Way of the turtle begins with an explanation of the initial Turtle Trading experiment. This 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 Turtles.

Curtis M. Faith, the youngest member of the original Turtle group, wrote way of the Turtle. It contains 278 pages not including the index forward and preface. The well-respected trading coach Van K. Tharp authored the preface and stated, “[Way of the Turtle] is one of the five best trading books ever written, and I will recommend that all my clients become familiar with its contents”.

Way of the Turtle Contents

• Chapter One – Risk Junkies
• Chapter Two – Taming the Turtle Mind
• Issues of psychology and the traders mind are talked about
• Chapter Three – The First $2 Million is the Toughest
• Chapter Four – Think Like a Turtle
• Chapter Five – Trading with an Edge
• Chapter Six - Falling of the Edge
• Chapter Seven – By what Measure?
• Chapter Eight – Risk and Money Management
• Chapter Nine – Turtle-Style Building Blocks
• Chapter Ten – Turtle-Style Trading: Step-by-Step
• Chapter Eleven – Lies, Damn Lies, and Backtests
• Chapter Twelve - On Solid Ground
• Chapter Thirteen – Bullet-proof Systems
• Chapter Fourteen – Mastering Your Demons
• Bonus Chapter – Original Turtle Trading Rules

The book takes a non-technical approach to explain key trading issues, by that I mean concepts are presented descriptively rather than quantitatively. This will definitely appeal to readers who do not have a technical background and makes for much easier reading.

The first chapter delves into the different market participants by focussing on the different trading styles of the hedger, scalper and speculator. Curtis also talks about the trading pits of Chicago and their death. This is a very brief coverage and as is most of the book geared towards futures traders. Psychology of trading and different market states are briefly touched upon, before looking at some simple technical indicators. .

Later chapters go through the risk of ruin, expectation, money management and gaining an edge for your trading. Throughout these chapters, indicators and statistical measures are introduced that are helpful in evaluating system performance. The money management section was very limited in scope, however this was deliberate Curtis states “Others have devised complex formulas and written entire books about money management. It shouldn’t be that complicated”.

There are six trading systems compared and contrasted in the book they are:

1. ATR Channel Breakout
2. Bollinger Breakout
3. Donchian Trend
4. Donchian Trend with time exit
5. Dual Moving Average
6. Triple Moving Average

Lies, damn lies and backtests, was by far one of the books stand out chapters and is something anyone considering buying a trading system or a black box system should read before making a decision. The bonus chapter rounds out the book by detailing the original turtle trading rules; this material has been around on the internet for a while.

Way of the Turtle is a must read trading book for the new trader it is full of wisdom and insight. The intermediate trader will derive less value from this book as a fair portion of the book is devoted to some of the basic trading concepts. That being said the pragmatic and structured approach in which ideas are presented allows for even the most advanced trader reading this book to gain knowledge without being bored. This book covers a lot of key areas in the development and testing of a trading system and provides an insider’s view of the Turtle trading experiment. I enjoyed the candour and openness of Curtis’s epilogue and the fact that he can readily admit his failures and talks about the issue of learning requiring failure. I would highly recommend this book to anyone considering a career as a trader.

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One of my favourite quotes on the subject of failure:

“I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.” Michael Jordan

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