In 1983, two commodity traders, Richard Dennis and William Eckhardt experimented to see if trading is an inborn skill or it can be taught.
So they conducted interviews to find people who were the right fit.
A few lucky candidates were selected for the program—they were known as the turtle traders.
Next, Richard Dennis gave the turtle traders a fixed set of trading rules to trade the markets (using his money).
It was astonishing! Several turtle traders made triple-digit returns within a few short years and some even went on the set up their own hedge funds.
Clearly, the turtle trading rules worked well in the 1980s.
But the question is:
Do the turtle trading rules still work today?
Well, that’s what you’re about to discover in this post.
So let’s get started…
This post was originally posted here. The writer, Rayner Teo is a veteran community member and blogger on InvestingNote, with a username known as @Rayner and has 617 followers.
Turtle trading strategy: The original rules and results
Turtle trading is basically a trend following strategy for the futures market.
Here are the rules of the turtle trading strategy:
- Entry: Buy when the price breaks above the 20-day high
- Stop loss: 2 ATR from the entry price
- Trailing stop loss: 10-day low
- Risk management: 2% of your account
- Vice versa for short trades
- Bonds & Interest Rates: 30-Year US Treasury Bond, 10-Year US Treasury Bond, Eurodollar, 90-Day US Treasury Bill
- Commodities: Coffee, Cocoa, Sugar, Cotton, Gold, Silver, Copper
- Energy: Crude Oil, Heating Oil, Unleaded Gas
- Currencies: Swiss Franc, Deutschmark, British Pound, French Franc, Japanese Yen, Canadian Dollar
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What is financial modelling?
A financial model involves building financial models from scratch or maintaining and updating the existing one as to construct a financial representation of the financial condition of a financial security or a company. It is used to calculate, estimate and forecast financial numbers.
Some might ask – what kind of skills do you need in order to build an efficient financial model that produces accurate and dependable results?
Well, we have prepared a list of skills that you need to achieve that: