Hi Fellow traders.
Welcome to my Live test of the Turtle strategy.
This is not the first thread regarding the Turtle strategy & probably wont be the last.
But before I start, please do some research on the Turtle strategy to get a good idea of the rules & history around the most successful & famous trading program devised. If you don’t then a lot of what I will explain may go over your head.
My aim is to keep this extremely simple.
I have opened a tiny live account of only £100. This is my test account for the Turtle strategy. Now I can already hear traders familiar with this strategy saying “this cant be done with such a small account”. Well your probably right, but I do have more money to fund this account if I suffer a string of losses at the beginning. The original rules say you risk 2% & compound your position. This will be impossible with such a tiny account so I’ve made some exceptions to get this account rolling.
1 - I will use the minimum lot size of 0.01 per trade. The risk will vary depending on stop placement which is calculated basted on volatility(N). As an example: I may have a 150 pip stop which would result in 15% risk. I may have only 80 pip stop which would be 8% etc. The stop is calculated over a period of 20 days volatility by using ATR. We call volatility N. Initial stop loss will be 2xN (two times the market volatility).
2 - I will not be compounding this strategy until maximum risk is always 2.5% per trade. My account would need to be at a minimum of £1000 before I start to compound. Compounding means adding to a position. There are a few mathematical ways to compound your position. You could add to the position at HalfN, N or 2xN. As an example: N=50 pips. Adding to position with N would be every 50 pip move from previous entry (N). Stop would be 100 pips (2xN). What I like best is keeping risk between 2% & 2.5% which I will go into detail when the time comes. I would compound a max of 4 positions per pair traded. This will be done later.
Rule’s in a nutshell:
[I][B]1 - Enter when price breaks out of 24 day high/low - I use 24 period Donchain channel as I trade GMT which has 6 daily bars per week. This still equals 4 weeks. Some brokers have just 5 days depending where you are in the world. The calculation is still the same & in this case you would use a 20 period Donchain channel.
2 - Stop is placed at 2xN. This is quickly calculated using ATR(24). Set it at 20 period if you only have 5 daily bars per week. This shows us market volatility(N) at a glance.
3 - Manage stop every new day with (2xN) until stop reaches break even or price stops you out at a loss.
4 - Once stop is at break even, you need to manage using a 12 day breakout in opposite direction. I use a 12 day setting due to 6 bars per week. Again 10 day setting if you have only 5 day bars per week.
For longs, stop is placed 10 pips below twelve day low.
For shorts, stop is placed 13 pips above twelve day high. Manage each day until stopped out.[/B] [/I]
I wont go into compounding until that day comes. Hopefully sometime in the distant future.
This is a very simple strategy but sounds complicated to explain. To keep it simple stupid, I will upload an analysis video every few days or as necessary to explain each & every trade setup, entry & management.
This first video goes into detail - Turtle Strategy Live Account Test 26 Mar 2014 - YouTube
All future video’s will be kept short & sweet.
Please keep comments to this strategy only & I will answer any questions to the best of my ability.
Any help to answer questions from other traders who are familiar with the Turtle strategy is more than welcome.
Thanks to babypips & all who try to help others.
Tyrone.
donchian_channel.zip (1.06 KB)