StrategyIntermediate#Trend Following#Historical
Turtle Trading
T
Definition
A trend-following system developed by Richard Dennis proving that mechanical trading rules could be taught to ordinary people for consistent profits.
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Concept Diagram
Key Takeaways
1
Turtle Trading proved mechanical rules beat intuition — ordinary people became millionaire traders.
2
Uses 20-day and 55-day breakout entries with ATR-based position sizing.
3
Win rate is only 30-40%, but winners are 5-10x larger than losers.
4
Crypto's trending nature makes breakout strategies especially applicable.
Practical Example
BTC breaks above its 20-day high of $98,000 on 3x volume. Turtle entry with 2% risk, stop at 2x ATR below ($93,500). The trend runs to $120,000 over 6 weeks — a 1:5 risk-reward trade.
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Related Terms
Strategy
Risk-Reward RatioA metric comparing potential loss to potential gain on a trade. A 1:3 ratio means risking $1 to potentially gain $3.
Strategy
Position SizingThe method of determining how much capital to allocate to a single trade based on account size, risk tolerance, and stop-loss distance.
Strategy
Mean ReversionA theory that prices tend to return to their historical average over time, making extreme deviations potential trading opportunities.
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