By Jay Norris
There was some divergence today between the carry trade markets and U.S. stock indices but it is hard to base a trade on low volume price behavior in a holiday market. That said it may be best to take a step back and read something trading related.
I'm excited to say I finally got around to getting to the book store to get a copy of Way of the Turtle, by the trader Curtis Faith. I've had a couple of guys I especially respect in the business recommend the read, and I can tell just from reading Faith's humble tone in the acknowledgments that it's going to be worth the $30.
Everyone in the trading community here in Chicago has heard of Richard Dennis and the Turtles, though it was from a trader living in Southern California that I heard first hand about Dennis and his Turtle experiment. Bill Williams had the good fortune of being friends with and having broken bread with Dennis many years ago. Having studied under Bill myself, and working with Dwayne Pliska here in Chicago, who specializes in the Turtlesâ€™ trend following method, I can appreciate these similar schools of trading. Not that any one trading study could be summed up in a sentence, but I think it's fair to say that these four words might come close in this case: Let your profits run.
I've noticed over the years that, more times than not, proven methods tend to give signals/triggers at the same time and price. Trend following methods like Richard Dennis' and Bill Williams' will often have similar timing in their triggers, and put great weight on the existing pattern of highs and lows in a particular market. With so many similarities between proven strategies, the thing we find that differentiates successful traders from losers is the difference between following a method, or not. Enough of my thoughts. It's time to refill the humidifier, pull up a chair, and crack the book Way of the Turtle / The Secret Methods that Turned Ordinary People into Legendary Traders, by Curtis Faith, McGraw Hill, 2007.
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