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The Art and Way of the Turtle Trading Rule

In 1983, cashbackinforex Singapore sea turtle farm, two god-like traders Denn Forex rebate king, Eckhardt had a disagreement E God said, traders are born; D God said, like this vat of sea turtles, traders can be trained   So, D God pulled out the white silver, to do experiments, to bet they in the Wall Street Journal, the New York Times The D gods are going to start a training course, giving each person a $1 million account, h forexrebateindonesias-on teaching, regardless of profession, without experience, can be enrolled more than a thousand people submitted resumes, 40 people into the interview, 23 people were left to examine, 13 people into the training course These 13 people from all walks of life, most of them have no cashback forex experience, is a group of ordinary people who have not yet succeeded they were trained for two weeks, and then put out to trade in the next. Then put out to trade, in the next four and a half years, set an average annual return of 80% training content, called the "Turtle Trading Law"; training students, known as the Turtle Although some people question the randomness of the sample, this experiment should be counted D God victory can not throw darts Trading is only two kinds, the first, do more first buy, wait for the price to sell; the second, do short first sell, wait for the price to fall and then buy in the decision When deciding when to enter a trade, most novices adopt a strategy similar to throwing darts at a trend chart, purely by luck. This is a concept borrowed from game theory, it is a probability, referring to the casino than the gambler is more likely to win you if there is no chance of winning in the game, a long time will certainly lose trading in the same way trading strategies do not necessarily have a chance of winning, but the transaction itself must have costs, commissions, bears, computer fees, data fees…… these costs may emerge every day, the rapid accumulation into Quite a burden only the odds of winning, in order to allow you to support and stand up The three elements of winning the Forexrebateking: can not be normal To hand the odds of winning, you have to choose a good entry point, in the strike point, the market should be abnormal it makes you happy probability to exceed the normal market; specifically, in this time you want to stay in the market, the price to be more obedient to your wishes, in the direction you like to move Each type Each type of trading strategy has a special venue suitable for play, for example, trend following is suitable for the trend of stable markets, counter-trend trading is suitable for back and forth fluctuations in the market first to choose the right special venue Entry, exit: door to door then, you give these strike points with a suitable exit point if the right match, you can make the power double if obviously not suitable, but also hard to put together, the original strike points will be spoiled simple To put it simply, to maximize profits, you need to make the entry and exit strategies match. The entry strategy is to make money in a few days, the exit strategy should be for a few days; the entry strategy wants to make money in a few decades, the exit strategy should also be on the order of a few decades; the entry of trend following should be matched with the exit of trend following; the entry of swing trading should be combined with the exit of swing trading; the strike of day trading should be combined with the exit of day trading day trading retreat together with the strike…… (see lesson 2 for the above trading strategy terminology) Different strategies have different timeframes, with the wrong pair, we have to lose all our money Trading is like boxing To sum up, a win, there are three elements: market, strike point, retreat point Choose the market, also known as asset allocation (portfolioselection), choose Suitable for the implementation of trading strategies of special venues, like the practice of plum pile must have piles, specific trading strategies require a specific market state which is useful, referred to as the use; choose the strike point, also known as entry signals (Entrysignals), choose the best time for the formation, referred to as on; choose the withdrawal point, also known as exit signals (Exitsignals), fight enough to close the troops, retreat early The retreat point, also known as the exit signal (Exitsignals), to fight enough to close the army, retreat early, not open, withdrawn late late in the day, this is referred to as running trading strategy is like boxing will only paddle look, nothing unusual; really understand, in order to excel know what place can be used, what time can be on, when to run the following, we will introduce the turtle trading law of trading strategy, and borrow the basic concept of the win rate of analysis we can just follow the paddle, you can also go to understand it with, on, running, and more can apply the concept of win rate. You can also apply the concept of win rate to develop your own trading strategy, to study the use of your own strategy, on, and run The turtles trading strategy Use of market selection: The turtle trading law uses a market filter method, called trend market filter (trendportfoliofilter), only if the average volatility of a market within 50 days exceeds the 300-day average When the average, that is, fluctuations in the trend, can be considered in this market to do long-term trading; and for the 50-day average volatility of less than the 300-day average of the market, only small fluctuations, can only consider short-term trading turtle using the trend tracking method belongs to long-term trading, so we only choose the former market with fluctuations in the trend up to kill the enemy and withdraw to choose the strike point and retreat point: the turtle took called Donchian channel Breakout method (Donchianchannelbreakout), when the price reaches the 20-day high, buy; reach the 20-day low, sell Sometimes we will use the buy way to enter the market, sell and retreat; sometimes use the short method to enter the market, buy and retreat, depending on the market performance Strategy analysis sharpshooter win rate good and bad Analysis of trading strategies, the essence is to analyze the market in a particular market, enter the market and retreat. If you choose a good place to use and the time to go, the next price fluctuations should often make people happy in order to further analysis, we will be divided into two kinds of price fluctuations: good, bad If the price moves in the direction of making people happy, this direction is good, and vice versa is bad, for example, you buy first, waiting for the price to sell, at this point up is good direction, down is the bad direction as shown in the following chart, after buying, the price may first small drop, then a big rise, then a small drop, then a small drop, you will be unhappy - happy - unhappy - unhappy (for the chart used in this article, we would like to thank to put the chart in the culture of CITIC Press and its translator Qiao Jiangtao, thanks to Sina Aiqiu provided the electronic version) Finally, a comprehensive look, if the price moves farther in the good direction than the bad direction, you happy will be more than unhappy, this strategy is to have a chance of winning, the winning rate (edgeratio, E-ratio) is equal to the maximum distance moved in the good direction (maximumfavorableexcursion, MFE) divided by the maximum distance moved in the bad direction (maximumadverseexcursion, MAE) in the figure In the graph, the MAE is on the left and the MFE is on the right. Normally, we would calculate the odds ratio over a certain length of time; if it is 10 days, the odds ratio is written as E10-ratio, and if it is 30 days, the odds ratio is written as E30-ratio. In this stochastic trading strategy, the corresponding E5-ratio is 1.01, the E10-ratio is 1.005, the E50-ratio is 0.997, and the E70-ratio is 1.001. These numbers are all very close to 1, because at any given time, the probability of it moving in the good The probability of it moving in the bad direction is about the same as the probability of it moving in the bad direction And for strategies with a chance of winning, the result is no longer close to 1: Pick a market + random strike and retreat points: if the appropriate market state is filtered out first according to the turtle rule, and then the trade is randomized, the E70-ratio will change from 1.01 to 1.27, and the chance of winning becomes bigger all of a sudden Randomized market + pick strike and retreat points: if do not filter out the appropriate market state, but follow the turtle rule to pick the time to enter the market only when the price reaches the 20-day high, E20-ratio becomes 1.15, E70-ratio becomes 1.20, and the chances of winning become larger The following graph shows the change of the strike point E-ratio, which has two characteristics, first, it is less than 1 at first, and when the time reaches a certain length, E -ratio only rises above 1 this is why it is necessary to choose the door to the right retreat point, if withdrawn early, it is likely to lose money; second, it is more volatile and not stable Choose the market + choose the strike and retreat points: if both filter out the appropriate market state and enter the market at the special strike point, the E70-ratio rises to 1.33, the E-ratio is shown below, it is very similar to the previous chart Very similar, but more smooth, not too much volatility, this is because we choose the right market, so that the strike and retreat can be played steadily Technique and Road To sum up, say a little bit of mystery, this lesson has a technique and a road Technique: The concept of the winning rate The winning rate is the good volatility divided by the bad, greater than 1 will have a chance of winning The Turtles trading strategy trend market filter, in the 50-day average volatility greater than the 300-day average, then prepare Enter the market; Tangchian channel breakthrough method, buy when the price reaches a 20-day high, sell when it reaches a 20-day low Trail: Using the win rate analysis of the turtle trading strategy strike point takes a period of time to play, the retreat point can not be too early, the market filter can make the strike and retreat to play steadily Trail: Develop your own trading strategy, pay attention to the selection of the use of the place, the timing of the battle, the retreat strategy, using the win rate Analyze their role and understand the interaction and cooperation of the three
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