What is the Turtle Trading Law, and what is the essence of the Turtle Law?

  As a well-known term, the Turtle Trading Rule has always been hotly debated by the majority of investors. Many investors regard it as the Holy Grail of trading. So what exactly is the Turtle Trading Rule? This article will give you a combination of the Turtle Trading Rule and the essence of the Turtle Rule Moving Average.

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  What is the Turtle Trading Rule?

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  The Turtle Trading Rule is essentially a simple trading system in which many operations are extremely mechanical and emotionless. Based on this rule, there are several logics at the beginning. First, any turtle will run to the sea. Second, only a few turtles can live and enjoy their lives. These two logics imply the trading rules and the 28th rule in stocks. , so this operating system is called the Turtle Law. Under normal circumstances, the Turtle Law has three characteristics: a complete trading system, mechanical operation, and stable profit methods, so this law is called a miracle in the history of trading.

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  The Turtle Rule is generally based on the closing price of the underlying object. If it stands on the 20-day moving average, it will open a position to buy, and if it falls below the 20-day moving average, it will close the position and sell. All are based on the closing price of the subject matter, so it is required to pay attention to the target to be traded within half an hour before the close of each trading day to decide whether to buy or sell. It hopes to effectively overcome greed and fear in the transaction process through such mechanized operations, and achieve the purpose of obtaining investment returns.

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  The record of the Turtle Trading Rules

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  The founder of Turtle Trading was Richard Dennis, a well-known futures speculator in the 1970s and 1980s. He believed that excellent traders were nurtured rather than born. He recruited 23 new people, nicknamed the Turtles, in December 1983, and trained these traders on a simple trend-following trading strategy. An initial funding of $1 million was then given to each newcomer. After 5 years of operation, most of the "Turtles" have achieved impressive results, with the best of them reaching $172 million. N years later, the Turtle Trading Rules were announced to the world, and we were fortunate to see the full picture of the once-famous Turtle Trading Rules.

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  The essence of the turtle law moving average

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  The moving average is the connection of the average price of commodities in a period of time. It not only represents the cost of the market, but also represents the running trend of the market. In all technical analysis, the principle of market cost is very important. It is the basis for the generation of market trends. The reason why the trend in the market can be maintained for a certain period of time is because of the driving force of market costs. For example, in an upward trend, the cost of the market is gradually Rising, in a downtrend, the cost of the market is gradually moving down.

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  Changes in costs led to a continuation of the trend. The moving average represents the change in the average cost of the market in a certain period of time, thus forming the running trend of the market in a period of time. Studying the operation law of the moving average is the basic method to judge the market trend, and it is also an important basis to guide us to decide to buy and sell.

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  According to the length of the moving average period, the effect of the moving average is different. Generally speaking, according to the time unit of the moving average, the moving average is generally divided into three periods: long-term moving average, medium-term moving average and short-term moving average.

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  Contents of the Turtle Trading Act

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  A complete trading system contains every decision needed for successful trading:

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  1. The market---what to buy or sell

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  2. Position size----how much to buy or sell

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  3. Entering the market - when to buy or sell

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  4. Stop Loss - When to exit a losing position

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  5. Exit the market - when to exit a profitable position

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  6. Strategy----How to buy and sell

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  Markets - what to buy and sell

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  The first decision is what to buy or sell, or essentially what market to trade in. If you trade in only a few markets, you greatly reduce your chances of catching a trend. At the same time, you don't want to trade in a market with too little volume or an uncertain trend.

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  Position size - how much to buy or sell

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  Decisions about how much to buy or sell are absolutely fundamental, yet are often misinterpreted or mistreated by most traders.

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  How much you buy and sell affects both diversification and money management. Diversification is the effort to spread risk across many investment vehicles and increase the chances of profit by increasing the chances of capturing successful trades. Proper diversification requires similar, if not identical, bets on a number of different investment vehicles. Money management is really about managing risk by not betting so much that you run out of money before a good trend arrives.

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  How much to buy or sell is one of the most important aspects of trading. Most new traders take too much risk on a single trade, which greatly increases their chances of bankruptcy, even if they have an otherwise valid trading style.

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  Entering the market - when to buy or sell

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  The decision of when to buy or sell is often referred to as the entry decision. Automatically operating systems generate entry signals that describe clear levels and market conditions at which to enter the market to buy or sell.

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  Stop Loss - when to exit a losing position

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  In the long run, a trader who can't stop his losses will not be successful. Regarding the stop loss, the most important thing is to pre-set the exit point before opening the position.

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  Exit - when to exit a profitable position

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  Many "trading systems" sold as complete trading systems do not explicitly account for exits on winning positions. However, the question of when to exit a profitable position is critical to the profitability of the system. Any exit trading system that does not account for a profitable position is not a complete trading system.

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  Strategy - how to buy and sell

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  Once the signal is generated, strategic considerations about the mechanistic aspects of execution become important. This is especially a practical problem for larger accounts, as the advance or retreat of their positions could result in significant opposite price movements or market impact.

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  Whether the Turtle Trading Rule is really that helpful is still a topic of discussion. But it should be noted that there are many trading methods, the important thing is the trading logic and trading thinking mode behind the trading method. Methods are dead, logical patterns are what matters. Therefore, investors should look at the Turtle Trading Rules rationally and try to use them for their own use.