Way of the Turtle: The Secret Methods that Turned Ordinary People into Legendary Traders

Way of the Turtle: The Secret Methods that Turned Ordinary People into Legendary Traders

“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-earningTurtle 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 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 M. Faith was the most successful of the Turtles, earning more than $30 million for Richard Dennis while trading as a Turtle. He is one of the industry's leading pioneers of mechanical trading systems and software. Faith is currently head of research and development for Trading Blox, LLC, a company that specializes in software for trading system analysis and development. He also runs an Internet forum for mechanical system traders at tradingblox.com/forum. After nearly 25 years, the turtles come out of their shells. Way of the Turtle takes a never-before-seen look at the legendary Turtle Traders and the famous experiment that made them millions. Curtis Faith, the most successful member of this elite group, breaks the silence to reveal the rules, timing, risks, rewards, and secrets to his biggest trades and 100 percent annual returns. Sharing behind-the-scenes insights and step-by-step techniques, Faith shows how you can use the Turtle Way to achieve enormous profits-whatever your skill level. “The most successful turtle was apparently Curtis Faith. Trading records show that Mr. Faith, who was only 19 when he started the program, made about $31.5 million in profits for Mr. Dennis.”-Stanley W. Angrist, The Wall Street Journal Curtis M. Faith was the most successful of the Turtles, earning more than $30 million for Richard Dennis while trading as a Turtle. He is one of the industry's leading pioneers of mechanical trading systems and software. Faith is currently head of research and development for Trading Blox, LLC, a company that specializes in software for trading system analysis and development. He also runs an Internet forum for mechanical system traders at tradingblox.com/forum. WAY OF THE TURTLE By CURTIS M. FAITH The McGraw-Hill Companies, Inc. Copyright ©2007 Curtis M. Faith All rights reserved. ISBN: 978-0-07-148664-4 Contents AcknowledgmentsForewordPrefaceIntroductionone Risk Junkiestwo Taming the Turtle Mindthree The First $2 Million is the Toughestfour Think Like a Turtlefive Trading with an Edgesix Falling Off the Edgeseven By What Measure?eight Risk and Money Managementnine Turtle-Style Building Blocksten Turtle-Style Trading: Step by Stepeleven Lies, Damn Lies, and Backteststwelve On Solid Groundthirteen Bulletproof Systemsfourteen Mastering Your DemonsEpiloguebonus chapter Original Turtle Trading RulesBibliographyIndex Excerpt CHAPTER 1 RISK JUNKIES High risk, high reward: It takes balls of steel to play this game. —Told to a friend before starting the Turtle program People often wonder what it is that makes someone a trader rather than aninvestor. The distinction is often unclear because the actions of many peoplewho call themselves investors are actually those of traders. Investors are people who buy things for the long haul with the idea that over aconsiderable period—many years—their investments will appreciate invalue. They buy things: actual stuff. Warren Buffett is an investor. He buyscompanies. He doesn't buy stock. He buys what the stock represents: the companyitself, with its management team, products, and market presence. He doesn't carethat the stoc