actually not. The rules most commonly used is a Buy Trading Signal when the High of the current day exceeds the highest high of the last 20 days and a Sell Trading signal when the low is lower than the lowest low of the last 20 days. These high and low points, create a channel and are constantly changing with each day’s new bar.
Turtle trading as a systematic trend following trading system has many followers. Some traders will add small changes to the original trading rules. I have found that it may or may not improve performance.
Let’s look at the RUT, Russell 2000 using the 20-20 rules. It is important for a trader to stick with the rules of any systematic trend following trading system. You do not find any asset always in a trend. When an asset, whether it is a stock, ETF, commodity futures contract or sector mutual fund, the big money is made when the trend does occur.
After several trades in the sideways market in the RUT, Russell 200 during 2008, a Sell Signal on September 25, 2008 would have triggered a Short Entry on September 26, 2008. This signal as a Turtle Trader would expect, produced excellent profits during the market collapse in October of 2008. In late 2008, there was a couple of unprofitable trades or whipsaw trades that moved both above and below the 20 day channel. On March 22, 2009, the RUT, Russell 2000 signaled a buy for March 23, 2009 which was early in the rally of 2009 for many asset sectors.
The big money in trading is made when one can get long at lows after a big downtrend or a bubble type uptrend. These are both conditions that occur in a number of assets.
The January 24, 2010 trading signal triggered an entry on January 25th to go Short. So far, this signal again looks very good. Should the RUT, Russell 2000 reverse, a Turtle Trader knows where the highest high of the last 20 days is, and will once again reverse positions looking for that big trend.
The Turtle Trading Daily Trading Signals are available for the next day’s entry in our Daily Trend Signals. You can subscribe to this service at www.seleznovcapitaladvisors.com for signals on over 50 ETF’s. That is over 50 ETF Trading Signals each night. Turtles Trading Rules are being sold for thousands of dollars. We gave you the rules. By subscribing to the Daily Trend Signals, each night you will have a clear update to either “Stay Long”, “Stay Short”, “New Long”, or “New Short”.
There are many systematic trading systems that have produced excellent results. Turtle Trading may be an appropriate tool for trading. The philosophy and rules Dennis taught his students, for example, are similar to the trading strategy employed by numerous billion-dollar-plus hedge funds. Richard Dennis, Bill Ekkhardt, and other trading advisors have shown performance that many have only dreamed of achieving.