Way of the turtle

The Turtle Edge
Since several of us did not have any trading experience, significant
time was spent on the mechanics of order entry and trading. Rich
and Bill also covered several concepts that were important even for
experienced traders to review since few in the class had traded
The First $2 Million Is the Toughest
•
33

---

accounts as large as Rich proposed giving us. Trading large
accounts presents its own difficulties because the size of the orders
can cause the markets to move, making it more expensive to trade.
Effectively managing orders is important in minimizing this effect.
The Turtles were taught to use limit orders rather than market
orders, which we did most of the time. Large market orders invari-
ably move the price. A limit order, sometimes known as an or bet-
ter order, is one in which you buy at a specific price or better. For
example, if you want to buy gold and the price is currently at 540
and has been moving between 538 and 542 for the last 10 minutes,
you might put in an order to buy at “539 limit” or “539 or better.”
In this scenario, if you had placed a market order, it most likely
would have been filled at the higher price of 541 or 542. Over time,
even small differences in price add up to a lot of money.
Arguably the most important element of the Turtle Way and the
pivotal difference between the approach and perspective used by
winning traders and that used by losing traders is that the Turtles
were taught how to think in terms of the long run when trading and
we were given a system with an edge.
Trading methods that work over the long run have what is known
in gambling as an edge. An edge refers to one’s systematic advan-
tage over an opponent. Most of the time casinos have the edge over
their clientele. With some games it is possible for players to gain
an edge. Skillful blackjack card counters are able to gain a tempo-
rary edge over the house when they notice that a large number of
low cards have been played. This means that there is a higher pos-
sibility that any card draw from the deck will be a high card. Dur-
ing these times, the players can have an advantage over the house.
They have a temporary edge. This is because the house must hit