The Turtle Way:
Systematic Trend Following
Don't predict the market—observe it. Master the mechanical rules that turned ordinary people into legendary hedge fund traders.
The Turtle Philosophy
The core belief of a "Turtle" is that you don't need to know where the market is going; you only need to know what it is doing right now.
Rule-Based: No gut feelings. Every entry and exit is pre-determined.
The Big Win: Accept small losses to catch the 1000% "monster" trends.
The "N" Factor: Using ATR to adjust size based on market volatility.
System 1: The Core Rules
Mechanical entries and defensive exits. No second-guessing the system.
The 20-Day Entry
Buy when price exceeds the high of the previous 20 candles. Sell short when it drops below the 20-candle low.
Pyramiding
Add another unit every time the price moves 0.5 ATR in your favor. Max 4 units per market.
The 10-Day Exit
Hard Exit: Close everything if price touches a 10-day low (for longs) or high (for shorts).
The "N" Formula
This is the most important part of the Turtle system. They never risked a flat amount. Instead, they standardized their risk based on Volatility.
标准化风险 (Standardized Risk)
Equity volatility must be smoothed, not the individual trade performance.
Turtle Trading vs. Modern Scalping
Trend following is a test of character, not reflexes.
| Feature | Turtle Trading | Day Trading |
|---|---|---|
| Duration | Weeks to Months | Minutes to Hours |
| Win Rate | Low (~30-40%) | High (~50-60%) |
| Profit Profile | Massive (Outliers) | Small (Scalps) |
| Psychology | Extreme Patience | Fast Reflexes |
Common Pitfalls
The Whipsaw Trap
Choppy markets will trigger constant entries followed by immediate reversals.
Second-Guessing Exits
Closing early before the 10-day low is hit prevents you from catching the "parabolic" win.
"The original Turtles only took a 20-day breakout if the previous 20-day breakout in that market was a LOSS. This filtered out choppy markets."