How to learn turtle trading?

Learning turtle trading properly takes 6-12 months. Most traders try to skip steps and fail. Don't.

Step 1: Learn The Rules (Week 1-2)

Read The Original Sources

Buy "The Complete Turtle Trader" by Michael Covel. It documents the original turtle system and their 1980s results.

Also read Curtis Faith's "Way of the Turtle." He was an original turtle and explains the system plus his personal trading psychology.

Understand The Core Rules

1. Entry: Close above 20-day high = buy. Close below 20-day low = sell. 2. Position Sizing: Risk exactly 2% of account per trade 3. Stop-Loss: 2x Average True Range below entry 4. Pyramiding: Add 1/3 position for every 2x ATR move 5. Profit Taking: Sell 1/3 at 3x risk profit, 1/3 at 6x risk, hold 1/3 6. Discipline: No modifications, no discretion

Do not move on to step 2 until you understand these completely.

Most traders rush through this. They think they understand then realize months later they're confused about position sizing or pyramiding.

Step 2: Backtest On Historical Data (Week 3-6)

Backtest means applying the rules to past data and seeing how many trades would have won/lost.

Method 1: Manual Backtest (Best for Learning)

1. Pick a stock/asset and download 12 months of daily data 2. Print the data or use Excel 3. Manually identify 20-day highs/lows 4. Mark entry points, stop-losses, targets 5. Track which trades won/lost 6. Calculate total return

This is tedious but teaches you how the system actually behaves.

You'll see: - How many false breakouts occur (annoying) - How many winners are huge (encouraging) - How many 3-trade losing streaks happen (testing your discipline)

After manual testing on one stock, you'll understand the system viscerally.

Method 2: Backtest Software (Faster)

Use TradingView, AmiBroker, or MetaTrader to run backtests.

This is faster but you don't learn as deeply.

Advantage: Test multiple assets simultaneously Disadvantage: Can't "feel" the system

What To Look For In Backtest Results

- Win rate: 35-45% (if you're seeing 70%+, your backtest is wrong) - Average winner: 3-5x average loser (if 1:1, system isn't working right) - Number of trades: 8-15 per month (if 0-2, the market isn't trending) - Maximum drawdown: 15-30% (if higher, system isn't working) - Total return: 12-18% annually (if 50%+, backtest is unrealistic)

If your backtest doesn't match these ranges, something is wrong.

Step 3: Paper Trade For 1-3 Months (Week 7-16)

Paper trading means tracking trades without real money.

This proves you can execute the system mechanically.

How To Paper Trade

1. Set up a tracking spreadsheet with columns: Date, Entry Price, Position Size, Stop-Loss, Target, Exit Price, Win/Loss 2. Every day, check if you should enter (price above 20-day high or below 20-day low) 3. When you get a signal, record it in the spreadsheet 4. Track the position until exit 5. Calculate total return

Why This Step Is Critical

Many traders think they understand turtle trading but can't execute