Today Everything Changes - Way Of The Turtle

Wow,  I’ve had an amazing week, groundbreaking to say it mildly. So what happened?  Reading this book has changed my trading life forever!

I highly recommend this and if you’re like me you will probably really appreciate the audio-book version ; )  My eyes are busy enough thankyou, lol.

Here’s a synopsis of what this book is about:  If you haven’t heard of Richard Dennis yet, he’s the guy that turned 400$ into over 200 Million by his mid thirties. He got an early start as a runner on one of the smaller exchanges in his late teens and became known later as “the prince of the pits”.

In 1983 Richard and his high school pal Ed were in Singapore visiting a turtle farm where there were thousands of turtles in a huge vat. They were having a longstanding argument about whether trading is something that can be learned or something you have to be born with the right skills.

Richard was so confident that he told Ed, “there’s one way we can settle this, we’re going to raise traders like they raise turtles in Singapore”.  The following year they put an ad in the Chicago Tribune advertising for traders and that each successful trader to go through their program would get 1 million dollars in trading capital.

They received 1000 applicants and broke it down to just 40 and then began interviews. 13 traders were accepted into the first training in 1984, the best and brighest was the author of this book Way Of The Turtle.

So how did it turn out?  You have to read the book to find out…

Just kidding, no cliffhanger - not everyone was successful from the beginning after the 2 week training period, only the author of the book Curtis M. Faith who was and remained the most successful turtle for the whole 5 year period. The others except for 3 who were cut all went on to average 80%/year gains for the next 5 years.

In my opinion Curtis is a very smart guy and I really appreciate his understanding and incites into trading psychology and irrational human behaviour. This book beautifully articulates cognitive biases that stop us from acting logically. In my opinion it is emotional trading which causes failure.

The title of this post is Today Everything Changes, the other night in my hammock as I was listening to the book and Curtis talked about his views on trading and the techniques used in Dennis’ strategy something totally clicked. I leaped up and turned on my computer and 6 hours later had manually backtested my new strategy for the last 8 months on the euro. The results?  Pure Magic!!  I’m not sure yet if I will be publishing this or not. (sorry a real cliffhanger, lol).

Ok, here’s a little something, what really clicked was when Curtis said that friends would always ask him what his view of the markets was and he said that he didn’t have any. And he really meant it, to him it was impossible to predict what would happen, the only thing that mattered were the probabilities.

That was part 1 of “the big click”, part 2 was related to the actual strategy that Dennis taught them which is basically a trend-following system that starts after a breakout. I see how that can do amazing for commodities and daily charts of currencies but I am interested in intraday trading. My intuition translated their long-term strategy into a brilliant short term strategy.

From now on, I am putting Ichimoku on the side. My energy is best when it is highly focussed and I will become a master of one thing. My new style means I am trading 90% mechanically and only 10% discretionary, no emotional-rollercoasters, just complete confidence in the probabilities with each trade.