Despite its respectful age, the Turtle strategy can teach you a few useful lessons, giving you a better understanding of the essence of price action and big trends. Before reading the article and writing your questions in the comments section, I recommend to watch this video. Many years ago, traders Richard Dennis and William Eckhardt argued.

They wondered whether a common person can learn how to trade simply by following the rules of the selected trading system. While Richard Dennis believed it was possible, William Eckhardt was of the opposite opinion. According to him, you need to have a special talent gut feeling to be a trader. To find the truth, the two traders decided to make an experiment.

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Richard Dennis published an ad and selected a random group of people to teach them his trading system. At the end of the training course, the best students were given certain amounts of money to trade. Can you imagine the result? At the same time, other students suffered devastating losses. All of them traded in the same market, at the same time, and used the same trading system.

This experiment proves that a trading system is not everything. The success of trading also depends on the trader. If n equals 20 days, the indicator shows the prices of the highest highs and lowest lows for the last 20 bars. The same scheme is applied for 55 days. The Donchian channel is a very simple tool. You can easily draw a channel band on a piece of paper. Channel bands are plotted for three time periods: 55 days, 20 days, and 10 days.

While you can identify breakouts yourself, it will be both faster and easier to use additional indicators for that purpose. TheClassicTurtleTrader identifies breakouts as red and blue points. Entries and exits are shown with arrows. The indicator is plotted on the chart twice.

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In the first case, the period is 20 and the stop period is In the second case, the period is 55 and the stop period is The points can be also used as signals as the channel continues to rise or fall over the last n days. The Turtle Indicator paints the breakout zones of , , and day channels. Plus, it indicates entry points with arrows and exit points with ticks.

ATR is a standard indicator with the default period of Two trading methods use the breakout of the Donchian channel. You can open a trade as soon as the price breaks out of the channel, without waiting for the candle to close. If it turns out that the breakout is a winning one, you need to open a trade once the price breaks out of a day channel. Instead of placing an order, they monitored the price and waited for the breakout to close a trade.

To calculate a stop loss, you need to add the ATR indicator on your chart:. By placing this stop loss, we play it safe. As we follow strict exit rules see below , stop losses are hardly ever activated. The marked point indicates the breakout of the day channel upwards. Here we would have to exit the trade:. This is how we make exits. Be sure to closely monitor the indicators and wait for the entry and exit signals.

This is where we would be able to enter the market. ATR would be at points.

For any other ATR value, we would calculate the interval for additional orders as half of that value. As for stop losses for additional orders, they are calculated exactly as described above. Once your additional order is activated, the stop loss for your position shifts up or down. In case of a losing streak, they still managed to stay in the game.

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This is what money management is all about. The trade, which we had opened at the breakout of the day channel, would close once the stop loss is activated:. Because the previous breakout of the day channel was a winning one. For the breakout to be considered losing, the price must move against our potential trading direction by at least 2 ATR:. This strategy is based on the famous turtle system and tried to stay true to the rules within the confines of what pinescript will allow me to do. This is a short-sell version of the strategy based on the famous turtle system.

For Educational Purposes. Results can differ on different markets and can fail at any time. Profit is not guaranteed. This only works in a few markets and in certain situations. Changing the settings can give better or worse results for other markets. This is a longer term trend following strategy that uses Donchian Channels for trend following and uses the upper Donchian channel with Turtle trading style: buy long when price is higher than high 20 candles green up arrow , and sell short when price is lower than low 10 candles red down arrow.

This is not perfect but in the long run it will profit. Works best in bull market. A bit better the Price Channel. Based on my previous script "Turtle N Normalized," this script plots the CM SuperGuppy on the value of N to identify changing trends in the volatility of any instrument.

N is simply the Simple script that calculates the normalized value of N. Rules taken from an online PDF containing the original Turtle system: "The Turtles used a volatility-based constant percentage risk position sizing algorithm. The Turtles used a concept that Richard Dennis and Bill Eckhardt called N to represent the underlying volatility of a particular market. N is simply TradingView EN. Indicators and Strategies All Scripts. All Scripts. Indicators Only. Strategies Only. Open Sources Only.

Top authors: turtle. Turtles Modified Alerts.