Book Summary
Published by McGraw-Hill in 2007, Way of the Turtle is Curtis Faith’s inside account of one of the most famous experiments in trading history. In 1983, the legendary commodities trader Richard Dennis bet his partner William Eckhardt that trading could be taught — that great traders were made, not born. To settle it, they recruited a group of ordinary people, gave them a complete trend-following system, funded their accounts, and watched what happened. Faith, nineteen years old at the time, was the youngest of the group — and the most successful.
The book’s centerpiece is the system itself. Faith lays out the Turtle rules in full: entries on price breakouts, exits when a trend reverses, and — most importantly — position sizing based on market volatility, so that no single trade could do serious damage. The Turtles traded futures across many markets, following trends wherever they appeared and cutting losses quickly when a trend failed. The experiment earned Dennis a fortune and made the Turtles famous, and the rules themselves were kept secret for years afterward.
What makes the book valuable is that it is a manual, not a memoir. Faith writes as a teacher: each rule is explained, the reasoning behind it is laid out, and the psychology — why a simple system is so hard to follow — gets as much attention as the mechanics. The book’s argument is that the rules are the easy part; the hard part is following them when every instinct says otherwise.
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Who is Curtis Faith?
Curtis Faith was nineteen when Richard Dennis picked him for the Turtle experiment — the youngest of the group, with no trading background and no finance degree. Over the next four years he became the most successful Turtle, and after the experiment ended he went on to trade, to write trading software, and to advise firms on systematic trading. He is the rare Turtle who wrote down the rules in full, which is why this book exists at all.
Faith’s niche is systems. Where other trading writers tell war stories, he writes about process: how to design a rule, how to size a position, how to test whether a system works before risking money on it. Way of the Turtle is his best-known book and the one that made the Turtle experiment public in detail — before it, the rules were passed around in fragments and rumors, and the full system had never been published by one of the traders who used it.
Lessons From Way of the Turtle
Trend following is a bet on persistence, not prediction. The Turtles did not forecast where prices were going; they waited for price to break out of its recent range and then rode the move. The system assumes that markets trend — that a market moving up is more likely to keep moving up than to reverse — and it is built to capture the middle of those moves. The lesson transfers beyond trading: you do not need to predict the future if you have a rule for reacting to the present.
Position sizing is the real edge. The Turtles sized each trade by volatility, using a measure called N — roughly the market’s average daily range — so that a volatile market got a small position and a calm one a larger one, and every trade risked roughly the same amount of capital. Most traders obsess over entries; the Turtles’ edge was in how much they bet. A good system with reckless sizing will still ruin you, and a mediocre system with careful sizing can survive.
Cut losses fast, let winners run. The Turtle exits were mechanical: when a trend reversed past a set point, the position was closed, no debate. Most Turtle trades lost money; the system worked because the winners were much bigger than the losers. That asymmetry is the whole game in trend following, and it is psychologically brutal — it means accepting a long run of small losses while waiting for the few trades that pay for all of them.
A system only works if you follow it. The Turtles who failed were not the ones who misunderstood the rules; they were the ones who overrode them — skipping entries that looked scary, holding losers that should have been cut, taking profits too early. Discretion is the enemy of a system: the moment you start improvising, you are trading your emotions, not the rules. Faith’s book is, underneath the mechanics, a book about that failure mode.
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Criticisms of the Book
The main weakness of Way of the Turtle is that the Turtle era is gone. The experiment ran in the 1980s, when futures markets were less crowded and trend following was a niche pursuit; today, trend-following funds manage hundreds of billions of dollars, and the easy trends are arbitraged faster. Faith is honest about this — he notes that the system would need adapting — but a reader who copies the rules exactly as printed is trading a 1983 system in a 2026 market.
The book is also, by design, a system manual rather than a complete education. It says little about which markets to trade, about the costs and taxes of futures trading, or about the academic debate over whether trend following works at all. Readers who want that context should pair it with Trend Following for the history of the strategy, and with Getting Started in Technical Analysis for the chart-reading skills the Turtles took for granted.
Who is This Book For?
This is the book for a trader who has heard the Turtle legend and wants the actual rules. It pairs naturally with Market Wizards, where Dennis and other trend followers explain their thinking in their own words, and with The Little Book of Market Wizards, the condensed version of those interviews. Readers who enjoyed either will find this one the missing manual — the system behind the stories.
It is less useful for readers who want a long-term investing strategy. Trend following is a trading method, not a way to build a retirement portfolio: it requires constant attention, comfort with leverage, and a tolerance for long losing streaks. If you want a buy-and-hold approach instead, this book will not convince you — it is written for people who have already decided to trade.
Final Thoughts
Way of the Turtle has lasted because it settles an argument that still matters: whether trading skill can be taught. Dennis’s experiment said yes — and Faith’s book is the textbook that proves it, written by the student who learned it best. The rules are simple; following them is not.
Read it before you risk money on a trading system of your own, and read it again after your first big loss — the second time through, the chapter on position sizing reads less like theory and more like advice you wish you had followed. As an introduction to systematic trend following, it remains one of the clearest places to start.
