is the "way of turtle "out of date? | Forex Factory

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is the "way of turtle "out of date?

  • #1
  • First Post: Nov 20, 2018 8:09am Nov 20, 2018 8:09am
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i make the E A according to the Turtle's rules,but the backtest (2004-2017) shows that it wont succ.
is the turtle way out of date?
  • #2
  • Nov 20, 2018 12:49pm Nov 20, 2018 12:49pm
I read somewhere lately a piece by a quant analyst that suggested turtle-style trading still produces a small positive net result if traded across a whole basket of markets but the profits are tiny compared to the Richard Dennis & original turtles trading experience in the 1980s.

This guy's tests also suggested that the period that the original turtles traded in was the best for that strategy compared to market conditions before and since, i.e. they traded in the golden time for this strategy. I don't find this terribly surprising - Dennis would have formed his strategy in the light of what he saw at the time and he did it well, obviously. But, as we all know, times change and we must all adapt or die.

Clearly, in general, markets are more choppy with less long, smooth trends than back then and it is catching and riding long, strong trends that underpins the turtle strategy profitability. Choppier markets rapidly chops away at the profits.

So, to answer your question: Is the turtle way out of date? Depends whether you think more long trending market conditions will return. Or not.
  • #3
  • Nov 20, 2018 4:32pm Nov 20, 2018 4:32pm
Quoting chineser
{image} i make the E A according to the Turtle's rules,but the backtest (2004-2017) shows that it wont succ. is the turtle way out of date?
Of course it is out of date. This trading strategy is obsolete just like all trend following strategies.
If it was so easy, everyone would make millions from trading. Because this type of mechanical strategies are based on linear logic and simple rules, they are very very easy to automate. But if you look at the stats and around forums you will not be able to find even one trader who is consistently profitable with such type of strategy.

I personally debunked and disproved for myself all popular strategies from books and forums many years ago. None of them work. They all have negative expectancy per trade.

The Turtle system WAS profitable 40-50 years ago on some markets.
  • #4
  • Nov 20, 2018 4:41pm Nov 20, 2018 4:41pm
Quoting alphaomega
{quote} Of course it is out of date. This trading strategy is obsolete just like all trend following strategies. If it was so easy, everyone would make millions from trading. Because this type of mechanical strategies are based on linear logic and simple rules, they are very very easy to automate. But if you look at the stats and around forums you will not be able to find even one trader who is consistently profitable with such type of strategy. I personally debunked and disproved for myself all popular strategies from books and forums many years...
Yes. Adapt or die.

In order to be profit in market these days, you need to trade like a Market Maker, i.e. long and shot at the same time. Because at the end of the day, market always win.
  • #5
  • Edited 9:46pm Nov 20, 2018 9:26pm | Edited 9:46pm
Quoting alphaomega
{quote} Of course it is out of date. This trading strategy is obsolete just like all trend following strategies. If it was so easy, everyone would make millions from trading. Because this type of mechanical strategies are based on linear logic and simple rules, they are very very easy to automate. But if you look at the stats and around forums you will not be able to find even one trader who is consistently profitable with such type of strategy. I personally debunked and disproved for myself all popular strategies from books and forums many years...
Buy and Hold is dead for sure in the trading world but not in the investment world as dollar cost averaging (passive investing) is how wealth grows in our retirement accounts.... even during corrections for those with a 10+ investment horizon.

With that said, "Trend-Following" simply cannot be dead. It depends on your perspective on how you define a trend. To me, price has to move from A to B to make a profit regardless of whatever strategy you incorporate. For A to move to B, Price has to Diverge from Mean (mean being your entry point) and Diversion from Mean is what I consider a Trend Following System even if you are trading a range-bound market, a diversified portfolio, scalping, swing trading or whatever style you chose to incorporate. Divergence from Mean is the universal element (ingredient?) required for any trading strategy to move your account into profitability. That's the only way I see the markets..... even if you are trading a reversal or a bounce or whatever style. My 2 cents so feel free to ignore my rambling.
Staying in my lane...
  • #6
  • Nov 21, 2018 1:34am Nov 21, 2018 1:34am
Quoting VEEFX
{quote} Buy and Hold is dead for sure in the trading world but not in the investment world as dollar cost averaging (passive investing) is how wealth grows in our retirement accounts.... even during corrections for those with a 10+ investment horizon. With that said, "Trend-Following" simply cannot be dead. It depends on your perspective on how you define a trend. To me, price has to move from A to B to make a profit regardless of whatever strategy you incorporate. For A to move to B, Price has to Diverge from Mean (mean being your entry point)...
Dude,

Where have you been? We thought we lost you forever...

Thanks
  • #7
  • Nov 21, 2018 12:33pm Nov 21, 2018 12:33pm
Quoting alphaomega
{quote} Of course it is out of date. This trading strategy is obsolete just like all trend following strategies. If it was so easy, everyone would make millions from trading. Because this type of mechanical strategies are based on linear logic and simple rules, they are very very easy to automate. But if you look at the stats and around forums you will not be able to find even one trader who is consistently profitable with such type of strategy. I personally debunked and disproved for myself all popular strategies from books and forums many years...
Turtle Soup strategy is more profitable than the turtle system.

it is invented by LBR
  • #8
  • Nov 21, 2018 12:43pm Nov 21, 2018 12:43pm
Quoting alphadude
{quote} Turtle Soup strategy is more profitable than the turtle system. it is invented by LBR
this one? here via Google
Staying in my lane...
  • #9
  • Nov 21, 2018 12:44pm Nov 21, 2018 12:44pm
Quoting aaven
{quote} Dude, Where have you been? We thought we lost you forever... Thanks
Hello brother Aaven. Hope you are doing well. I have been around... just not so noisy and preaching as in the past. As my signature says, I am minding my own gaps :-
Staying in my lane...
  • #10
  • Nov 21, 2018 1:08pm Nov 21, 2018 1:08pm
Quoting VEEFX
{quote} this one? here via Google
thats the one. the idea is mean reversion against turtle trend followers

Go against their position. Have them for dinner.

Inserted Video


Inserted Video
  • #11
  • Nov 21, 2018 1:14pm Nov 21, 2018 1:14pm
I tried a one week demo EA of a turtle type strategy. It worked beautifully.
Maybe people don't want to pay for EA's that work.
  • #12
  • Nov 21, 2018 6:40pm Nov 21, 2018 6:40pm
Quoting OutThere
I tried a one week demo EA of a turtle type strategy. It worked beautifully. Maybe people don't want to pay for EA's that work.
the turtle way book said their win ratio is low,one week means nothing
  • #13
  • Nov 21, 2018 7:50pm Nov 21, 2018 7:50pm
Quoting chineser
{quote} the turtle way book said their win ratio is low,one week means nothing

Looked like a nice ratio to me.
Must be a hare in turtle's clothing then.
You read the book, I will play the EA.
It's on the list of Xmas gifts...to myself.
  • #14
  • Nov 21, 2018 8:13pm Nov 21, 2018 8:13pm
The turtle strategy is a stock strategy in the first place. Using it on 24h forex markets probably a bad idea.

Also I've investigated the fund returns of the original super-star turtles. All of them had 20%+ returns in the 80's, but their returns have been getting lower and lower over the years. Now it's mostly in the single digits, sometimes in the teens. This is lower than the performance you'd get if you put your money in an index fund.
  • #15
  • Nov 21, 2018 9:13pm Nov 21, 2018 9:13pm
I'm glad we are gifted the ability of forward testing, otherwise we would have to rely on the opinions of others!
  • #16
  • Dec 10, 2024 7:44pm Dec 10, 2024 7:44pm
Not out of date. Most just trade it wrong. Hardest part of setting an ea for it is defining how to profile the market.
  • #17
  • Dec 11, 2024 9:04am Dec 11, 2024 9:04am
It will always work for a very simple reason: diversification of assets. There will always be a trend out there.
But the main criterion for a trend following approach to work is the universe of markets: it must be very broad. No less than 70/80 different and uncorrelated assets.
This involves a considerable cost for a retail trader, it is an approach that works for highly capitalized traders or professionals.

Most of the operations will be negative, from a psychological point of view an automatic approach is preferable because managing 75% of losing operations is not easy. The annualized return of similar systems can even reach 20%. Another important thing is the management of volatility and therefore the correct sizing of the position. Because there will be more volatile and less volatile assets but all operations must give the same "weight" to the main portfolio.

For a retail trader, considering the cost of managing 70/80 minimum futures and the related yield, it is an inappropriate approach to the markets in my opinion. I'll happily leave that to the professionals.
  • #18
  • Last Post: Dec 11, 2024 8:48pm Dec 11, 2024 8:48pm
Quoting Altopium
It will always work for a very simple reason: diversification of assets. There will always be a trend out there. But the main criterion for a trend following approach to work is the universe of markets: it must be very broad. No less than 70/80 different and uncorrelated assets. This involves a considerable cost for a retail trader, it is an approach that works for highly capitalized traders or professionals. Most of the operations will be negative, from a psychological point of view an automatic approach is preferable because managing 75% of losing...
Absolutely, it's obvious that he has not read the Turtle methodology and how they applied it; you cannot simply apply the math of it to a single FX pair and expect it to work, not logical.

Imagine starting the portfolio a few years back and including Bitcoin into the mix, pretty sure that would carry it through to profits.

You said it: I'll happily leave that to the professionals.

And me too. Cheers

It takes a lot for me to IGNORE you, but you can try.
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