Tuesday, March 24, 2009
Trading the Turtle way
Category: Trading Topic: About a trading book
I've just finished reading The Turtle Way by Curtis Faith, and I'm going to re-read it, now.
In the 1980s, one famous trader, Rich Dennis, bet another, Bill Eckhardt, that traders are made, not born, and he could make anyone into a successful trader. Curtis Faith was one of those selected to be trained by Rich Dennis, and became the most successful of all the Turtles, as they were known.
The book presents the trading rules the Turtles were taught. For me, the book is much more valuable for describing how to trade successfully. In brief, this is what you do:
1. Develop the rules for a trading system
2. Backtest the system
3. If the backtest shows the system to be profitable, apply the rules.
As Curtis Faith observes, beginners think that step 1 is the hard part; experienced traders know that step 3 is what separates successful traders from unsuccessful ones.
Rich Dennis knew this, too. He's quoted in the book as saying that he could put his rules in a newspaper but most people still wouldn't follow them.
The book points the reader to someone who clearly understands the importance of step 3 - Mike Taylor. I had a fascinating time browsing Mike's pages.
Once the book on domain modeling is out of my hands, I'll be restarting work on my backtester!
