No wonder they say that a talented person is talented in everything. A striking example of this is the well-known woman trader Linda Raschke.
We think there is no point in talking about her. Information about this bright personality is easy to find on the Internet.
This and the pattern “Three movements” and the strategy Momentum Pinball and her books can easily be found in a special section of the site…
So today, we will introduce you to another strategy of L. Raschke, with the intriguing name Turtle Soup.
Forex turtle strategy
The Turtle Soup trading strategy is a fairly simple strategy developed by Linda Raschke, based on the Turtles strategy invented for the futures markets. The Turtle Soup trading system is free from many of the shortcomings of its predecessor and allows you to make good profits.
The essence of this strategy is to trade on pullbacks and price reversals. Thus, we can say that Turtle Soup is well suited for day trading – intraday trading.
But let’s not talk a lot about this new strategy, but rather learn it in practice.
Using the turtle soup strategy
So let’s trade Japanese candlesticks to buy using the Turtle Soup strategy:
1. Open the candlestick chart of any currency pair you like. Set the period – one day (D1, Daily), you can choose a smaller timeframe, for example, one hour (H1).
2. Now, it is necessary to count 20 candles back from the current candle. In our case, this will be a 20-day period. In this period, we need to find the maximum and minimum prices. We do not take into account the current candlestick!
!!! An important note – the selected high and low prices must be at least 4 candles away from the current moment!
3. We are waiting for the current candlestick to cross the minimum of the period we marked. As soon as this moment has come, we place a pending order to buy (Buy Stop), 5-10 pips above the desired minimum.
!!! Attention! If the order did not work at the current candle (in our example, during the day), the deal did not occur. The order should be deleted and start all over again.
4. Of course, do not forget about the stop loss. When the pending buy order is triggered, we should place a stop loss a couple of pips below the low price of the current candle.
5. Now, we monitor the situation. As soon as our open position enters the profit zone, we move the stop loss to the point of its opening and set a trailing stop. Its value depends on the characteristics of a particular currency pair. If you are trading EURUSD as in our example, then the trailing stop value should be in the range of 30-50 pips.
Using this strategy, you can re-enter the market if closed by reaching stop loss in the first two days after opening a position. In this case, we put the pending order again at the same level. Secondly, it is natural to trade for sale as well. The rules are similar but reversed. The signal will be the candlestick crossing the maximum. We will place a pending sell order (Sell Stop). Oh yes, why is the strategy called Turtle Soup? Well, perhaps Linda Raschke was so annoyed by the failures in the Turtles trading system that she decided to cook her own soup from the harmful “turtles.”