Hi all, I recently read The Way of the Turtle by Curtis Faith. I read in an interview that Richard Dennis turned $5000 into $100 million. How much leverage do you think they used? 20:1? 4:1? Did they use options? Thanks
The turtle students traded with 1M+ accounts Back in the early seventies the legend is that Richard Denis turned $200 into $200 million. However he started out as a floor trader. Not known how much he made from regular floor trading by capturing the bid/ask spread, before he turned into an off the floor trend following trader. As for leverage to do overnight trend following that is normally just exchange overnight margin, typically something like 20:1 for futures. Although i'm not sure if exchange members were allowed extra leverage back then or not.
I think he blew up 3 funds after that. When locked limit was more of a thing than today, riding the locked limits was quite profitable I believe.
The Turtle's traded futures in units of 1% of capital which was volatility adjusted to the symbol. For a single market their max size was 4 units, starting with 1U than adding onto winners at 1/2 ATR increments up to 4U. Their were two exit systems used: risking 0.50% of capital per trade which some did better with this, the others risking a max 2%. This is in the book p245-274
%% I thought it was $500 into $300 million, but you May be right. But using Jack Schwager as a source ; he did bid\ ask + trend following trades. And used old WSJ paper piles for furniture
They might still work according to a 2022? article, but it wouldn't be fun. https://relaxedtrader.com/original-turtle-trading-rules/
To swing that much capital in 141 trades, you'd need a few hundred million in the trading account, to be safe. Risky business to do it with less.
Most of the original turtles were funded with $1 million dollar accounts, so I'd guess that was the website's gold futures backtest simulated. I think the main point of the article is to sell viewers an improved version and/or other trading systems.