Praise for Trading from Your Gut

1. Trade with an edge—Make sure that you have a trading
strategy that will make money.
2. Manage risk—Don’t trade with so much leverage that you
risk losing everything.
3. Be consistent—Do this to reap the benefits of your trading
strategy.
4. Keep it simple—Don’t try to make trading more compli-
cated than it actually is.
I described the specific strategy in less than 30 written pages in
a bonus chapter of Way of the Turtle. Dennis and his trading part-
ner, William Eckhardt, taught us this strategy in only a few days of
the two-week training course. 
As a Turtle, I simplified it even further.
120
T
RADING FROM
Y
OUR
G
UT
From the Library of Daniel Johnson

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ptg
For the first several months of the Turtle program—my first
time doing actual trading of any sort—I studiously plotted the clos-
ing prices on the newspaper-sized “Commodity Perspective” paper
charts we received each week. Then I realized that most of this was
wasted work. What mattered was only whether the price made a
new high or low, whether it broke out of the trading range. A price
that didn’t create a new high or low wasn’t really relevant to our
trading style. It was noise. So I stopped plotting noise. Simpler was
better. 
We were supposed to buy on breakouts of 10- to 12-week highs
and sell short on breakouts of 10- to 12-week lows. After a while, I
stopped counting the number of weeks because I found that I could
eyeball the charts; my intuition told me that the most important fac-
tor was what the chart looked like, not whether it was a 9-week and
4-day breakout or a 10-week breakout. Again I simplified. Simpler
was better.
It didn’t take long before I spent almost no actual time deciding
what to do. I looked at the price, looked at the chart, and knew
immediately what to do. I didn’t have to think. I had trained my
right brain to do the thinking instantaneously.
If you had looked at what I was doing using left-brain analysis,
you would have found out that I was, in fact, trading according to
the rules we had been given, even though I was not using the left
brain to make my trading decisions. I had trained my right brain to
automate the left-brain tasks. This way was much quicker and just as
accurate. I was able to do this because the actual left-brain knowl-
edge required to trade our method—and most other methods that
work in trading—is relatively small, deceptively small.
C
HAPTER
7 • S
IMPLICITY AND
S
PEED
: T
RAINING TO
B
E A
M
ASTER