Original Turtle Trading Rules: Chapter 8: Further Study

Where do you go from here? There is no substitute for experience.

The humorist Barry Le Platner said: “Good judgment comes from experience, and experience comes from bad judgment.”

If you want to become a trader, you must start to trade. There is no substitute. You must also make mistakes.

Making mistakes is part of trading. If you don’t start trading using actual money—and enough money that it affects you when you win or lose—you won’t learn all the lessons of trading.

Experience: “Experience is thatmarvelous thing that enables you to recognize a mistakewhen you make it again.” - Franklyn P. Jones.

Paper trading is not a substitute for trading with real money. If you aren’t using real money, you won’t learn how hope, fear, and greed affect you personally.

At the same time, it is important to get a thorough understanding of the fundamentals of trading. Armed with this knowledge you will make fewer mistakes, and you will learn much more quickly from the mistakes that you do make.

Here are some suggested areas for further study:


Trading Psychology

Trading psychology is the most important aspect of trading, and understanding yourself and your own personality as it relates to your trading is critical. This journey is much more about making a sincere and open-minded attempt to understand your own personal psychology than it is about finding the magic psychology book with all the answers.


Money Management

Money Management is the most important aspect of a mechanical trading system. Controlling risk in a manner that will allow you to continue trading through the inevitable bad periods, and survive to realize the profit potential of good systems, is absolutely fundamental. Yet, the interplay between entry signals, exits and money management is often non-intuitive. Study and Research into the state-of-the-art in money management will pay enormous dividends.


Trading Research

There is no substitute for statistically valid historical research when developing mechanical trading systems. In practice, this means learning how to program a computer to run simulations of trading system performance.

There is a lot of good information on curve-fitting, over-optimization, trading statistics and testing methodologies on the web and in books, but the information is a bit hard to find amongst the hype and bull. Be skeptical, but keep an open mind, and your research will pay off.


Final Warning

There are a lot of individuals who try to sell themselves and their advice as “expert.” Don’t blindly accept the advice of these self-proclaimed experts. The best advice comes from those who aren’t selling it, and who make their money trading. There are many books and biographies that give insights into the habits of those who have been—or who are—successful traders.

Learning how to become a good trader—or even an excellent trader—is possible, but it requires a lot of hard work and a healthy dose of skepticism. For those of us who have chosen this path, the journey never ends. Those who continue to be successful will never reach their destination, but will learn to find joy in the journey itself.

Original Turtle Trading Rules: Foreword
Original Turtle Trading Rules: Introduction
Original Turtle Trading Rules: Chapter 1: A Complete Trading System
Original Turtle Trading Rules: Chapter 2: Markets: What the Turtles Traded
Original Turtle Trading Rules: Chapter 3: Position Sizing
Original Turtle Trading Rules: Chapter 4: Entries
Original Turtle Trading Rules: Chapter 5: Stops
Original Turtle Trading Rules: Chapter 6: Exits
Original Turtle Trading Rules: Chapter 7: Tactics
Original Turtle Trading Rules: Chapter 8: Further Study