originalturtles.com....how reliable are they ?

[mcovel]

What credentials or authority has Michael Covel got?

My background is easily found. In terms of my influences, those are easily found too:

Influences Michael Covel: Trend Following Manifesto

Below are multiple statements from original Turtles about my book "The Complete TurtleTrader"

"I did enjoy the book...I hope it's doing well for you."
Original Turtle Tom Shanks

"The book was wonderful..."
Original Turtle Michael Shannon

"Liked it. Congratulations on a job well done."
Original Turtle Jeff Gordon

"Book is very good...thank you for going for the truth and objectivity."
Original Turtle Lucy Wyatt

"Nice book."
Original Turtle Russell Sands

"All in all, not bad. I wish it had never been done and I wish I were not in it, but I know that you were definitely going to do it, so I figured I would try to get the truth out as much as possible. By and large, it worked that way."
Original Turtle Jim DiMaria

 

[trendie]

the book you mention, for example, does not name another Turtle by name.

I dont need a list of other Turtles by name. It wont help me position-size correctly. From the freely available Turtle rules.

The book you mention does not list the month by month performance numbers of the Turtles while trading for Dennis.

Guess I will have to do some work for myself rather be given it on a platter. Month by month performance wont help me ensure that i dont trade correlated markets. Something I picked up fromt he freely available Turtle rules.

The book you mention does mention that the author's only money management firm after the Turtle experiment ended in a CFTC investigation and major losses.

Was that by following the Turtle rules, or by not following Turtle rules. If the former, then your course offering is on shaky ground. If the latter, it tells us that he should have stick to the original Turtle rules, which are available freely.

"Way of the Turtle" explores curve-fitting, and how to look for it. Position sizing. all these things. also, the fact you have to stomach many, many small losses waiting for the outlier trade.

By your own reasoning, ie, because Faith may have had a company fold, as an attempt to undermine his credentials as a Turtle, you shouldnt be trusted to give a course on Turtles until you have run a billion-dollar fund.

The rules are still freely available.

You would do better by running a thread placing Turtle trades, and letting us see them unfold in real-time. Otherwise the more cynical people amongst us might get the idea you're just here to push your latest book.

 

[mcovel]

If the rules, freely available as you seem to repeat for the slow of foot, was all that mattered then there would have been many more successful Turtles. There are larger issues at play over the rules. That is what my book goes into. In terms of "pushing" a book, you seem clearly to be doing such. I am offering a response to people unaware that your comments are incomplete about the Turtle story and Turtle success.

 

[trendie]

If the rules, freely available as you seem to repeat for the slow of foot, was all that mattered then there would have been many more successful Turtles. There are larger issues at play over the rules. That is what my book goes into. In terms of "pushing" a book, you seem clearly to be doing such. I am offering a response to people unaware that your comments are incomplete about the Turtle story and Turtle success.

okely-dokely, neighbourly-deighbourly.

 

[neil]

Follow the FREE rules..

okely-dokely, neighbourly-deighbourly.

Go for the free rules...many people are aware that you can give a group of traders the same rules yet observe that all will have varying degrees of success or lack of it.

 

[mcovel]

Go for the free rules...many people are aware that you can give a group of traders the same rules yet observe that all will have varying degrees of success or lack of it.

The issues are much larger than this. Rules tell you an extremely small aspect of the Turtle story and as this thread shows much of that story is still not known.

 

[meanreversion]

The turtle method should be used with extreme caution. The first detailed set of trades Curtis Faith gives in his book where he followed the method (after the opening chapter) shows SIX MONTHS of small losses before the breakout occurred. I would suggest that for 95 pct of traders, this would be too mentally debilitating.

There is too much focus on trying to catch these enormous trends, which let's be honest, don't happen very often. What about small trends? If I buy EUR/USD and it moves up 200 pips, that's enough of a trend for me, I will take profit.

Turtle style trading is for people with very deep pockets and an incredible ability to withstand enormous drawdowns; I wouldn't recommend it to anyone.

Don't forget that Richard Dennis and Curtis Faith ultimately suffered large losses on their own portfolios.. they just happened to get to a very large number first, at which point they could effectively retire.

 

[mcovel]

The turtle method should be used with extreme caution. The first detailed set of trades Curtis Faith gives in his book where he followed the method (after the opening chapter) shows SIX MONTHS of small losses before the breakout occurred. I would suggest that for 95 pct of traders, this would be too mentally debilitating.

There is too much focus on trying to catch these enormous trends, which let's be honest, don't happen very often. What about small trends? If I buy EUR/USD and it moves up 200 pips, that's enough of a trend for me, I will take profit.

Turtle style trading is for people with very deep pockets and an incredible ability to withstand enormous drawdowns; I wouldn't recommend it to anyone.

Don't forget that Richard Dennis and Curtis Faith ultimately suffered large losses on their own portfolios.. they just happened to get to a very large number first, at which point they could effectively retire.

This is an incomplete and inaccurate view on several fronts. There are reasons why Faith (not a trading success by any known measure) and Dennis crashed (which I have discussed extensively). There are also reasons why many other Turtles and Bill Eckhardt have done well for years (with track records to prove it). Turtle trading is trend following and there are no shortage of top trend followers at this for 20+ years trading successfully. In terms of volatility and drawdown singling out trend following as mentally tough seems rather odd considering what buy and holders are sitting through since last fall. We can agree to disagree, but your view is the party line for those who don't really get trend following or the performance it generates.

 

[meanreversion]

I've been trading for over 15 years and have experimented with different approaches. Quite clearly trend following can generate astonishing profits, I don't deny this. However, one has to be patient and expect drawdowns. I guess my style of trading is 'swing' these days, I find it suits my temprament and I don't want to feel as though I need to be on every single breakout in case I miss the big one.

As for 'buy and hold', this is not a trading strategy. I'm still astonished that more real money funds didn't hedge on the way down.. e.g., stocks are down 10 pct with indicators all bearish, why not buy some puts? But I guess they didn't.

My original text was not anti-trend, it was merely pointing out some of the more onerous characteristics and that it might not be for everyone. The vast majority of members on trade2win are under-capitalised and looking for fairly instant gratification, trading on a 1hr timeframe or less.

 

[mcovel]

...looking for fairly instant gratification, trading on a 1hr timeframe or less.

The sure way to losing even more capital!

 

[meanreversion]

Yes, I can think of other things to do in under 1hr with instant gratification, but that's another story altogether.

 

[amnonco]

posted it elsewhere...here is more appropriate.

Originally Posted by mcovel View Post
Is the comparison "Way of the Turtle" to "Trend Following" or "Way of the Turtle" to my second book "The Complete TurtleTrader"?

I've read all 3 and the so called original rules.
and there are several points:
1. if someone was more entertained reading one over the other - that's subjective as are my comments.
2. I read the other thread you commented on (this one), listen, your TF book, is interesting, and it's definitely thorough, but it doesn't have technical details on TF. you have stories and past performance about every successful TFer, you wrote about biases and mental issues, and it seems you wrote that to prove a point which is - TF works! here's why! don't buy&hold. ok, BUT.
3. yours and faiths books (Wot and TCTT) are different. you're telling a detailed story (the politics of asset allocation, the recruitment etc.), and to make it understandable for lay(ish) readers you explain briefly the method with general examples.
his, is the other way around. it's a technical guidebook for TF (explaining different kinds of setups and exits - and not just the originals (such as ATR breakouts, MAs), position sizing, diversification, curve fitting & backtesting) and in the midst of that, there's his personal story (the truth of which, isn't meaningful for the rest of the book). OK - you emphasize greatly on the mental side of TF - which is why he wasn't successful later on, but you can read "you have to think successful to be successful" in many other books not even about trading (new age included).
4. there are some discrepancies between WoT and TCTT and the original rules. such as
- how many units they traded per market? what's loaded? the rules state 4, you say 5.
- what was the portfolio management/diversification method?- the original rules state 6 units in closely correlated, 10 in not correlated and 12 long/short overall, faith mentions this, you mention that bill taught them how to calculate (long-short/2 or the other way around) and that's it.
- pyramiding - both faith and the original rules state pyramiding every 0.5N - you say it was every 1N to keep the 2% risk (before the memo)

to sum up - yours are more fitted to the general public as a review of TF (TF) or as the story behind the turtles (TCTT) but his is more fitted for traders looking to expand their toolbox and open their minds.

cheers

 

[mcovel]

OK - you emphasize greatly on the mental side of TF - which is why he wasn't successful later on, but you can read "you have to think successful to be successful" in many other books not even about trading (new age included).

Thanks for the feedback. Fair enough. I do disagree with you that the "mental" side is as simple as you state. In the case of the Turtles there were many behavioral circumstances, occurring over many years, that directly affected performance. To not properly analyze those issues, and fall into "I only need technical rules and research" mode, misses at least 50% of the Turtle story and lessons.

 

[mcovel]

there are some discrepancies between WoT and TCTT and the original rules.

In researching my book other Turtles stated that Faith was either using or allowed to use other rules not privy to other Turtles. Here is an excerpt from my book "The Complete TurtleTrader":

However, as long as the risk Faith was taking was within the parameters, this was not considered a big deal. DiMaria was quick to correct that view: “No, not within the parameters. That was sort of the standing joke. There were parameters and then there were Curtis parameters. He just got to do whatever he wanted. It’s as if the whole thing was decided on ‘who knows what?’ criteria. Who were going to be the good traders and who weren’t? And returns be damned. It was totally fundamental. It was, ‘Mike Cavallo, he’s like the smartest guy in the program. We got to give him a lot of money.’ I was at the other end of the spectrum. Maybe because I was a control person and they thought I wasn’t going to be anything.” Mike Cavallo, who viewed the allocation process as a meritocracy, did end up having some questions, too. He thought Dennis was partly awarding trading aggressiveness, placing bigger bets with Turtles he thought were trading better, but even Cavallo could not understand Dennis’s decision- making logic when it came to Faith. He said, “It seemed like Curt was trading too aggressively and too riskily and yet was getting rewarded for it. He was making the most, although probably not on a risk- adjusted basis. So at the time, it was just sort of puzzling. I’m not particularly a jealous person, so I wasn’t too worried about it.” Cavallo knew Dennis had become very successful as a very young man by taking big risks. The implication was that Faith was Dennis’s chosen one. Others said the C&D brain trust were enamored with the fact that Faith was so young. It became increasingly apparent that the whole subject of allocations issues was just an entry into the central sticky issue of the program: favoritism. The disparity began almost out of the gate. There was a heating oil trade only weeks after the Turtles’ initial training in 1984. The Turtles were supposed to be trading much smaller sizes. They were supposed to be trading “one lots” or just one futures contract. Faith apparently traded much larger and made more money than all of the other Turtles. Cavallo thought Faith had exceeded what they were allowed to trade, but he also thought an arguably reckless or “go for the jugular” attitude may have elevated him in Dennis’s eyes. It kept coming across loud and clear from assorted Turtles: Faith’s trading didn’t reflect what they’d been taught. Cavallo, the Harvard MBA, was brutally honest: “It wasn’t at all what we were taught. In fact, you could say it was slightly counter to what we were taught.” Even though Cavallo was making millions and was easily considered a top- grossing Turtle at the time, the fact that Dennis gave more and more money to Faith perplexed him. Cavallo had no ax to grind in talking about Faith. In fact, years later he served on the board of directors of a firm Faith had started. Why was Cavallo concerned about Faith’s style of trading? He worried that Faith was risking so much that he could ultimately be ruined (as in mathematical risk of ruin). From that first day of class Eckhardt had pressed home the point of managing risk, but many Turtles saw it almost immediately being ignored by one of their own. DiMaria, who was only eighteen months older than Faith, saw everyone playing by the rules during the program except Faith. He said, “That would go to position sizing, markets traded . . . he was the special boy wonder. So he could do things that the rest of us couldn’t. He probably doesn’t realize that. Did he have special rules ahead of the game, or did he change the game and then ask if those new rules were okay?”

When readers read chapters 7, 12 and the Afterword of my book on the Turtles there are very clear reasons why there may be "discrepancies".

 

[amnonco]

Thanks for the feedback. Fair enough. I do disagree with you that the "mental" side is as simple as you state. In the case of the Turtles there were many behavioral circumstances, occurring over many years, that directly affected performance. To not properly analyze those issues, and fall into "I only need technical rules and research" mode, misses at least 50% of the Turtle story and lessons.

how about - "I only need technical rules and research (for the confidence) then run the computer and get the hell out of the way"?

 

[amnonco]

In researching my book other Turtles stated that Faith was either using or allowed to use other rules not privy to other Turtles.

When readers read chapters 7, 12 and the Afterword of my book on the Turtles there are very clear reasons why there may be "discrepancies".

maybe I wasn't clear.
the so-called discrepancies (or maybe "black holes" of info.) are between your version and the original rules. faith's version is for the most part in accordance with the rules (leave the "I'm the best goddamn turtle and a freakin' ping pong master" parts behind)

so who wrote the "original" rules? faith? you? where's the differences come from?
here's a list of them, can you explain them? of course this doesn't mean anything in terms of learning TF. but where's the truth?

- how many units they traded per market? what's loaded? the rules state 4, you say 5.
- what was the portfolio management (heat)/diversification method?- the original rules state 6 units in closely correlated, 10 in not correlated and 12 long/short overall, faith mentions this, you mention that bill taught them how to calculate (long-short/2 or the other way around) and that's it.
- pyramiding - both faith and the original rules state pyramiding every 0.5N - you say it was every 1N to keep the 2% risk (before the memo)

 

[mcovel]

so who wrote the "original" rules? faith? you? where's the differences come from??

The "free" rules floating on the net were authored by CF.

My post probably makes more sense now.

 

[mcovel]

how about - "I only need technical rules and research (for the confidence) then run the computer and get the hell out of the way"?

Fair enough, but it is probably important for readers to know that it did not work that way for the original Turtles -- and there are reasons why that is.

 

[amnonco]

The "free" rules floating on the net were authored by CF.

My post probably makes more sense now.

most definitely.

nice chatting' with you.

 

[AyePee]

I read both Mr Covel's Book's, and both Mr Faith's books.

I found that Mr Faith's first book explained the basic nuts and bolts to get yourself started in backtesting trading strategies, while Mr Covel's first book was a little light on for the basic "how-tos", but very good as discussion of the bigger ideas and issues around Trend Following.

Covel's higher level discussions, on top of Faith's grass roots practicalities, allowed me to advance my practical knowledge and avoid many pitfalls.

I WOULD STRONGLY RECOMEND READING BOTH BOOKS TOGETHER.

I didnt get as much out of either of their second books as their first. I found Covel's second book very entertaining, but for me, most of the ideas were covered in his first book. I didnt finish Faith's second book, it didnt do it for me at all.

Cheers,

AP