What is Turtle Trading? A Trend-Following Strategy for Crypto Investors

1. Introduction to Turtle Trading

Turtle Trading is a trend-following strategy developed by Richard Dennis in the 1980s. He believed that anyone could become a successful trader by following a specific set of rules. To prove this, he trained a group of novices, called "the turtles," who went on to earn $175 million in five years.

2. How Turtle Trading Works

•  

• Following market trends: Utilizing technical indicators like Moving Averages (MA) and Donchian Channels to identify entry and exit points.

•  

• Strict risk management: Limiting risk to no more than 1% of capital per trade to protect against significant losses.

•  

• Diversifying investments: Spreading investments across various sectors and ecosystems to minimize risk.

3. Application in the Crypto Market

In the cryptocurrency market, Turtle Trading helps investors identify trends using the 50-day MA. For instance, if Bitcoin's price rises above the 50-day MA, it may signal a buying opportunity; conversely, if it falls below, it may indicate a selling point.

4. Pros and Cons of Turtle Trading

Pros:

•  

• Eliminates emotional decision-making.

• Easy to implement for beginners.

• Applicable across various markets.

Cons:

Requires high discipline and patience

May miss short-term trading opportunities.