Trading is an interesting art form. Most of the theories in this book have to do with win-lose psychology. Research has shown that people are more excited about losing money than about making money. The negative effect of losing is almost 3 times stronger than winning. Professional traders know this and make a lot of money from it.

Why is this important to me?

I understand that you are going to spend the next 7 minutes reviewing this book summary, so it should be actionable. That said, this is important because people are looking for ways to make money in the markets. Financial planners have made a killing in the last 25 years; sadly most of your clients have not. This is a paradox that has people worried about their retirements. When you enter a 401K, it is touted as just putting money in and forgetting it. The problem here, as people know, most 401Ks are really bad investments. People invested money for years and the account seems to have not moved or worse, it is less than what you entered. Market experts will tell you to just think long term and keep investing money. There are so many problems with this logic, but I’m not going to get into that now.

Financial education must be acquired by each person. I am responsible for my financial future and so are you.

Curtis Faith was an original tortoise and at age 19 he made $ 31.5 million in earnings. Let’s examine the what, why and how around turtles.

1. What is the “way of the turtle”? This is a principle-based trading system that outperforms the market for a long period of time. This book examines the system and shows you how they did it and why some turtles were more successful than others.

2. Why is this important? We discussed this in the last section, but based on my own quest for financial education, I wanted to study the most successful traders and understand the psychology that surrounds them.

How does it work? The how is most of the book. I will examine the psychological side of why some turtles fared better than others. There is a ton of math in these trading systems that I’ll let you dig into on your own.

1. Rules for living: Trade with an advantage, manage risk, be consistent and keep it simple. All of Turtle’s training, and indeed the foundation for all successful trading, can be summed up in these four basic principles.

2. Trade with an advantage – Are you familiar with black jack? This is the only casino game that can be beaten without cheating. This is so because the game has memory. Counting cards and playing as a team is one way to create an advantage so that the odds swing in your favor. The same is needed in commerce. The turtles were trend traders and they understood how to create an advantage to make money.

3. Manage risk: In trading terms, there is price risk and liquidity risk. Price risk is pretty straightforward, if you’re betting that price will go up over time, then your risk is that it won’t move or go down. The liquidity risk consists of the number of people who will accept your operation. The Forex trades 4 trillion dollars a day. This transforms all the other trading platforms in the world combined. The New York Stock Exchange is trading $ 32 billion a day to give you an idea.

4. Be consistent – This is where Curtis beat all the other turtles. He just stuck with the system through thick and thin. Being consistent is the way to trade heaven, but actually doing it is another story. There is a concept in trading called withdrawal that happens to all traders. This means you can get a 100% return in six months and then have a 20% reduction in your earnings in one day. When this happens, the coherence disappears. The herd effect takes over and people run for the hills at the same time. The mental side of trading is by far the biggest asset or liability when running any system.

Curtis sums up the entire mechanical trading system in the book. Covers markets, position size, entries, stops, exits, and tactics. This is great information to know, especially if you are thinking of investing money. Personally, I just got involved with a professional business group and will only allocate 3% of my investment capital. I realize that if I need heart surgery, I won’t pick up a book and do it myself. There are real professionals and I don’t want to be eaten. In the book, Curtis and the rest of the turtles were trained for only two weeks but were mentored by professionals.

I hope this short summary has been helpful to you. The key to any new idea is to incorporate it into your daily routine until it becomes a habit. Habits are formed in just 21 days. One thing you can get out of this book is a financial education. Understanding trade is a key component of financial education. This doesn’t mean you have to, but understanding it is important.