Question 1

What is the Turtle Trading system?

Accepted Answer

The Turtle Trading system was a trend-following experiment conducted by commodity traders Richard Dennis and William Eckhardt in the early 1980s. They recruited and trained novice traders ("Turtles") to trade using their systematic rules. The system's rules have been extensively documented in the public domain.

Question 2

What is the N-value in the Turtle system?

Accepted Answer

N is the 20-day exponential moving average of the True Range — essentially ATR(20). It measures the instrument's current daily volatility. The Turtle system sized each position to risk 1% of account per N of adverse movement, making position size proportional to volatility.

Question 3

How does the Turtle position sizing formula work?

Accepted Answer

Dollar Volatility = N × Dollars Per Point. Unit Size = (Account × 1%) ÷ Dollar Volatility. A "unit" was the standard position size in the Turtle system. Multiple units could be added as a trend developed.

Question 4

Is the Turtle Trading system still effective today?

Accepted Answer

The original Turtle rules are widely documented and their edge has diminished as markets have changed. However, the volatility-based position sizing methodology remains influential in systematic trading. This calculator implements the sizing formula for educational purposes — it does not constitute trading advice.

Turtle Trading Calculator