Turtle Trading rules having a tough time............
Hi
Thought people might find this interesting. It's the latest mail from Russell Sands who used to be one of the original Turtles and now "teaches" this method. I attended his seminar in London in 2003 which was hosted by Vince Stanizone (I didn't know much back then)
He sends out nightly orders derived from his computer simulation of the rules. I think he had got a bit of criticisim from some of his students as he didn't trade his own rules so he (supposedly) set up a live account and has been sending out commentaries of it's performance.
This is the latest one
#Start#
Hey guys, if December was a nightmare for the Turtle equity curve, then January must be the night of the living dead. A drop of over 100% of equity in less than two months on the computer model. This is bad stuff. Not unheard of though, it has happened eight times in the past fifteen years. well, thank god it is just a computer model. But some of you seem to have lost the thought of that concept.
Do any of you remember that we discussed this scenario in the seminar, under a concept called "risk of ruin"? Specifically on page 93 of the Turtle Manual. There was some stuff there that had to do with the idea of cutting your position size if/when you start losing money. Remember ? These were not secret trading rules guys, this is bloody common sense !!
The computer models don't know Jack. They trade a million bucks. It takes all the trades in all the markets, and sizes positions as though its account was always a million bucks. The computer model doesn't pyramid on winners, and it doesn't cut back on losers, and it most certainly doesn't know how much money any one of us have in our accounts in real life.
The nightly orders are just a guide, not the god damn holy grail. The whole point of the Turtle system experiment was to teach people how to think about and trade the markets. People with brains and common sense. Any monkey can read and blindly follow a computer printout. The Turtle is supposedly higher up the evolutionary scale than the Monkey.
Cut back !! Cut back !! Fewer trades. Less markets. Smaller positions. Was this whole discussion lost on you guys ? Even the brokers, whose not their job it is, tell me they have been suggesting to people who are losing to cut back their trading. But I hear that many of you are not listening. Why ????
I don't watch your accounts day to day, I have my own problems to worry about. And the brokers, well most of them are also sort of busy at times like this, and some of them even want you to keep trading more and keep those commissions rolling in.
I taught you guys how to trade, but I am not the babysitter. You all need to learn how to think for yourself. The one weakness of the Turtle system is that it sometimes goes through long and tough losing periods. You have to put up the gloves and play defense here. If you start losing money, then you start reducing your trading, it's as simple as that.
My account has dropped from $130,000 to $106,000 so far this year. I am not real ****ing happy about that. But I do occasionally look at other account statements on the same brokerage run as me. And when I see a guy who has dropped from $150,000 down to $ 50,000, and is still trading multiple contracts per positions, well now that just isn't right.
If you're trading a larger (say six figures) account, you need to reduce the number of contracts in each of your trades, and maybe even reduce the number of markets you're trading. And not just once, but again and again, if your equity keeps slipping lower. Even if you're trading a small account and can't reduce this way, you can still reduce the number of trades, i.e. switch to turtle system 2 instead of turtle system 1.
The markets have been bad, but professionals like us should know better than to make it worse than it already is. I am not going to tell each of you what to do, and your broker is certainly not going to tell you what to do. This is one that you have to step up and show some responsibility and make your own decisions. Play defense and reduce !!
#End#
He charges around £2500 for the seminar , uses the computer model to show how great the system is , so I was slightly amused by the above mail.
Cheers
