Richard Dennis Turtle Trading Strategy (Donchian Channel)

Explore the famous Richard Dennis Turtle Trading Strategy updated with Donchian Channels. Learn entry and exit logic, backtested on S&P500 futures, daily timefr

Published · Updated · Methodology: Technical Indicators

Part of: Trend Following

  • Methodology: Technical Indicators
  • Content type: strategy
  • Timeframes: 1 Day
  • Markets: S&P500 Futures (ES1!)

Indicators used

  • Donchian Channel

Source video

Decoded from: Richard Dennis ganó $200M con esta Estrategia de Trading (la puedes copiar) by Hobbiecode — watch the original

Key timestamps:

  • 0:00 - Introducción
  • 1:10 - La estrategia
  • 4:42 - Veamos en tradingview
  • 8:30 - ¿Funciona?
  • 9:55 - ¡Gracias y dame un fuerte LIKE!
  • 2:44 - Entry rule: 'La base de la estrategia es totalmente sencilla consiste en cerrar el precio de los últimos 20 días y esperar a que el precio rompa uno de los dos extremos'
  • 3:00 - Exit rule: 'la salida del mercado es la misma cuando el precio rompe el mínimo de los últimos 20 días es la señal de salida'
  • 3:30 - Indicator settings: 'le agregamos el indicador y le colocamos 20 periodos'
  • 4:00 - Entry rule: 'cuando el precio supere por la parte superior el canal deberemos de realizar una compra'
  • 4:10 - Exit rule: 'cuando el precio toque la línea de abajo es la señal para salir del mercado'
  • 5:00 - Donchian Channel shift: 'hay que el don Channel pero con un shift 1 es decir hasta la vela anterior'
  • 5:20 - Entry rule: 'entramos en compra cuando el precio cruza el don Chin Channel desde la vela anterior hasta 20 atrás'
  • 5:30 - Exit rule: 'y salimos cuando sucede el caso contrario'
  • 5:40 - Short entry rule: 'cuando el precio rompa la parte baja del Canal realizaremos nuestra entrada a la baja'
  • 6:00 - Short exit rule: 'y cuando el precio toque la línea de arriba saldremos del mercado'
  • 6:30 - Continuous position: 'en todo momento debemos de tener una operación abierta ya sea en compra o ya sea en venta'

Strategy overview

A Donchian channel breakout is one of the oldest mechanical trend-following ideas in the book: track the extremes of a recent lookback window on the chart and treat a break beyond one of those edges as the signal to be in the market. What sets this entry apart is that it is named after a person and an experiment rather than after a condition. The setup arrives pre-loaded with a story — Richard Dennis, the Turtles, and a headline dollar figure — and that story does more work in the title than the indicator does.

In the early 1980s Dennis and his partner Bill Eckhardt settled a disagreement about whether trading could be taught by recruiting a group of complete novices, handing them a written mechanical system, and funding them with real money. So the video's promise that you can copy it is not a marketing flourish bolted onto the strategy; it is a restatement of the experiment's own founding thesis, which is why this particular setup keeps circulating with its rules in the open. The distinction worth holding onto is between the entry and the package. The figure in the title belongs to one trader's career, not to a breakout condition, and what the Turtles are remembered for rested on a much larger apparatus: a broad basket of loosely correlated futures markets, position sizes scaled to each market's volatility, and holding periods measured in months rather than sessions. An indicator field and a timeframe can carry the trigger. They cannot carry portfolio breadth, sizing discipline, or the market and cost conditions of forty years ago.

The source video is a walkthrough by the Hobbiecode channel that moves from the concept to a hands-on TradingView section, and it is worth noting that it reserves a dedicated chapter for the question "¿Funciona?" — does it work — rather than treating the historical result as settled. That is the right question for a strategy whose best-known evidence predates electronic execution. This record catalogs the setup at the level of its building block, a Donchian channel read on daily bars, which already tells you something about its intended pace: on daily data, signals are rare and each one commits you for a while, so the experience of trading it is dominated by waiting and by drawdown tolerance rather than by execution skill. The walkthrough itself lives in the source video.

Topics

turtle trading strategy · donchian channel · richard dennis strategy · trading strategy · price action · es futures · pine script · tradingview strategy · daily timeframe strategy · technical indicators · trend following · long short strategy · donchian channel trading

Frequently asked questions

What is the Turtle Trading strategy?

It is a mechanical trend-following system associated with trader Richard Dennis, who in the early 1980s taught a written set of rules to a group of trading novices — nicknamed the Turtles — to test whether trading could be taught rather than being an innate talent. The entry logic is built around breakouts from a recent price range, which is why it is commonly presented today using a Donchian channel.

What does a Donchian Channel have to do with the Turtle system?

The Donchian channel, named after trend-following pioneer Richard Donchian, plots the highest high and lowest low over a chosen lookback window. It is the natural chart representation of a range-breakout rule, so it is the indicator most often used to display and automate Turtle-style entries on modern platforms.

Does the Turtle strategy still work today?

That cannot be asserted from the historical record alone, and the source video treats it as an open question — it devotes a separate chapter to asking whether it still works rather than assuming it does. The original results came from a diversified futures portfolio traded in a very different market and cost environment, so any conclusion about today requires testing on current data for the specific instrument you intend to trade.

Why is this framed as a daily-timeframe strategy?

Because a breakout from a multi-day range is defined in days, the daily chart is where the signal exists in its intended form. That makes it a low-frequency approach: few trades, long holds, and results that depend heavily on sitting through open drawdown. Strategy Decoder catalogs strategies like this one from video sources so you can identify the structure and evaluate it on TradingView yourself.

About this strategy page

This trading strategy was decoded by Strategy Decoder's AI from a public YouTube trading video and turned into a structured, reviewable specification. In the interactive app this page shows the full entry and exit logic, risk management settings, the indicators involved with their parameters, AlgoWizard-compatible logic and a Pine Script export ready for TradingView backtesting — plus an automated backtest verdict when one has been computed for this strategy.

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