“Way of the Turtle”

[miki-elephant]

I think the book is great especially because it includes several trading systems.

In fact, I skipped almost the entire book but its systems part. Basic ideas of the systems are those you can see somewhere else too. But what amazed me is many of them employ a 350-day moving average. 350 days is more than a year, or more like a year and 6 or 7 months on a business days basis. I wonder how the author/Turtle people come up with that. Probably the answer is somewhere I skipped.

Since I just browsed the book (only the systems part) and did not test his/their ideas, I do not know how good the systems are. In addition, I feel it must be better to use some variable number adaptive to the market condition rather than 350, the fixed number. But I believe using large numbers (probably those adaptive) must be good for a system.

 

[BJL]

nice, you completely missed the point of this book.

 

[dtan1e]

Quote from BJL:

nice, you completely missed the point of this book.

so whats the point?

 

[detective]

Trend following doesn't work well these days, it was a strategy doomed to fail once Richard Dennis and the Turtles became famous and he had disciples doing the exact same thing.

Look at Dunn Capital, they have been nearly destroyed in the past couple years in trend following and they lost most of their AUM.

 

[ess1096]

Of the 50+ trading books I've read "The Way of The Turtle" has had the largest positive impact on my trading and the 350 day MA has absolutely zero significance.
Funny, I had given up on learning anything new from books but bought this book expecting an interesting story about the Turtles. I was pleasantly surprised.

 

[Buy1Sell2]

Quote from detective:

Trend following doesn't work well these days, it was a strategy doomed to fail once Richard Dennis and the Turtles became famous and he had disciples doing the exact same thing.

Look at Dunn Capital, they have been nearly destroyed in the past couple years in trend following and they lost most of their AUM.

??? Trend following is more viable as a strategy today than it has ever been.

 

[TheSorcerer]

Quote from ess1096:

Of the 50+ trading books I've read "The Way of The Turtle" has had the largest positive impact on my trading and the 350 day MA has absolutely zero significance.
Funny, I had given up on learning anything new from books but bought this book expecting an interesting story about the Turtles. I was pleasantly surprised.

really??? so do you recommend this book for a new trader??

 

[empee]

interesting. I have been using 350 day ma's for my systems before the turtle book came out, just because it seemed to be a better indicator (through backtesting) than 200, it gave more trades and still avoided the big selloffs (the ones that occur after a downtrend has started) Maybe they found that as well.

 

[miki-elephant]

Hi empee

> interesting. I have been using 350 day ma's for my systems before the turtle book came out, just because it seemed to be a better indicator (through backtesting) than 200, it gave more trades and still avoided the big selloffs (the ones that occur after a downtrend has started) Maybe they found that as well.

Thanks. Quite encouraging. Have good trading!

 

[dtrader98]

What makes the book great is that it covers (unlike most other ta books) the many pitfalls of backtesting systems and even admits to the practical reality of luck and chance in trading results. Few books cover the reality of applied systems TA the way this one does. Most books cherry pick optimal examples and ignore the universe of alternate outcomes; this one expounds on quantitatively dealing with less than optimal conditions.

As depressing as it may appear for TA systems, the author's ideas parallel much of the sober clarity reminiscent of taleb (black swan fame), regarding chance and luck in reality.
Given that framework however, he covers a lot of the tools and potential pitfalls used in trying to optimize trading systems around that fact.

Most readers may not have caught it, but it also confirms a lot of my suspicions from reading other successful bios (like livermore/pitbull etc) -- that a great but downplayed edge in many great traders was some inside information. I'm referring to a very small section whereby they knew something was corrupt in the meat markets and avoided them... Not to downplay his work, but most traders don't have edges like that. I get the impression they had a lot of feedback from inside the pits, even covering how they attempted to obscure their trades from (and the psychology of) greedy mms attempting to fade them. About the only single great trader I can think of that didn't have any inside connections was zanger (although, clearly he was in an insanely great bull period during his successful run).

All in all, a great read for someone looking for the reality of developing trading systems and demanding something more quantitatively objective than say oneill type ta books (subjective cherry picked examples galore leading neophytes to wonder why they don't always work on the thousands of other non ciscos).


The author did a great job of conveying potentially complex ideas (this could have been a dry theoretical textbook) in practical jargon that the average reader can understand. If you've been through the majority of TA books and are ready to understand system development and a good dosage of reality, this is a great read, and not just limited to trend following.