Way of the Turtle: The Secret Methods that Turned Ordinary People into Legendary Traders (Hardcover)

by Curtis Faith (Author)
Key Phrases: risk junkies, portfolio filter, optimization paradox, Trading Blox, Donchian Trend, Monte Carlo (more...)

Editorial Reviews

Product Description

“We're going to raise traders just like they raise turtles in Singapore.”

So trading guru Richard Dennis reportedly said to his long-time friend William Eckhardt nearly 25 years ago. What started as a bet about whether great traders were born or made became a legendary trading experiment that, until now, has never been told in its entirety.

Way of the Turtle reveals, for the first time, the reasons for the success of the secretive trading system used by the group known as the “Turtles.” Top-earning Turtle Curtis Faith lays bare the entire experiment, explaining how it was possible for Dennis and Eckhardt to recruit 23 ordinary people from all walks of life and train them to be extraordinary traders in just two weeks.

Only nineteen years old at the time-the youngest Turtle by far-Faith traded the largest account, making more than $30 million in just over four years. He takes you behind the scenes of the Turtle selection process and behind closed doors where the Turtles learned the lucrative trading strategies that enabled them to earn an average return of over 80 percent per year and profits of more than $100 million. You'll discover

• How the Turtles made money-the principles that guided their trading and the step-by-step methods they followed
• Why, even though they used the same approach, some Turtles were more successful than others
• How to look beyond the rules as the Turtles implemented them to find core strategies that work for any tradable market
• How to apply the Turtle Way to your own trades-and in your own life
• Ways to diversify your trading and limit your exposure to risk

Offering his unique perspective on the experience, Faith explains why the Turtle Way works in modern markets, and shares hard-earned wisdom on taking risks, choosing your own path, and learning from your mistakes.

From the Back Cover

After nearly 25 years, the turtles come out of their shells.

Way of the Turtle takes a never-before-seen look at the legendary Turtle Traders and the famous experiment that made them millions. Curtis Faith, the most successful member of this elite group, breaks the silence to reveal the rules, timing, risks, rewards, and secrets to his biggest trades and 100 percent annual returns. Sharing behind-the-scenes insights and step-by-step techniques, Faith shows how you can use the Turtle Way to achieve enormous profits-whatever your skill level.

“The most successful turtle was apparently Curtis Faith. Trading records show that Mr. Faith, who was only 19 when he started the program, made about $31.5 million in profits for Mr. Dennis.”-Stanley W. Angrist, The Wall Street Journal

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Product Details

• Hardcover: 288 pages
• Publisher: McGraw-Hill; 1 edition (March 9, 2007)
• Language: English
• ISBN-10: 007148664X
• ISBN-13: 978-0071486644
• Product Dimensions: 9.1 x 6.1 x 1.1 inches
• Shipping Weight: 1.3 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars See all reviews (74 customer reviews)
• Amazon.com Sales Rank: #3,201 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

196 of 213 people found the following review helpful:

5.0 out of 5 stars Lessons From An Original Turtle, March 31, 2007

By	Brett Steenbarger (Naperville, IL USA) - See all my reviews (REAL NAME)

Curtis Faith's Way of the Turtle is a significant contribution to the trading literature. As other reviewers have noted, it works on several levels: It is an engagingly written first-person narrative of one of the most interesting experiments in trading, but it is also a thoughtful presentation of the various ingredients of trading success.

Faith spells out the Turtle trading method in detail, providing a template for a more general approach known as trend following. Most helpful is the way he breaks down the method into components: entry criteria, criteria for adding to positions, position sizing, stops, and exits. A particularly interesting chapter draws upon his Trading Blox software to update trend following research and illustrate the results of several systems in recent markets.

If I had to identify a single theme for the book, it might be this: Relatively simple trading systems can provide a tradable edge, but it is psychologically difficult for traders to follow these systems and exploit that edge. Faith illustrates this with the variability in the results among the Turtle trainees (despite the fact that all of them were given the same system rules). He also provides a detailed accounting of the psychological biases that make it difficult to follow systems that ride relatively few big winning trades for an overall positive expectancy.

Among the gems provided by Way of the Trader is a discussion of stop loss criteria and surprising research about what works and doesn't; a concluding chapter that lays out the Turtle rules in manual form, along with execution tactics; and an insightful presentation of the reasons most traders do not succeed in trading. Faith questions both discretionary trading--trading without systematically testing one's trading ideas--and the notion that trading systems eliminate emotions from trading. He makes it very clear that traders need an objective edge in the marketplace *and* the psychological fortitude to ride out inevitable drawdowns on route to exploiting that edge.

I don't think it's necessary that one be a dedicated trend follower to greatly benefit from this book. Besides being a fun and interesting read, it is an excellent introduction to the various components of trading methods and how they impact outcomes. It is also a first-rate integration of the psychology and techniques of trading. Perhaps most important of all, Way of the Turtle is an illuminating presentation of risk management and consistency, two major contributors to market success.

There are no glaring weaknesses to the book that I can detect. Personally, I would have enjoyed a discussion of the pros and cons of trend following at shorter time frames. I also would have liked a discussion of the capital required to properly implement the Turtle approach, given that success derives from holding a diversified portfolio. Those, however, are small quibbles when compared to the book's strengths. The author's chapter elaborating the Turtle method as a life philosophy is, by itself, worth the price of the text.

In short, Curtis Faith has written the definitive book on the Turtle experience and way of trading. It's hard to imagine anyone reading this book and not coming away from the experience impressed with the blend of research and psychological strength that goes into trading success.

112 of 126 people found the following review helpful:

5.0 out of 5 stars Best Trading Book Overall!, April 1, 2007

By	Biz Reader (OK, USA) - See all my reviews

This is one of the best overall trading books that I have read. The book covers the story of the Turtles, which for those who don't know was a group of people from different walks of life assembled out of a newspaper add to trade a system from two of the most successful traders in the world. This was done on a bet that these two guys could raise traders like people raise turtles, thus the Turtles. Curtis Faith, the youngest and most successful of the Turtles working for Richard Dennis at the time, starts out by telling his story from the selection process to trading as a Turtle in a brief history.

One of the more interesting aspects of the book was the focus on the psychology of trading. As a trader I can agree that psychology plays a large role in a person's success as a trader. Most books want to focus on the system and nothing else. The system is only one part of trading. The reason Curtis talks about one's psychology is that he said during the first month of trading as a Turtle he was the only one who stuck to the rules of the system! He said some of them just couldn't trade the system for one reason or another and eventually didn't make it. It was really interesting. Trading is a business that at times your mind will work against you.

There are 15 chapters in this 274 page book and here is a partial list of some chapter titles. Risk Junkies, Taming the Turtle Mind, Think Like a Turtle, Risk and Money Management, Turtle-Style Building Blocks, Turtle-Style Trading: Step by Step, Bulletproof Systems and Mastering Your Demons. In these chapters you will not only find what was originally taught to the Turtles but also some wisdom on different types of systems and what it takes to be a successful trader. There is a different look at position sizing and risk management from what most others teach along with all the original rules to trend following the way that Richard Dennis and Bill Eckhardt taught the Turtles. It is well written in a simple manner that gets to the point. Included are also some personal notes about Curtis' life and some business ventures that have not been as successful as his trading was.

All of that said this is not like some other books that are full of hype and don't reveal anything about actual trend following rules. This book lays out how to trend follow along with the realities that trend following ain't as easy as it sounds. Curtis mentions in the book how at one time he had a 70% drawdown and still kept trading the system!

Just a personal note here. A few years ago I had bought a package from Russell Sands, another one of the Turtles, on the Turtle method of trading and spent if I remember correctly around $200. This book is a bargain compared to that and it also includes some aspects that were not covered by Mr. Sands. I believe this book will be of benefit to anyone who is serious about learning more about trading and they will learn some stuff about themselves in the process. I highly recommend it.

114 of 130 people found the following review helpful:

1.0 out of 5 stars One of the Five Worst Trading Books Ever Written, August 5, 2007

By	M. Dooner (Ottawa, ON Canada) - See all my reviews (REAL NAME)

Here are some of the key reasons why this book is simply a poorly written/edited and ineffective trading book:

1. Chapters do not build on one another. The story goes back and forth, between hazy descriptions of technical trading tools, bizarre charts poorly explained, then back to the Turtles story, including amazement about how not every turtle could follow the rules except the author. Back and forth. Back and forth.

2. Anecdotal wisdom. Stuff you see in every book, from every investor/trader. Don't follow the herd. Know yourself. Forget about the past. You can't predict the future. Don't let past losses upset you. Is the author getting paid by the cliche?

3. Author references his own websites and company, and also heavily references the author with the 'big' blurb on the front cover. That would be Van K. Tharp who calls this "One of the five best trading books ever written". There is no corelation between this quote and the author citing Van Tharp throughout the entire book. I would like to see a chart on those probabilities in this book.

4. Misleading and contradictory title. Throughout the book, the author presses on the point that there is no secret method, that people want to believe a secret method exists because then they wouldn't have to admit to themselves that they psychologically do not have the capacity to trade effectively. Then the book is titled "The Secret Methods..." I guess that kind of title sells better.

Also on contraditions - there are no methods in this book. Just general descriptions of basic technical trading tools that one can find by googling the subject. The worst part is that the descriptions aren't even fully developed. The examples are weak, and the 'gestalt' of using multiple technical trading techniques collaboratively, as a system, is not covered adequately.

5. Book is not practical. The examples and the methods used by the author to trade do not fit 99.99% of all investor profiles. In fact, they only fit the profile of someone who can afford to lose a rich person's money as part of a social experiment.

In conclusion, I would say that the main problem with this book is its focus. If the book was biographical in nature, and covered the interactions and emotions on the floor with the other Turtles, and covered specifically the psychological aspects and nothing else, it could be a somewhat interesting read. As an investment book, it does not work, and is aggravating.