Turtle Trading... Thoughts?
- Thread starter cfree5119
- Start date
One site sponsor is thought to be an expert on the Turtles, and has several threads you can browse.
Let me share my experience with the turtle trading method.
I had backtested the turtle trading rules on currencies data. Below are my findings.
If you can follow the rules systematically over a reasonable period of time, you will be profitable. The rules work best or works only when there is a sustainable trend. The method performs badly when the price whips-saw or there is no definite trend.
On average, out of every 10 trades, you can only expect 3 or 4 trades to make the gains. In other words, the 3 or 4 winning trades are going to cover all the losses on the 6 to 7 trades plus profits. Do not expect a high percentage of winning trades using the turtle method.
The turtle method is profitable if you have the patience, adopt a reasonable long time frame and put a trade for every signal that comes along (the moment you get selective, you could miss a trade that is winning). The turtle method is good if you use it on mutiple instruments. In my back-test, I tested it on the 4 major pairs.
What i found for the turtle method is also true for any other trend-following methods. The method is secondary. The key is to adopt a systematic approach with pre-defined stop-loss and take-profit tragets.
I had backtested the turtle trading rules on currencies data. Below are my findings.
If you can follow the rules systematically over a reasonable period of time, you will be profitable. The rules work best or works only when there is a sustainable trend. The method performs badly when the price whips-saw or there is no definite trend.
On average, out of every 10 trades, you can only expect 3 or 4 trades to make the gains. In other words, the 3 or 4 winning trades are going to cover all the losses on the 6 to 7 trades plus profits. Do not expect a high percentage of winning trades using the turtle method.
The turtle method is profitable if you have the patience, adopt a reasonable long time frame and put a trade for every signal that comes along (the moment you get selective, you could miss a trade that is winning). The turtle method is good if you use it on mutiple instruments. In my back-test, I tested it on the 4 major pairs.
What i found for the turtle method is also true for any other trend-following methods. The method is secondary. The key is to adopt a systematic approach with pre-defined stop-loss and take-profit tragets.
Trend Following
Sponsor
I've often doubted your credibility, based partly on your recalcitrant demeanor and a somewhat slapdash reading comprehension, but I have to admit my assumptions about your expertise have often been wrong. Reluctant praise, hard to deliver.
This in particular is insightful:
it is not true in general that trend-following systems require lower win rate than short-term or intraday systems. That they require a lower win rate is based on the assumption that future trends will have at least the same magnitude on the average as past ones and the volatility of the market will remain about the same. We recall that in the period 2007 - 2009 there were several failures of trend-following systems although trends were there but the market volatility was too high. Many more losing trades during sideways volatile markets means that the value of R drops and the demand for a higher win rate w increases. Also, during periods that trends have smaller magnitudes, the value of R decreases, causing a demand for higher w. But, increasing the win rate w is not always easy, especially when volatility is high.