I have just spent the weekend reading the book “Way of The Turtle”, written by Curtis M. Faith, one of the original “turtles” trained by Richard Dennis to be a commodities trader.
I have to say, it is a truely exceptional book. I read many books on investing/trading, probably several hundred in total, and this book has shot right up to the top of my list. From picking it up I almost couldn’t put it down until the end.
Just to give you an idea of some of the ideas in the book here are some quotes:
He talks a lot about the issues of optimisation, curve fitting, and overfitting, something everyone here on p123 should be concerned about.
He then goes on to use a series of graphs to show why this is the case. Its remarkable stuff. He shows that optimisation is worthwhile, just understand that future results won’t be as good as the maximally optimised simulation, though a de-optimised simulation may more accurately correlate to future results. Confused? Read the book! Its worth it.
He also makes some mention of the issues of pyschology:
A theme he touches on quite a lot is just how simple the Turtle trading system was, (he fully discloses it), and how people cannot believe such a symple system could have made Richard Dennis and others multi-millionaires.
He also touches on a subject we have noted recently - that if too many people enter the same trading space, then there will be a squeeze, but that will drive out a lot of players:
He said early in the book that Richard Dennis was looking for smart people. Curtis is definately very smart, and the book is well thought out with lots of issues discussed.
He finishes with a comment I think we can all take heart with:
Really, even if the book cost a thousand dollars I would say its good value!
If anyone has their own recommendations for other books please let me know!