Way of the turtle

42
•
Way of the Turtle

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ting out of all 12 contracts at $1.03, which was very near the con-
tract high of $1.053 for the February contract. The vast majority of
the time the looming expiration date for a contract did not cause
us to exit a position. Instead, we simply transferred our position into
the next liquid contract by exiting the expiring month and taking
a new position in the next month. In this case things were differ-
ent; the trend had only taken place in the February 1984 contract,
so there was no reason to roll. This also meant that I needed to stay
in the February contract in order to ride the trend.
Figure 3-1 shows the February 1984 heating oil prices and the
entry and exit for our first major trend as Turtles.
The First $2 Million Is the Toughest
•
43
Jan 1984
Dec 1983
Nov 1983
Oct 1983
0.70
HOG: February 84 Heating Oil
0.75
0.80
0.85
0.90
0.95
1.00
1.05
1.10
Enter Long
1984-01-11 Day
Exit 13 bars
1984-01-30 Day
Entry
0.8451
Exit
1.0310
Initial Stop
0.8377
Figure 3-1
The Turtles’ First Trend
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After the trade was over, my account was up $78,000. I was
rewarded for holding to the methods we were taught by earning
almost three times as much on this trade as any of the other Turtles
did. The few who had positions of a reasonable size had all exited
near the lows of the previous dip and ended up missing half the
move. The Turtles who had not entered the trade made nothing. 
The difference in return had nothing to do with knowledge and
everything to do with emotional and psychological factors. It seemed
crazy to me. We all had been taught exactly the same thing, but my
return for January was three times that of the others in the class or
more. These were very intelligent people who had been taught by
the most famous trader of that time. Several of them would be among
the most successful traders in the world within a few years, yet they
had failed to execute the plan during the practice trading period.
Over the years I kept finding evidence that emotional and psy-
chological strength are the most important ingredients in successful
trading. This was my first exposure to that idea and the first time I
had seen it in action.