Way of the Turtle summary: 5 lessons from the Turtle traders
Two traders made a bet: could ordinary people be taught to trade with a set of rules? One of the people they trained wrote this book. The rules turned out to be the easy part.
The book in one line
Way of the Turtle: The Secret Methods that Turned Ordinary People into Legendary Traders is by Curtis M. Faith, published in 2007.
It's the inside story of the "Turtle" experiment run by traders Richard Dennis and William Eckhardt in the 1980s. Faith was one of the trainees and, by his account, the youngest. He explains the rules they were taught and, more importantly, why many trainees struggled to follow them.
The subtitle is the publisher's, not ours. We'll stick to what the book actually teaches.
What happened, briefly
The story goes that Dennis believed trading could be taught, while Eckhardt thought it was mostly talent. To settle it, they placed newspaper ads, picked a small group from many applicants, trained them for a couple of weeks, and gave them accounts to trade with a strict set of rules.
By most accounts, Dennis named the group after turtle farms he had visited in Asia: he wanted to "grow" traders the same way. Read more in our story on the Turtle traders.
The 5 ideas worth keeping
1. Simple rules can be taught
The Turtle rules weren't magic. In broad strokes, they followed trends: buy when price broke above its recent highs, sell when it broke below its recent lows, across many markets.
The lesson for beginners: a method doesn't need to be complicated. It needs to be clear enough that you'd make the same decision every time. See our trend-following strategy guide.
2. Following the rules is the hard part
This is the heart of the book. The trainees got the same rules, yet their results varied a lot. Faith argues the difference came down to who actually followed them, especially after losses.
That's encouraging. It means discipline matters more than finding a secret. It's also a warning: knowing a rule and keeping it under pressure are two different skills.
3. Size from how much a market moves
The Turtles adjusted their position size based on how much each market normally moved, using a measure like the ATR (average true range: the typical size of a day's move). Calm markets got bigger positions, wild ones smaller, so each trade carried similar risk.
That's the same principle behind sizing from your stop: the further away your stop, the smaller your position. Our ATR guide and the position size calculator show how.
4. Losing streaks are part of trend-following
Trend-following methods often have many small losses and fewer, larger wins. Faith is honest that this is emotionally hard: long stretches of small losses tempt people to skip trades or change the rules.
If you use any method, learn what its normal losing streak looks like before you trade it. Our guide on handling a losing streak helps.
5. Test the rules, then trust the testing
Faith spends time on testing rules against past data, and on the traps: rules that look perfect on old charts because they were fitted to them.
Test honestly, on lots of data, and expect real results to look worse than the test. See how to backtest a trading strategy.
How to use it as a beginner
Use the book to understand why rules fail, not just what the rules were. A simple plan:
- Write a short rulebook for one setup: entry, stop, size, exit. Five lines.
- Practise 20 trades on past charts with bar replay. Take every signal.
- Mark each trade: did I follow the rule exactly? Yes or no.
- Look at your "no" trades. That's where the real work is, just as Faith describes.
A note on the results. The book mentions large gains by the Turtles. Those were a specific group, in specific markets and years, with real money behind them. Treat it as history, not a promise, and not a guide to what you'll see.
Who it's for, and who should skip it
It's for you if you want to see how a rule-based method works from the inside, or you're curious about the most famous trading experiment.
Skip it (for now) if you're looking for a ready-made system to copy. The original rules were built for futures markets in the 1980s, and markets have changed since.
Read it with…
- Market Wizards: includes an interview with Richard Dennis himself.
- Trading in the Zone: explains the mindset that makes following rules possible.
Questions
Who were the Turtle traders?
A group of people trained by Richard Dennis and William Eckhardt in the 1980s to trade with a set of rules, as part of a bet about whether trading could be taught.
Who wrote Way of the Turtle?
Curtis M. Faith, one of the original Turtle trainees. It was published in 2007.
Do the Turtle trading rules still work?
Markets have changed since the 1980s, and any method can stop working. The lasting lessons are about clear rules, sizing from volatility and actually following the plan.
What is the main lesson of Way of the Turtle?
That simple rules can be taught, but following them through losing streaks is the hard part, and it's what made the difference between trainees.
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