 Amazon.com: The Complete TurtleTrader: The Legend, the Lessons, the Results: Books: Michael W. Covel
ISBN: 0061241709 |
The turtle trading experiment came about after a dispute between Richard Dennis and Bill Eckhardt on the issue of weather great traders were born or made. Dennis had the view that an individual could be taught to be great trader while Eckhardt thought great traders required genetics and aptitude. In order to settle the matter ads were taken out in the Wall Street Journal, New York Times and Barron’s. The ads were for the position of trading apprentices and after an initial training period the trainee would be given an account to trade. Out of a thousand applicants 13 were selected, these trainees were known as the Original Turtles.
In the Complete Turtle Trader Michael Covel investigates the story of the turtles. The book takes a pragmatic and extremely well researched look at not just the turtle experiment in isolation but explores the events that took place directly before and after the turtle experiment.
The Complete Turtle Trader Contents
- Preface
- Acknowledgments
- Chapter 1 - Nurture versus Nature
- Chapter 2 - Prince of the Pit
- Chapter 3 - The Turtles
- Chapter 4 - The Philosophy
- Chapter 5 - The Rules
- Chapter 6 - In the Womb
- Chapter 7 - Who Got What to Trade
- Chapter 8 - Game Over
- Chapter 9 - Out on Their Own
- Chapter 10 - Dennis Comes Back to the Game
- Chapter 11 - Seizing Opportunity
- Chapter 12 - Failure Is a Choice
- Chapter 13 - Second-Generation Turtles
- Chapter 14 - Model Greatness
- Appendix I: Where Are They Now?
- Appendix II: Related Websites
- Appendix III: Turtle Performance Data
- Appendix IV: Turtle Performance While Trading for Richard Dennis
- Endnotes
- Index
- About the Author
In the early chapters, the book investigates the origins of the turtle experiment and the mastermind or “Prince of the Pit” behind the turtle experiment. A look at Dennis’s early life gives a good perspective of his core beliefs and by the age of 24 Dennis had already made $100,000 1973 dollars and was getting attention from the Chicago papers.
The turtle’s selection and training process is discussed at length giving you an almost fly on the wall insight. Dennis’s hiring process seemed to be somewhat unorthodox however given the nature of the interview and questions asked it was clear certain characteristics were required of potential turtles. It is clear from the outset that this was not a serious scientific experiment as the sample size was too small and there was clear sampling bias:
Self-selection bias, which is possible whenever the group of people being studied has any form of control over whether to participate. Participants’ decision to participate may be correlated with traits that affect the study, making the participants a non-representative sample. For example, people who have strong opinions or substantial knowledge may be more willing to spend time answering a survey than those who don’t.
Source http://wikipedia.org/
The core or middle chapters of the book delve into the philosophy, the rules, the trading experience and the end of the experiment. Covel outlines the original trading rules in the most simple easy to understand presentation of the turtle rules I have seen to date. These rules are complemented with the eleven “Trade your own account tip[s]”.
The final chapters look at the turtle’s performance when the experiment finished and the second-generation turtles. It is very interesting to see the turtles that continued to trade successfully and those that did not. The addition of the profile of a second-generation turtle adds weight to the turtle story. The fact that someone who was never involved in the original experiment can apply the rules so successfully is a testament to the system.
The Bottom Line
Having read Curtis Faiths book I thought I knew the turtle story, however I could not have been more wrong. If you want to gain an objective well researched and thoroughly enjoyable insight into the turtle trading experiment Michael Covel’s The Complete Turtle Trader is the only book on the market to provide this. Throughout the book, Covel gives the reader a brief historical context of events that occurred in the period that is being discussed. Younger readers like me will find this to be helpful. Although the book is very detailed and well referenced at no time does the pace slow down, even when details of the system are discussed in chapter five. This is a must read trading book and is written so well that it can be read by someone with little trading experience yet it will not bore the seasoned professional. I should note a great source of resources is the authors blog Turtle Trader.
Popularity: 38% [?]
December 11th, 2007 at 4:09 pm
I agree the book was without question the most anticaped book, I could possibly ever imagine.
This has been my religon and my blood,This has been the most gravataing addiction I has faced in my life. TT.
Mikes bring to light how generational experiments blend and meld. Yet you didn’t tell the whole story.
J -Nash.
December 11th, 2007 at 5:01 pm
Johnathen,
I totally agree with you, Mike gives an enormous amount of detail in his book about the experiment, the individual personalities and the conflicts. It would be impossible for me to capture all of this detail in a review. Another aspect that I found interesting in the book was how much Bill Eckhardt was involved in the turtles training.
I would be very interested to hear if you have implemented a trading system using the turtle rules. You can e-mail me at editor at traineetrader.com or post a follow up comment.
Cheers
Mark
December 11th, 2007 at 10:29 pm
I started out trading using the Turtle trend following rules. I was moderately successful in that I didn’t blow-up! I have subsequently purchased some brilliant software from WealthLab which makes backtesting trading strategies fairly easy. In addition, there is a great optimisation routine. Now I know all the arguements about curve fitting etc, but believe me, the basic Turtle 55/20 entry/exit rules are WAY OFF optimum (by whatever ratios you care to study - eg profit, profit factor, recovery factor, win/loss ratios etc) for the majority of commodities. For instance, if you leave it 20 days lowest low to exit Cocoa, you will never make money. There are one or two futures markets where the Turtle rules are robust. What is interesting is that I discovered through analysis, that some commodities could not even be traded over time with a trend following approach, and yet others are incredibly robust, and over time, you cannot fail to make money by trading simple trend following rules applied to these commodities. For some commodities, many of the ratios (profit, profit factor, win/loss, recovery factors etc) optimise at around particular entry/exit rules. These are what I call robust. These are the commodities that I trade relatively aggressively.
December 12th, 2007 at 11:21 pm
David,
Thanks for your input; I too have heard good things about wealth lab and it is fairly well priced. I will be taking it for a test drive when I have a bit of time to spare. As you pointed out it is very important to thoroughly test any system before implementation. I am glad that you have had success identifying rules that give you an edge.
Cheers
Mark
December 13th, 2007 at 2:21 am
Thanks for your comments Mark. WealthLab has to pick up data from a stand alone data base. The one that I use for WL is QuoteMonkey by Primate. Its very easy to install and update the data, and I had no problems linking it up with the WL software (I think it one WL recommend). It too is not expensive ($230 per year for daily data).
The other comment that I would like to make on trent following trading is that all the trading ratios (profit factor, win/loss, recovery etc) vastly improve when you trade in the direction of the longer term trend. This sounds obvious, but when you are looking for opportunities it can be tempting to trade in this way, which is ok if you adjust your rules, and/or accept that the odds are worse.
Thanks, David
December 16th, 2007 at 1:26 am
Hello Trainee Traders,
I stumbled on you via the Entrecard you dropped on me. Thanks for that and this book recommendation.
Story of Turtle Traders sounds like a very intriguing one. It is interesting to read about an experiment where 2.3% of people (not 1.3%) were given an opportunity to “play” with $1M of 1983 dollars. That fact alone make this a curious if not controversial book.
Some book reviews on Amazon point out that trade-following system is as of today rather outdated (David here also indicates some of his negative experiences with the system). Rather, merit of the book appears not to be the system itself, but the methodology of the experiment as well as the psychology of the experimenters and participants.
I wonder how good could the trade-following system be exercised in younger stock markets.
What are your thoughts on this?
Cheers!
Shonzilla
December 17th, 2007 at 10:28 am
Shonzilla,
The story of the turtles is a very interesting one; the book’s emphasis is providing an accurate well referenced account of the turtle experiment. As with any system you have to do a bit of independent research. As for your question I don’t believe that trend following systems are irrelevant in todays market, however as David pointed out it is important to test the strategy yourself and ensure it meets your requirements.
Cheers
Mark
December 17th, 2007 at 12:11 pm
Shonzilla, you make a good point here:
“…merit of the book appears not to be the system itself, but the methodology of the experiment as well as the psychology of the experimenters and participants.”
I posted some excerpts from an online afterword tonight on my blog. Much of the excerpts go to your point.