From the October 01, 2007 issue of Futures Magazine • Subscribe!

Way of the Turtle by Curtis M. Faith

Way of the Turtle

By Curtis M. Faith

McGraw-Hill

288 pages, $27.95

No other trading legend inspires awe and wonder as the Turtles. Two industry giants, Richard Dennis and William Eckhardt, bet on whether successful trading was a matter of nature or nurture. They selected 23 people out of 1,000 applicants, funded them and taught them a mechanical system. Dennis’ argument, that winning methodologies were indeed transferable, was confirmed as several of the trainees became multi-millionaires and went on to head funds of their own.

Others didn’t do as well. Some have been discredited by their fellow alumni. Some never made it through the program due to lack of talent or violation of stipulations. Apparently even those members have not been shy about exploiting the Turtle moniker.

At age 19, Curtis M. Faith was the youngest Turtle and entrusted with the most startup capital. How he fared is open to interpretation, but is not relevant to a simple book review. What does Way of the Turtle actually deliver?

It is primarily a psychological account of how someone trades according to the mechanically systematic mindset imparted in the Turtle experiment. To be a full mechanical trader, you look at the big picture while eschewing the individual trade. Follow all mandates all the time, never second-guess or improvise.

Way of the Turtle is also a full disclosure of the team’s winning methodology. Most traders by now know how simple the entry rules were — variations on Donchian trend breakouts. The math behind how trades were sized was far more interesting, proving that money management is probably the greatest single component of success. The book offers an anecdotal recounting into the intent of the masters, their interaction with the students, etc., but this is not an in-depth Turtle story. None of the other Turtles is even mentioned by name.

It is, however, one of the better expositions on mechanical trading theory. It’s a paradox that while the practice is so theoretically cut-and-dried, the reality is that mechanical trading chafes so much at human inclination. Faith tackles the issue with depth, clarity and enthusiasm. Despite still longing for a definitive story of the Turtles, I felt satisfied by what Way of the Turtle does deliver — pragmatic, accurate information about mechanical trading.

Reviewed by Art Collins. Art Collins is the author of “Beating the Financial Futures Market: Combining Small Biases Into Powerful Money Making Strategies.” E-mail Art at artcollins@ameritech.net.

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