Trading is an interesting art form. Most of the theories in this book have to do with the psychology of winning and losing. Research has shown that people get more excited about losing money than about making money. The negative effect of losing is almost 3 times stronger than winning. Professional traders know this and make a lot of money from it.

Why is this important to me?

I understand that you are going to spend the next 7 minutes reviewing the summary of this book, so it needs to be actionable. With that being said, this is important because people are looking for ways to make money in the markets. Financial planners have made a killing in the last 25 years; unfortunately, most of their clients have not. This is a paradox that has people worried about their retirement. When you enter a 401K, it’s touted as just putting money in and forgetting it. The problem here, as people know, most 401Ks are really bad investments. People invest money for years and the account seems not to have moved or, even worse, it is less than what was entered. Market experts will tell you to just think long term and keep putting money. There are so many problems with this logic, but I won’t go into that right now.

Financial education must be acquired by each person. I am responsible for my financial future and so are you.

Curtis Faith was an original turtle and at 19 years old he made $31.5 million in winnings. Let’s examine the what, why and how around turtles.

1. What is the “way of the turtle”? This is a trading system based on principles that beat the market smoothly over a long period of time. This book takes a look at the system and shows you how they did it and why some turtles were more successful than others.

2. Why is this important? We covered this in the last section, but based on my own pursuit of financial education, I wanted to study the most successful traders and understand the psychology that surrounds them.

How does it work? The how is most of the book. I will examine the psychological side of why some turtles did better than others. There is a lot of math in these trading systems that I will let you delve into on your own.

1. Rules to Live By: Trade to your advantage, manage risk, be consistent and keep it simple. All of Turtle’s training, and indeed the foundation for all successful trading, can be summed up in these four basic principles.

2. Trading to the advantage: Are you familiar with blackjack? This is the only casino game that can be won without cheating. This is so because the game has memory. Counting cards and playing in teams is one way to create an advantage so that the odds swing in your favor. The same is needed in trade. Turtles were trend traders and knew how to create an edge to make money.

3. Manage risk: In business terms, there is price risk and liquidity risk. Price risk is pretty straightforward, if you are betting on the price going up over time then your risk is that it will not move or go down. Liquidity risk is the number of people who will accept your trade. The Forex trades $4 trillion per day. This transforms all other trading platforms in the world combined. The New York Stock Exchange trades $32 billion a day to give you an idea.

4. Be Consistent – ​​This is where Curtis beats all the other turtles. He just stuck to the system through thick and thin. Being consistent is the road to trading heaven, but doing it is another story. There is a concept in trading called drawdown that happens to all traders. This means you can earn 100% returns in six months and then have 20% of your earnings withdrawn in one day. When this happens, consistency goes out the window. The herd effect takes over and people run for the hills at the same time. The mental side of trading is by far the biggest asset or liability when running any system.

Curtis summarizes the entire mechanical trading system in the book. Covers Markets, Position Sizing, Entries, Stops, Exits and Tactics. This is great information to know, especially if you are thinking of investing money. I personally just got involved with a professional trading group and will only allocate 3% of my investment capital. I realize that if I need heart surgery, I won’t pick up a book and do it myself. There are real professionals out there and I don’t want to get eaten. In the book, Curtis and the rest of the turtles were trained for only two weeks, but they were mentored by professionals.

I hope you found this short summary useful. The key to any new idea is to work it into your daily routine until it becomes a habit. Habits are formed in as little as 21 days. One thing you can take away from this book is to become financially educated. Understanding trading is a key component to financial education. This doesn’t mean you have to, but understanding it is important.