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 Post subject: Original Turtles Rules
 Post Posted: Fri Feb 18, 2011 4:13 pm 
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I though this would make an interesting topic for discussion so I decided to start a new forum topic for it.

If you haven't read the original turtles rules document please read it before continuing. If you're into technical analysis I promise you will not regret reading it.


I want to give others a chance to read the document before kicking off any discussion so I'll leave it a week or so before I start off. If anyone else wished to add anything please feel free to do so. I think it's a fascinating document and could potentially help to make us all better traders.

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Harry,
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 Post subject: Re: Original Turtles Rules
 Post Posted: Sat Feb 19, 2011 12:29 pm 
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Sorry Harry, but I couldn't wait!! I downloaded the PDF to my Kindle and read as a pdf, the first time I tried reading a pdf on a Kindle, it works OK, but I think it is better to get amazon to convert it ( sorry all off topic!!) . I read the Turtles rules with interest and I think one particular thing which they did which I hadn't heard of anybody doing is the idea of working out the position size dependent on the volatility of the instrument, thus all bets have nominally the same risk (as defined as the chance of the event occuring times the cost of the event occuring) , I think this is crystallising my ideas that I expressed in my post about Meaningful Position Sizing and reducing risk. Their way of calculating position sizing makes a lot of sense, it also ties in with setting a stop loss at a multilple of AVTR which is a measure of volatility. It is quite simple to work out, assume your account allows you to risk £30 per trade in monetary terms, assume the stop loss is at K* AVTR,
Position size = £30/(K*AVTR).
I think this is what they were doing, perhaps somebody can confirm.


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 Post subject: Re: Original Turtles Rules
 Post Posted: Sun Feb 20, 2011 11:36 am 
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Hi offthelip, now you have read the turtle rules will you be doing any backtesting using their formulas?
This pdf is great, I'm going to re-read it a second time today just to get my head around it properly but I think I am definately going to use their pyramiding rules in my own trades.
BTW otl, those amazon kindles are fantastic arent they!

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 Post subject: Re: Original Turtles Rules
 Post Posted: Sun Feb 20, 2011 12:33 pm 
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off the lip I think what you have written is correct. At least that's how I have understood it.

Spread betting trader I agree the document is fantastic. I'm with you on trying to incorporate the pyramiding techniques used. I'm also thinking to try and incorporate them into my super trend strategy.

Another thing I like the idea of is having a cap on ho much you can invest in one market at any one time. This also minimises risk by making sure you are not over exposed to any one particular market. I want to incorporate this into my super trend strategy. Since I'm only trading the FTSE 350 shares at the moment I was thinking to limit my exposure to any one sector to say a maximum of 10%.

I also like the idea of reducing the account size to risk every time your balance drops by 10%. For example starting with £1,000,000 if we lose 10% so £100,000 then we trade as if we had an account balance of 20% less than we started with so £800,000. We do this every time our balance drops by 10%. We can only increase the account size for risk when we reach our original account balance.

It's an exciting document with lots of good ideas. Whether or not it is the original turtles trading rules, I have no way of telling. If someone can confirm or deny this then please do.


Irrespective of whether it is the original rules or not it presents some very good ideas that I'm sure will help some on the path to successful spread betting, which is essentially why we are all here.

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Harry,
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 Post subject: Re: Original Turtles Rules
 Post Posted: Sun Feb 20, 2011 4:58 pm 
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OTL yes the position size is based on account size and market volatility.
I am just using the ATR(14) to set the stop loss and calculate position size.

I also like the idea of using ATR to pyramid in as the stock ramps up.
All I need to do now is determine which stocks are about to break their 4 week high.

I think the document contains the original rules. As it says they became upset when some of the turtles decided to sell the rules on.

Although the rules give some very important points to bear in mind the real lesson is in being able to follow the rules correctly. If you cannot stick to them then they become useless.

cheers
Andrew.


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 Post subject: Re: Original Turtles Rules
 Post Posted: Sun Feb 20, 2011 5:05 pm 
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SB Trader,
I don't have plans to back test their strategy at the moment, I have some things which I am trying to look at in the next couple of weeks. When I have done those I might come back to back testing the Turtles rules, but no promises/


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 Post subject: Re: Original Turtles Rules
 Post Posted: Sun Feb 20, 2011 5:29 pm 
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ok otl no probs.
What I have now discovered looking at my own account is that on top of my current open 3 pyramids I would have yet another 9 in place using their rules!
I will open some in tomorrow mornings trading.

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 Post subject: Re: Original Turtles Rules
 Post Posted: Sun Feb 20, 2011 9:44 pm 
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SB trader, didn't the rules also state no more than 4 contracts on a stock.
By opening more positions you are also breaking the rule where you entered another position at 0.5*ATR, therefore you have probably already missed the boat.

Well that's my interpretation.

cheers
Andrew.


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 Post subject: Re: Original Turtles Rules
 Post Posted: Tue Feb 22, 2011 1:50 pm 
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Hi Andrew,
sorry I meant 9 new pyramids into 9 different positions in stocks that havent already been pyramid into. If you know what I mean! ;)
With regards to missing the boat on 0.5ATRs, I'm not always at my desk so I'm going to have to use a little judgement on a night when I see positions have given me 0.5+ and trade them on the open next day.

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 Post subject: Re: Original Turtles Rules
 Post Posted: Tue Feb 22, 2011 7:50 pm 
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On second thoughts I guess not being at the computer is no excuse, as in theory you could set up new stop orders to automatically buy more when you place your original trade.

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