Way of the Turtle: The Secret Methods That Turned Ordinary People Into Legendary Traders : 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-earning Turtle 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. Foreword......Page 5 Preface......Page 11 Intro......Page 13 RISK JUNKIES......Page 21 Traders Trade Risk......Page 23 Traders, Speculators, and Scalpers—Oh, My......Page 24 Panic in the Pits......Page 27 TAMING THE TURTLE MIND......Page 32 Emotional Rescue......Page 33 The Turtle Way......Page 40 Watching the Market State......Page 44 FIRST $2 MILLION IS THE TOUGHEST......Page 47 Class Begins......Page 48 Risk of Ruin......Page 49 The Science of Controlled Risk......Page 50 The Turtle Edge......Page 51 Expectation: Quantifying the Edge......Page 54 Trend Following......Page 56 Things Heat Up......Page 58 The First Report Card......Page 62 THINK LIKE A TURTLE......Page 64 It’s Not about Who’s Right......Page 65 Forget the Past......Page 66 Avoid the Future Tense......Page 67 Thinking in Probabilities......Page 70 Excuses, Excuses......Page 78 TRADING WITH AN EDGE......Page 80 Elements of an Edge......Page 81 The Edge Ratio (E-Ratio)......Page 82 The Trend Portfolio Filter Edge......Page 86 The Exit Edge......Page 88 Support and Resistance......Page 91 Finding the Edge in Support and Resistance......Page 95 Shaky Ground......Page 98 BY WHAT MEASURE?......Page 101 Risky Business......Page 102 Measuring What You Cannot See......Page 112 The Flip Side of Risk: Rewards......Page 113 Measuring Risk versus Reward......Page 114 System Death Risk Revisited......Page 121 Everybody’s Different......Page 122 RISK AND MONEY MANAGEMENT......Page 124 Don’t Believe Everything You Hear......Page 126 Risk of Ruin Revisited......Page 128 Turtle Money Management Means Staying in the Game......Page 131 Factor......Page 132 Rules for Estimating Risk......Page 135 TURTLE-STYLE BUILDING BLOCKS......Page 137 One Brick at a Time......Page 138 Want More?......Page 143 TURTLE-STYLE TRADING STEP BY STEP......Page 144 To Test or Not to Test......Page 145 Common Building Blocks......Page 148 The Systems......Page 149 The Results Are In......Page 156 Adding Stops......Page 158 The Results Are In Again......Page 160 LIES,DAMN LIES & BACKTESTS......Page 163 Trader Effects......Page 165 Random Effects......Page 170 Optimization......Page 175 The Optimization Paradox......Page 176 Overfitting or Curve Fitting......Page 184 ON SOLID GROUND......Page 190 Statistical Basis for Testing......Page 191 Existing Measures Are Not Robust......Page 193 Robust Performance Measures......Page 195 Regressed Annual Return (RAR%)......Page 197 R-Cubed: A New Risk/Reward Measure......Page 199 Robust Sharpe Ratio......Page 200 Representative Samples......Page 203 Sample Size......Page 205 Back to the Future......Page 207 Monte Carlo Simulation......Page 210 Some Like It Rough......Page 217 BULLETPROOF SYSTEMS......Page 218 The Unknowable Future......Page 219 Robust Trading......Page 220 Robust Systems......Page 222 Market Diversification......Page 224 System Diversification......Page 230 Facing Reality......Page 232 MASTERING YOUR DEMONS......Page 233 Live By the Ego, Die By the Ego......Page 234 Humble Pie,The Best Food for Traders......Page 239 Finding Consistency......Page 240 WHEN ALL IS SAID AND DONE......Page 244 Take Your Own Path......Page 245 The Track to Nowhere......Page 246 Learning Requires Failure......Page 248 Changing Paths......Page 249 On Money......Page 250 A Complete Trading System......Page 254 Markets: What the Turtles Traded......Page 258 Position Sizing......Page 260 Entries......Page 267 Stops......Page 271 Exits......Page 275 Tactics......Page 277 Finally......Page 282 Suggested Reading......Page 284 Trading War Stories......Page 285 Additional Readings......Page 286 Index......Page 288 "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."--Jacket