Crypto:
29881
Bitcoin:
$68.455
% 1.13
BTC Dominance:
%52.7
% 0.31
Market Cap:
$2.57 T
% 0.03
Fear & Greed:
75 / 100
Bitcoin:
$ 68.455
BTC Dominance:
% 52.7
Market Cap:
$2.57 T

What is Turtle Trading?

Turtle trading is a famous strategy used by traders to take advantage of strong market trends. It’s all about following rules and not relying on ”gut feelings.” The strategy was developed by Richard Dennis, who trained a group of beginner traders and gave them a chance to manage $1 million each if they could successfully follow the rules.

Key Rules of Turtle Trading:

  1. Market Selection: The turtles traded in highly liquid markets like futures contracts. This allowed them to trade without significantly affecting market prices. They traded in various markets such as commodities, and foreign exchange.
  2. Position Sizing: The turtles used a position-sizing algorithm to adjust the size of their trades based on market volatility. This helped them diversify their portfolio and ensure consistent risk across different markets.
  3. Stop Losses: The turtles always used stop losses to limit potential losses. They determined their stop-loss level before entering a trade.
  4. Exits: Exiting a position too early can limit potential profits. The turtles had specific exit rules. For long positions, they used a 10-day low as an exit signal, and for short positions  20-day high.
  5. Entries: Two entry systems were used. The first system involved identifying breakouts, either  20 days high or low 55 days breakout.
  6. Tactics: The turtles learned specific tactics, such as using limit orders and waiting for calmer market conditions before placing trades.

You might like it: What Is The Grid Trading Strategy?

The turtle trading experiment revealed two important lessons.

  • Firstly, having a well-determined trading system with clear rules.
  • Secondly, the experiment highlighted the psychological aspect of trading. Some students struggled to follow the rules, modified them, or missed certain entry signals. It showed that humans find it challenging to stick to a set of rules.

Turtle trading is a cool strategy that helps crypto traders make investment choices based on logic rather than emotions. It can guide you towards a successful trading approach. 

 


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