Way of the Turtle and Trading from Your Gut (Curtis Faith)
Trader's Library #36 · Trading methods and craft. An experiment that showed trading can be taught – but execution can't be taught to everyone.
Author: Curtis Faith · Original: Way of the Turtle; Trading from Your Gut · Year: 2007 · Usefulness for traders: ★★★★☆
What it's about
Curtis Faith was one of the youngest participants in Richard Dennis and William Eckhardt's 1980s experiment. Dennis claimed anyone could be taught to trade and trained a group of “Turtles” in trend following. “Way of the Turtle” describes those rules and why some participants made money and others didn't. “Trading from Your Gut” is about combining analysis with intuition.
What it gives a trader
The most important lesson: all the Turtles got the same rules, and the results were wildly different. What decided it was the ability to execute the system through long losing streaks. Faith also covers drawdowns, backtesting and the pitfalls of optimisation.
Lessons for traders
- not everyone can execute the same rules: psychology decides
- trend systems have long losing streaks and rare, big wins
- backtests lie if you fit them to the data (overfitting, Atlas of biases #57)
What to watch out for
A good deal of controversy has grown up around the Turtle story (including around the author himself). The 1980s systems in their pure form work worse today.
Discussion
The discussion takes place in Hetman Capital Club (in Polish). Join the discussion in the Club →
Navigation
← #035 Trend Following (Michael Covel) · Library index · #037 The Universal Principles of Successful Trading (Brent Penfold) →
Educational content, not investment advice. The book description is my own summary and assessment, not quotations. Edition details were checked in catalogues and bookshops, and where there was doubt I said so plainly.