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Turtle trading system rules

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  • Turtle trading system rules

    Turtle trading system rules

    Position opening rules:

    1. We go on the breakout of the 20-bar high or low.
    2. Before the reversal to the opposite position on the breakdown of the 20-bar extremum, there must be a losing trade in the original direction of the trade.
    3. We always open on the breakout of the 55-bar extremum.
    4. (Subjectively) If the market is in a sideways movement, we enter only after the breakdown of 55-bar extremes.
    5. If there is a profit when trading in a certain direction, then you can continue to trade in that direction, but to trade in the opposite direction, you need a loss when trading in the previous direction.

    Stop rules

    1. On the day of opening a position, use a stop equal to 1/2 ATR. If the stop happened within the day, then, after exiting the position, you can reopen it if a new signal is received (prices made a new high or low).
    2. The next day after opening a position, use a stop equal to 2 ATR.
    3. Use a 10 day trailing stop. Sometimes the 10 day stop is too far. The 10-day trailing stop is designed to prevent you from risking more than 2-ATR on a trade (unless you open with a gap against your position).
    4. When a profit of 2.5 ATR is gained during the trade, move the protective stop to breakeven.
    5. After the 10-day trailing stop or the 2.5 ATR rule has pushed your stops into breakeven, start using the wider 20-day trailing stop.
    6. After you have reached a 10 ATR profit, use a 20-day stop or 3 bar pivot pattern as your trailing stop.

    Additional tricks

    1. Open additional positions upon the breakout of 55 daily extremes by moving the protective stop to the open position that is already at the breakeven point.
    2. After making a large profit of 10 ATR or more, do not trade in the opposite direction for 45 bars using the 20 bar breakout method. Use 55 bar breakouts instead.
    3. Wait for the sideways market to start trading on the breakout of 55-bar extremes.

  • #2
    Money Management Rules

    1. Do not risk more than 1% of your account on a single trade.
    2. Never risk more than 2 ATR.
    3. Use the technique of fractional position opening. Initially open 1/2 to 1/3 of the maximum position size. After prices have gone past the break-even point, buy or sell the next 1/2 or 1/3 of the volume. Most of the losing trades are from the very beginning. This method reduces risk and maximizes long-term profits.
    4. If you have opened a position, then add volume only after reaching the break-even point.
    5. Choose the strongest asset to trade.
    6. Trade when volatility falls. When volatility has decreased by 50%, it allows you to open more positions at the same risk.

    Notes:

    ATR is determined for 10 bars.

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