System Trading

Turtle Trading: Discipline Over Talent

Richard Dennis proved through the Turtle program that clear rules plus strict execution can turn rookies into pros.

Trend Following

Risk Units

Execution Discipline

Three Principles of the Turtle Experiment

Systems > Talent > Gut

Repeatable Strategy

If a method can be defined clearly, it can be taught. The Turtle experiment proved talent isn’t the core—systems are.

Constant Risk Units

“N”(20-day ATR) tuned position size so every trade risked the same dollar amount despite volatility differences.

Trend Following with Pyramiding

Breakout entries build positions in tranches—cut losses fast, let winners run via pyramiding.

Core Rulebook Overview

Entries, pyramids, stops, sizing

The Turtle system was deliberately simple—its rules fit on a few pages. Use the table below as a template for your own systematic playbook.

Entries

System 1: 20-day breakout; System 2: 55-day breakout. Skip the next System-1 signal only if the prior one lost.

Pyramiding

Add up to four units spaced one N apart; each add-on cannot exceed the initial unit so risk scales smoothly.

Stops

Hard stop = entry minus 2N (long) or plus 2N (short). Execute instantly when touched.

Money Management

Max 4 units per market, 6 across correlated markets, 12 risk units portfolio-wide.

Execution & Review Checklist

Discipline is the shock absorber

Document entry, add-on, stop, and exit triggers; do not improvise mid-trade.
Maintain a position sheet with instruments, N values, size, risk units, and P/L for daily review.
Create “penalties” for rule violations—scale down or pause trading to keep emotions in check.
Backtest and forward-test regularly to ensure robustness, then retune parameters for volatility shifts.

Turtle Maxims

“We can’t control markets, only risk; following the rules is the edge.” — Richard Dennis

Keep Exploring Macro & Industry Topics

Combine Turtle principles with macro drivers and industry landscape to build your own systematic process.