Way of the turtle

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Way of the Turtle

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lowing form: “Entered long at $400.00 because it was a 60-day
breakout according to the rules of System 2.”
A few days into the New Year, February heating oil rose from
about $0.80 to $0.84, and so I followed the system and bought three
contracts. The trade was immediately profitable, and in just a few
days I had bought the maximum 12 contracts. Over the next several
days, our “trading room” was buzzing with orders and the euphoria
of quick profits: Heating oil rose to over $0.98 in less than a week. 
This was before the days when computers printed charts auto-
matically. We followed the charts printed in Commodities Perspec-
tive, a tabloid-sized newspaper with charts for most of the actively
traded futures contracts that month. Since the charts were updated
only once per week, we needed to pencil in the prices for new days
after the close each day.
Heating oil challenged that approach because we were only two
weeks from the end of the contract expiration, and so Commodities
Perspective stopped covering the February contract. The problem
was that we had to use our old chart, which only went up to about
$0.90 since the high of the last year had been only $0.89. This
meant that the price was literally “off the charts.” To deal with this,
I cut out a section of the previous week’s charts that did not have
any prices on it and taped it to the top of the chart. The prices
extended about 12 inches past the top of the original chart.
While doing this, I noticed something that struck me as very odd;
in fact, it still does. I was the only Turtle with a full position. Every
other single Turtle had decided for some unfathomable reason not
to follow the system Rich and Bill had outlined. 
I don’t know if it was fear of losing too soon after starting, the
fact that the February contract of heating oil was going to expire in
The First $2 Million Is the Toughest
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a few weeks, or simply a preference for a more conservative trad-
ing style, but I could not figure out how everyone could have
attended the same training session I did and not be completely
loaded in February heating oil. (Loaded was a expression we used
to indicate having the maximum four-unit position.)
We were told over and over not to miss a trend, and here it was only
a few weeks later and many of the Turtles had missed the boat on a
very significant one. If we had been trading a normal $1 million
account, we would have had a unit size of 18 contracts instead of 3,
meaning that I would have made about $500,000, or 50 percent, on
this trade. 
The few days that followed my noticing that I was the only one
who had the full position were volatile. Heating oil dropped in price
from a high of about $0.98 to $0.94, or about $1,200 per contract.
After the price dropped for two straight days, I noticed something
else that I found interesting. 
According to Rich and Bill’s training, it was very clear that the
right thing to do during a brief drop was to hold on and let the
profits run. Therefore, that is what I did: I held all 12 contracts as
the price dropped. In just a couple of days I saw my profits drop
from about from $50,000 to $35,000. Upon seeing the profits evap-
orate, the few Turtles who had significant positions liquidated their
contracts.
Then the markets woke up. The next day the price began to rise
again. Soon it passed the previous high of $0.98 and kept rising to
over $1.05. It reached its peak a day or two before the contract was
due to expire.
I got a call from Dale in Rich’s office informing me that Rich
did not want to take delivery of heating oil, and so I ended up get-