Published in 2007 by McGraw-Hill, Way of the Turtle: The Secret Methods that Turned Ordinary People into Legendary Traders by Curtis M. Faith stands as a must-read for anyone serious about systematic trading. Whether you’re a beginner trying to break into the world of trading or a seasoned trader looking for insights into proven systems, this book offers a unique perspective. Curtis Faith, one of the original Turtle Traders chosen by Richard Dennis, delves into the inner workings of the famous experiment that turned novices into highly successful traders. Faith’s approach is analytical yet accessible, making complex topics understandable for traders at all levels.
Curtis M. Faith Background
Curtis M. Faith was one of the youngest and most successful of the original Turtle Traders, a group mentored by Richard Dennis and William Eckhardt during the early 1980s. Faith’s participation in this experiment—designed to prove that anyone could be taught to trade successfully using systematic methods—helped him develop an in-depth understanding of market behavior, risk management, and system-based trading. Faith went on to build a successful trading career and authored several books, sharing the principles that helped him generate millions in the markets. His contributions continue to inspire traders who value systematic approaches to investing.
Summary of Way of the Turtle: The Secret Methods that Turned Ordinary People into Legendary Traders
The book covers a wide range of topics aimed at demystifying the trading process and making it accessible to anyone:
- The Turtle Trading Experiment: Curtis Faith shares detailed insights into the famous Turtle Trading experiment, explaining the rules, methodologies, and mindset behind the success of the participants.
- Psychology of Trading: The importance of maintaining discipline and overcoming emotional biases is emphasized throughout the book.
- System Development: Faith details how traders can develop their own robust systems, test them, and ensure they are profitable.
- Risk Management: The book offers techniques for managing risk, including position sizing and adjusting for volatility.
- Trade Execution: Faith explains how to implement trading rules without second-guessing, ensuring consistency and reliability.
Key Concepts and Strategies
Curtis Faith emphasizes several important lessons in Way of the Turtle:
- The Importance of Rules-Based Trading: Faith reveals how systematic trading, based on clearly defined rules, eliminates emotional decision-making and leads to more consistent profits. Traders must adhere to objective entry and exit points to avoid being swayed by market noise.
- Risk Management and Position Sizing: Faith’s Turtle Trading system shows that risk control is as crucial as identifying market opportunities. He teaches readers how to size positions based on market volatility and personal risk tolerance, ensuring that traders protect their capital at all times.
- The Psychology of Winning: Faith discusses the mental toughness required to stick to a system, even during inevitable drawdowns, which many traders struggle with. He stresses the value of backtesting as a confidence-building tool that can help traders trust their systems during challenging market periods.
Practical Applications
Faith offers numerous actionable strategies in Way of the Turtle. He demonstrates how traders can:
- Backtest their systems across multiple market cycles to identify robustness and reliability.
- Position size according to volatility using a technique known as volatility-adjusted sizing, which allows traders to control risk consistently across different market conditions.
- Employ trend-following systems that capture long-term market movements while minimizing the impact of short-term fluctuations.
These methods empower traders to approach the markets scientifically, relying on data and proven strategies rather than hunches.
Powerful Trading Quotes from Way of the Turtle
Personal Insights from Curtis M. Faith
Throughout the book, Faith shares anecdotes from his experience as a Turtle Trader, including the challenges of sticking to a system during times of doubt. His personal stories bring the lessons to life and make them relatable for readers who may be facing similar struggles in their own trading journeys. These insights not only offer motivation but also reinforce the importance of patience, discipline, and following the rules.
Conclusion
Way of the Turtle provides a thorough and compelling guide for traders of all levels who are seeking to master the art of systematic trading. Faith’s combination of personal experience, practical guidance, and theoretical knowledge creates a valuable resource for both beginners and advanced traders. Whether you are a discretionary trader looking to systematize your approach or someone entirely new to the markets, this book will offer tools and insights to improve your performance. Ideal for systematic traders, trend-followers, and those who want to overcome the emotional pitfalls of trading, Way of the Turtle is a timeless classic.
For those looking to expand their understanding of trading and improve their strategies, this book is a must-read. Buy it now on Amazon.
Other Great Trading Books
There are many great trading books which will help you accelerate your trading career. The following are books that we have reviewed and consider valuable additions to any systematic trader’s library.
Systematic Trading Books
- Systematic Trading - Robert Carver
- Market Beaters - Art Collins
- Quantitative Trading Strategies – Lars Kestner
- Trading Systems That Work - Thomas Stridsman
- Mechanical Trading Systems - Richard L. Weissman
- The Evaluation and Optimization of Trading Strategies 2nd Edition (2008) - Robert Pardo
- Long Term Secrets to Short-Term Trading - Larry R. Williams
- Breaking the Black Box - Martin J. Pring
- Way of the Turtle: The Secret Methods that Turned Ordinary People into Legendary Traders - Curtis M. Faith
- Trade Like A Casino: Find Your Edge, Manage Risk, and Win Like the House - Richard L. Weissman
General Trading Books
- Trade Your Way to Financial Freedom - Van K. Tharp
- Trend Following: How Great Traders Make Millions in Up or Down Markets - Michael Covel
- Stock Market Wizards: Interviews with America’s Top Stock Traders - Jack Schwager
- The New Market Wizards: Conversations with America’s Top Traders - Jack Schwager
- Market Wizards, Updated: Interviews With Top Traders - Jack Schwager
- Hedge Fund Market Wizards: How Winning Traders Win - Jack Schwager
- Unknown Market Wizards: The Best Traders You’ve Never Heard Of - Jack Schwager
- Trading For A Living: Psychology, Discipline, Trading Tools and Systems, Risk Control, Trade Management - Alexander Elder
- Taming the Bear: The Art of Trading a Choppy Market - Christopher Tate
- The Art of Trading: A Complete Guide to Trading the Australian Markets - Christopher Tate
Risk Management Trading Books
- The Definitive Guide To Position Sizing - Van Tharp
Technical Analysis Trading Books
- Come Into My Trading Room: A Complete Guide to Trading - Alexander Elder
- Trading Systems and Money Management: A Guide to Trading and Profiting in Any Market - Thomas Stridsman
- Beyond Technical Analysis: How to Develop and Implement a Winning Trading System - Tushar Chande
- Evidence-based Technical Analysis: Applying the Scientific Method and Statistical Inference to Trading Signals - David Aronson
- Following The Trend: Diversified Managed Futures Trading - Andreas Clenow
- Martin Pring on Market Momentum - Martin Pring
- Trend Trading For A Living: Learn the Skills and Gain the Confidence to Trade for a Living - Thomas Carr
- Common Stocks and Uncommon Profits - Philip A. Fisher
- The Richest Man in Babylon - George Samuel Clason
- Extraordinary Popular Delusions - Charles Mackay
- Reminiscences of a Stock Operator - Edwin Lefevre
Fundamental Investing Trading Books
- Beating the Financial Futures Market: Combining Small Biases Into Powerful Money Making Strategies - Art Collins
- How I Made $2,000,000 in the Stock Market - Lyle Stuart
- One Up on Wall Street: How To Use What You Already Know To Make Money In The Market - Simon & Schuster
Psychology Trading Books
- Super Trader, Expanded Edition: Make Consistent Profits in Good and Bad Markets - Van Tharp
- Trading Beyond The Matrix: The Red Pill for Traders and Investors - Van Tharp
- The Black Swan: The Impact of the Highly Improbable - Nassim Nicholas Taleb
- Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets - Nassim Nicholas Taleb
- Enhancing Trader Performance - Brett N. Steenbarger
- The Disciplined Trader: Developing Winning Attitudes - Mark Douglas
Amibroker Trading Books
- Introduction to AmiBroker: Advanced Technical Analysis Software for Charting and Trading System Development - Howard Bandy
- Quantitative Trading Systems: Practical Methods for Design, Testing, and Validation - Howard Bandy
- Modeling Trading System Performance: Monte Carlo Simulation, Position Sizing, Risk Management, and Statistics - Howard Bandy
- Mean Reversion Trading Systems, Practical Methods for Swing Trading - Howard Bandy
- Beginner’s Guide To AmiBroker AFL Programming - Ajan K K
- The Ultimate Algorithmic Trading System Toolbox - George Pruitt
- Foundations of Trading: Developing Profitable Trading Systems using Scientific Techniques - Howard Bandy
- How to Beat Wall Street – Everything You Need to Make Money in the Markets Plus! 20 Trading System Ideas - J B Marwood