hey hey what’s up my friend so in today’s training you will discover an enhanced turtle trading strategy that has been back tested over the last 20 years and here’s the results of it okay and in this training video i will share with you the exact trading setup right the entry the exit the risk the risk management the markets to trade so on and so forth right the full strategy will be shared with you but first right some of you might be wondering hey rayner what is the total trading about who are these you know turtle trailers that that i’ve hear you know so often so let me share with you a story so back in the 1980s right there were two traders right richard dennis and william eckhart and they they had a bet with one another richard believes right that trading can be taught he believes that i can just you know pick up someone random from the street share with him my trading rules and that guy can be a trader whereas on the other hand william he doesn’t believe that trading can be taught it’s something that either you have it or you don’t so clearly they both have a slight disagreement so in order to find out who is who is right or wrong they decided to do an experiment so what it did is that they hired a group of traders random people on the street right to just come for an interview with diverse backgrounds some could be an accountant some could be a gamer whatever right they just came in for an interview answer a series of questions and they selected a few of them for the experiment and this group of traders they are called the turtle traders they are known as the turtle traders so they went through a two-week training program where richard and william taught them everything they know about trading they taught them their trading strategy the rules the risk management and so on and after two weeks they went on their own to trade richard’s money right i mean amazing right you’ve got free trading education you’ve got money to trade yeah so they so they went on their own to trade the markets using uh richard’s money and maybe william i’m not sure yeah and how did they fare all right so that’s the question so what’s interesting is that this group of turtle traders they did exceptionally well right they went on to make triple digit returns right over a number of years in the 1980s so that experiment experiment right you can conclude that yes you know richard he won the band right is that trading can be taught but at the same time right william didn’t necessarily lose the bet as well because if you fast forward let’s say 20 30 years to today right now the total traders right most of them are no longer trading the markets only a handful of them are still in this business so yes you can say that in a way right not all of the total traders right have a lasting career in trading so in a way not everyone can be a trader okay so at this point right many people were wondering okay man so what were the total trading rules about right how is it so profitable you’re making triple digit over a number of years and that’s what you’re about to find out right now i’m going to share with you the original turtle trading rules sounds good then let’s get started so the original turtle trading rules okay uh it’s this right it’s very simple you buy when the price breaks above the 20 day high your stop loss is 280 from your entry price your trailing stop loss is the 10 day low this means that you know when you buy the breakout and if the price you know goes in your favor and then it starts to retrace or pull back if it breaks below the 10-day low you will exit the trade your risk management is percent of your trading account so the markets that the original total traders trade right are this bunch of markets right you know they trade the bonds and interest rates commodities energy and currencies so let me share with you an example right of how this trading setup looks like so i’ve got my chart over here okay so remember the turtle traders right they buy when the price breaks above the 20-day high so how do you define the 20-day high i mean you can look at your chart you can eyeball and find out you know did the price breaks out of the 20-day high right you can just do it or to make your life easier you can use a tool like the donchian channel so let me explain briefly how donchian channel works so this line over here this upper blue line okay basically plots for you the 20-day high so you don’t have to do the manual calculation yourself just see this blue line and it tells you know where is the 20-day high and likewise this blue line over here is the 20-day low so if you think about this right from from here okay let’s say from here all the way down to here right where is the 20-day high at this for this uh this section over here okay if you look at this blue line right it says that the 20-day high is at this point over here so this means that this particular candle over here has the made the highest high over the last 20 days and this candle over here okay made the lowest low over the last 20 days that’s how it works so clearly you can just go back in time okay if you look at this now where is the highest high over the last 20 days clearly it’s not made by this candle it’s actually made by this candle over here this one here so the the candle this one over here right mid is the high over the last 20 days so at this point this current candle did not break above the 20-day height because the 20-day high is at this point which is drawn by this blue line over here but on the next candle you see the wick right the upper wick has now touched the blue line this tells you that the price has now made a 20-day high make sense okay so now this is a valid trading setup as the price has made a 20-day hike so what you’ll do is that you’ll buy on the next day open so when the market open the next day okay on this red candle you go long you buy on this candle you buy over here and at the same time this particular candle also make a 20 day high which is not surprising okay so anyway on this candle you’ll go long on the open and your stop loss if you remember is 2 atr and it’s again very simple just pull out the atr indicator okay and just find out what is the 2 atr value okay so if you look at it right now the current atr value is about 148 but let’s make my life easy let’s say it’s 150 points so 280r is just multiplied by 2 is equals to 300 points so what happens is that your stop loss right is 2 atr so very simple right let’s say the market opened at this price which i let’s say it opens at 2800 okay let’s say the market opened at 2800 on this candle over here 2800.
so your stop loss right just 2800 minus 300. why 300 because 300 is two times the average true range or the value and your initial stop-loss is 2500 make sense which is somewhere about here that’s the initial stop loss so now if you recall right it says that if the price does move in your favor you will trail your stop-loss using the 10-day low so again this candle you open and you can see at the market yep it did win in your favor okay so now now the question is how do you trail a stop-loss so again uh to find out what’s the 10-day low you can just adjust the dungeon channel settings from 20 you just change to 10 and now what happens is that this upper blue line is the 10-day high and this lower blue line is the 10 day low so all you are looking for is for the price to touch the lower boundary of this blue line if it touches it it means that the 10 d 10 day low has been hit so you fast forward okay and over here yep you see over here this particular candle right this green candle over here it has touched the lower portion of the blue line it means that the 10-day low has been hit so what you’ll do is your exit on the next day’s open which is this candle over here so you exit on this candle over here this doji looking candle is where you exit your trade okay so this is how the uh original turtle trading rules work this is the uh so called the uh setup or their rules okay so now that you have an idea let’s find out how did it perform so number of trades over the last 20 years right is about 4 300 winning rate about 36 percent but the annual return right it’s negative 0.
38 percent maximum drawdown is negative 95 oh my goodness doesn’t sound too good right and if you want to look at the data over here you can see that this is the original turtle trading rules the back test results from 20 2000 to 2019.
you can see that generally this uh system right doesn’t seem to be working in today’s market condition you can look at the equity curve right you can see that it’s pretty much in the drawdown even up to today so clearly this is a system that you don’t want to be trading but but first i disclaim the original turtle trading rules there is slightly more complex they not only trade the 20-day break up they also trade the 55-day breakout they also skill in their trades all right as the price moves in their favor but i’ve decided to keep things simple and just share the 20-day breakout without scaling it because again you can do the advanced and complex stuff but the results is still going to be the same it’s not going to be profitable so rather you know keep things simple and uh and uh guide you from here okay so clearly this particular trading system isn’t working so does it mean that turtle trading is there does it mean that trend following is there to answer that question right we need to ask ourselves right so what is total trading about and if you think about this right total trading is just simply trend following so it’s simply you know buying high selling higher and riding the trend for as long as possible so let’s revise back and look back what are the principles of trend following and once we have defined the principles and then let’s see how we can improve on things so first and foremost the principles of trend following is that you want to buy high and sell higher at the same time you want to sell low and cover lower uh number two you risk a fraction of your capital on each trade this means that you know even if you have a loss right the loss shouldn’t you know take up a huge chunk of your trading capital number three you want to trade a variety of markets from different sectors like you know bonds currencies interest rates agriculture commodities etc as many different markets as possible you want to incorporate them number four you want to trail your stock laws to write the trade and number five don’t predict just react so you can see that the original total trading rules or strategy clearly has you know meet these principles of trend following right most of them but i would say there is still room for improvement for example they originally risk two percent on each trade to me that’s pretty high especially for trend following system that doesn’t have a high win rate so what we’re going to do is we’re going to reduce your risk on each trade uh next thing right they trade a variety of markets yes maybe in the 1980s that were all the markets that they have but in these days right you have so much more markets right you know 50 60 70 markets it’s not a problem right especially in the futures market and so let’s you know take this right and improve on it so this will be the new enhanced turtle trading strategy so now what we’ll do is that instead of buying the breakout above the 20-day high we’ll go with the 200-day high why is this right and the reason is simple right recent years market has been choppy right you know there’s a lot of false breakouts so what we want to do is to trade the longer term breakout so we don’t get caught right by all this false breakout next thing right stop-loss is still the same 280 from your entry price trailing stop-loss will keep it the same 10-day low but the risk management as mentioned right we will risk one percent of your account because two percent previously as you’ve seen is quite aggressive right especially for a shorter term breakout trade as well so we’ll reduce our risk to just one percent of our account on each trade and vice versa for short trades next thing the market is now you know in this day and age we have access to so many more markets so let’s make use of it right as that’s one of the principles of trend following we will trade all these different markets over here i think previously we had about 20 20 plus markets now we almost double it to like you know 40 plus maybe even 50 markets over here okay so let’s have an example let’s look at an example of this enhanced turtle trading strategy so for this one over here again the breakout here is the 200-day high so what we will do is just change this to 200 and the donchian channel will help you plot out right the uh 200-day high and low this blue line over here is the 200-day high and this blue line at the bottom is the 200-day low so now the question is all right we will only buy when the price breaks above the 200-day high so the next candle over here which is this you can see that clearly this candle has broke above the 200-day high right and this candle now actually shifted right and made a new 200-day high on the dungeon channel as you can see over here so yes the price has now meet our criteria a 200-day has been formed so now we’ll enter on the next day open so next day open which is this candle here we go long on the next day open okay which is that is at this price point over here around 1.
37 and then our stop loss is just 280r so very simple just pull out your atr indicator okay pull this one out oh it’s already there okay then you can see that the value right now is about 90 pips right so 90 pips multiplied by 2 is 180 pips so you just take the opening price which is let’s say 1.
37 you minus 2 atr which is about 180 pips minus 280r and let’s say you get the value is y so just you know calculate it yourself right and you the the y value would be your initial stop loss okay so simple stuff i’m not going to walk you through the math again and then if you recall right the trailing stop loss is the same it’s just the 10 day low so this is where if the price moves in your favor in this case it did just adjust the dungeon channel to number 10 so you can easily identify the 10 day low and wait for the price to hit the 10 day low so you can see that the 10 day low has caught up with the price and not yet heat okay still not hit yet okay aha over here you can see this candle over here the price now has made a new 10 day low so this is where you exit the trade so you exit on the next day’s open which is on this candle over here this candle over here you exit the trade because on this candle you made a new 10 day load so you exit your trade right on the next day’s open okay so so now now that you have an idea how this uh strategy works the question is what are the results i mean i mean you know it’s going to be positive right because i shared you and i shared with you at the start right but uh to let’s break it down further so number of trades you can see is reduced right earlier we had about four thousand three hundred trades now we have close to three thousand right less trades less false breakout less commissions nice winning rate has improved to 40.
95 percent and no return has been boosted to 32 and your max drawdown is reduced to 41 so to look at it uh the full breakdown you can see over here uh this is how the trading system has performed over the last 20 years over here you can see that generally this is a still a profitable trading system okay this is the equity curve over the last 20 years as well and you’re going to see the fine details like you know the annual return you look at the max drawdown you want to see your losing rate your winning rate the details are all here on this on this spreadsheet over here so as you can see here yes right uh turtle trading the the system right if you do some slight tweaks and modification it can still work in other words trend following it still works today so two important lessons that i want to share with you number one the concept is more important than the trading strategy so what do i mean by this so a trading concept can be trend following it can be mean reversion trading so one trading concept you can build multiple trading strategies around it you can build multiple for example the trend following concept you can build multiple trading strategies around it okay so once you understand the concept then you know how you can fix things you know how we can improve things because for someone who just come across the original total trading rules and you see that oh it doesn’t work they just claim it doesn’t work right and say you know turtle trading is it trend following look at the turtle traders right there rules doesn’t work anymore but no if you think about this if you understand the concepts behind it you can actually tweak it and to see whether is it really dead or is it just for that particular set of time frame it doesn’t work okay so clearly the concept is more important than the trading strategy and if you understand the concept right you know what are the things to tweak like for example trend following you can tweak the markets traded the risk management you can tweak your entry uh breakout timing you can even tweak your trailing stop loss if you want to but if someone who doesn’t understand the concept guess what they’ll tweak they’ll edit the macd indicator rsi indicator right they’ll add in all these funny lines and stuff to make to to curve it the system to their own you know liking and preference and that clearly is a recipe for disaster so the concept is important it’s even more important than the strategy itself number two you must manage your risk this is so important because you can take a profitable trading strategy and ruin it right with lousy risk management let me give you an example so earlier you’ve seen right that the enhanced turtle trading strategy it works right one percent on each trade now what if you risk four percent in state on each trade how would things change again right just have a look at this spreadsheet over here i have it over here enhanced four percent you can see that right now this profitable trading strategy is pretty much destroyed by poor risk management yes you have massive returns in certain years but when the drawdown come right you pretty much went bust you can see over here on this equity curve you can make a lot within a short period of time but when the losses come and you don’t have proper risk management you will give it everything all and more so you can see that uh this one annual return 75 amazing but if you look at a drawdown it’s 96 you almost lost everything while trading this strategy so risk management is also key don’t neglect your risk management all right so with that said right uh if you enjoy this training and you like to learn more systematic trading strategies that work then here’s what i recommend right go down to uh my website over here this one is called the pullback stocktradingsystem.
com over here and i want to share with you right a simple pullback stock trading system right for the stock markets and you can see this is the equity curve over the last 20 years okay i’m going to ship you a physical trading booklet right that looks like that looks like this okay ship it to your doorstep and i want to give it to you for free just all i’m asking is just cover the shipping cost for this booklet if not i’ll go broke right okay so if this type of system systematic trading interests you then go down to the website pullbackstocktradingsystem.
com the link it’s over here i’ll put it below as well and get this trading booklet it’s a 31-page trading booklet i’ll share with you the rules the entry same as what i’ve done in this video so with that’s it i wish you good luck and good trading i’ll talk to you soon you