Turtle Forex Trading Methodology System
Trading system is based on Trend Follower concept taught by Richard Dennis. The Turtle Rules core requires a trading system to have 6 things.
Turtle trading system is a system created by Richard Dennis. In the early 1980s Dennis became famous thanks to his success. With an initial capital of no more than $ 400 he was able to double it to more than $ 100 million. Dennis is a graduate from DePaul University selling with a BA. Postgraduate degrees are obtained from Tulane University before joining the Chicago Board of Trade.
Dennis initially observed the breeders fighting the turtles. The unique way the breeders demonstrate is to make sure whether the turtle child survives or not.That is by entering them one by one into the water. Turtles that drowned were eliminated by the cage because they were considered unable to live long. While those who survive and swim are considered capable and maintained for sale later.
Then in 1983 Dennis recruited 13 students who were also known as ” The Turtles” who came from different backgrounds even those who did not have prior investment / trading experience. The goal is to prove that by following a certain rule in trading, one can ‘learn’ to be successful in trading. Each student was entrusted with managing the same amount of funds and was ordered to follow a rule set by Dennis, also called the Turtle Rules. Uniquely, despite having the same rules, the students gave different results. The training program ended in 1988 and some of the Turtles became successful traders and some failed.
Turtle Rules Methodology
Trading system based on the ‘Trend Follower’ concept and taught by Richard Dennis or commonly known as turtle rules, requires a complete trading system to have 6 things, namely:
1. Market – what to buy / sell The first thing to pay attention to is what market we will trade, or in other words in the world of forex, like which currency pairs we will play. This includes diversification, which can be interpreted as how many types of currency pairs we will play.
2. Size / Volume / Lot – how much to sell / buy. The size of how much to sell / buy affects diversification and money management. Practically the maximum number of Open Positions allowed.
3. Entry / Open – when to open a Position. If we have created a sophisticated system, then the system will give us a signal when the best time to enter the market.
4. Stop – when to close a position (in a loss) Turtle rules says that traders who do not want to close positions when they lose will not last a long time.
5. Exit – when to close a position (in a state of profit) In addition to determining the loss limit, the turtle rules also require determining when to exit at a profit.
6. Tactics – how to buy and sell the ins and outs of how to open a position also need to be taken into account, considering in certain circumstances sometimes our transactions are in a waiting status until the profits come in (floating loss status)
From here we can illustrate, that Turtle Trading System System is Trend Follower system or follow Trend. The point is if you want to make a profit don’t fight the Trend.
At the age of 25 Dennis became a millionaire (USD millionaire) – in 1983 he recruited and trained 13 people known as ‘The Turtles’. When the Gray Monday (Black Monday) occurred in 1987, Dennis suffered an unexpected loss of $ 10 million and totaled $ 50 million during the period 1987-1988. One thing to note is that Dennis did not always practice the Turtle Rules that he taught his students.