Introduction
The Turtle Trader EA v1.0 MT4 is an automated trading system designed to replicate the legendary Turtle Trading Strategy, originally developed by Richard Dennis and William Eckhardt in the 1980s. This strategy, known for its disciplined trend-following approach, has been adapted into an Expert Advisor (EA) for MetaTrader 4 (MT4), allowing traders to automate breakout-based trades with robust risk management.
The Origins of the Turtle Trading Strategy
The Turtle Trading experiment was a groundbreaking study in trading psychology and systematic trading. Richard Dennis, a successful commodities trader, believed that trading success could be taught rather than being an innate talent. He recruited a group of novice traders, trained them in a rules-based trend-following system, and turned them into profitable traders—dubbed the “Turtles.”
The strategy relies on:
- Breakout entries (20-day and 55-day highs/lows)
- Volatility-based position sizing (using ATR)
- Strict risk management (2% risk per trade)
- Pyramiding (adding to winning positions)
How the Turtle Trader EA v1.0 MT4 Works
The Turtle Trader EA v1.0 MT4 automates the classic rules while adding modern optimizations for Forex markets. Here’s how it operates:
Entry Rules
- System 1 (Short-term breakout): Enters trades when price breaks the 20-day high/low, exits at 10-day low/high.
- System 2 (Long-term breakout): Enters trades when price breaks the 55-day high/low, exits at 20-day low/high 4.
Risk Management
- ATR-based stop-loss: Adjusts stops based on market volatility.
- Position scaling: Reduces risk by 10% for every 20% drawdown in the account 4.
- Max risk per trade: Typically set at 1-2% of account balance 2.
Pyramiding (Adding to Positions)
- The EA can add up to 4 positions in a trending market, increasing exposure while keeping risk controlled 4.
Key Features & Settings
Recommended Settings
| Parameter | Recommended Value |
|---|---|
| Timeframe | Daily (D1) |
| Currency Pairs | EURUSD, GBPUSD, USDJPY, AUDUSD |
| Risk per Trade | 0.5%-2% |
| ATR Period | 20 |
| ATR Multiplier | 2-3 |
| MA Filter (Optional) | Enabled (100/50 MA) |
Optimization Tips
- ATR Multiplier: A lower value (e.g., 2) increases trade frequency but may lead to more false breakouts. A higher value (e.g., 3) filters out noise but may miss some trends 1.
- MA Filter: Adding a moving average filter (e.g., 100 MA) can improve win rates by 5-10% 1.
Performance Insights: Backtests & Live Results
- ATR Multiple = 3: +54% return, 36% win rate, 24.4% max drawdown 1.
- ATR Multiple = 2: +78% return, 41% win rate, 18.3% max drawdown 1.
- With MA Filter: +98% return, further reducing drawdowns 1.
- Works best in strong trending markets (e.g., during macroeconomic shifts).
- May underperform in choppy or sideways markets (common in Forex) 2.
- Requires patience, as trades may take weeks or months to fully develop.
Pros & Cons of the Turtle Trader EA v1.0 MT4
Pros
Proven Strategy: Based on a historically successful trading method.
Automated Execution: Removes emotional trading decisions.
Adaptive Risk Management: Adjusts position sizes based on volatility.
Works on Multiple Pairs: Can be applied to Forex, commodities, and indices.
Cons
Slow Returns: Requires holding trades for extended periods.
Drawdowns Can Be High: Losing streaks are common in trend-following systems.
Not Fully “Set & Forget”: Needs occasional parameter tuning based on market conditions.
Who Should Use This EA?
- Long-term traders who prefer swing or position trading.
- Disciplined investors comfortable with drawdowns.
- Algorithmic traders looking to diversify with a trend-following system.
Final Verdict
The Turtle Trader EA v1.0 MT4 is a solid automated adaptation of a legendary trading strategy. While it won’t make you rich overnight, it provides a systematic, rules-based approach to capturing long-term trends. Traders should combine it with proper risk management and avoid over-optimizing settings for short-term gains.
For best results, run it on multiple currency pairs and consider using a VPS for uninterrupted trading. If you’re looking for a time-tested, low-maintenance EA, this could be a valuable addition to your trading arsenal.
