Top 5 Money Management Secrets for Turtle Traders

Turtle traders are regarded as one of the most successful groups of traders. They follow trading rules precisely, and their risk and money management strategies are great. Their strategies play a crucial role in determining their rate of successful trading.

Who are turtle traders?

The students of a famous trader called Dennis are called turtle traders because of the precise rules  they follow to execute a trade. Dennis reported that the rules that he set for his students would not be followed strictly by many traders. Turtle trading is a reputed strategy that is followed by the retailers to take benefits of the market’s current momentum. 

Money management secrets for the turtle traders

In this article, we will explain the top money management secrets that the traders follow.

  • Market’s volatility based on the stop-loss order

Turtle traders always set the stop-loss limit considering the volatility of the market. It means that the traders can quickly figure out the shape of their stop-loss order, which is based on the ATR (average true range) indicator. It also dictates that for each trade, retailers use various sizes of stop-loss to respond to the change of market condition. It has been already proved that the stop-loss order strategy is a robust one. But remember, to trade with precision, you need to choose a broker like the elite traders in the Mena region. Click here for more info and see what Saxo can offer to retail traders.

For example, if a trader finds larger candlesticks in the graph and higher value of ATR, then he will use a wider stop-loss. By contrast, if a retailer finds smaller candlesticks and lower ATR value, then he should use a smaller stop-loss.

  • The maximum position should not exceed 2%

Though the size of the stop-loss changes based on the trades, the percentage of the taken risk stays the same always. Experienced turtle traders don’t take risk more than 2% of the whole balance in their trading accounts. 2% position indicates that if a retailer’s trading account has $10,000 in it, then he will trade with only $200 of it at any time.

  • Risk and correlations

Turtle traders always check for the correlation between two markets if the traders want to enter into two trades at the same time. In this case, they choose two different instruments. Correlation indicates the similarity between two markets, and how they move. If the correlation is found positive between two markets, then it indicates that they will move in the same direction. On the other hand, if the correlation is found to be negative, then it will indicate that the market will move in opposite directions.

To realize this correlation, the retailer should always examine the charts of the two markets. If both of the graphs and their movements seem similar, then they have a positive correlation. Entering two trades with a similar movement indicates that there is a greater risk because both of them may end up in a similar point. It means that when you trade in the positively correlated market, the risk increases, and if the correlation is negative, the risk decreases.

  • Adding to the winner

Turtle traders don’t enter trades with a bigger position size. This is one of the most essential money management secrets. These traders always use 2% of their capital, and they split up this percentage across different entries and add to the winner. They start with the position of 0.5%, and as soon as they notice that the trade is moving towards profits, they add another 0.5% position. They continue increasing the size but never exceed 2% of their account balance. There are several advantages of increasing the position size to a confirmed winning trade.

  • Adjust the size of the position

The most vital thing during the trade is the way how you can limit the loss. This is like the psychology a trader. If the account falls by 10%, then the trader should trade as if the account has already lost twice that amount (20%).


These are the five effective money management secrets for turtle traders.