Russell Sands Responds To His Critics

1. If you’re such a good trader, why do you teach seminars
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Well, I could give you a whole bunch of charitable talk about how I enjoy helping people,
which is true, but the real crux of the matter is that the most important reason is money.

I have some valuable information, I am a good teacher, and people are willing to pay me for it.
I am a real (and profitable) trader, but even the best traders in the world go through some
losing periods. Teaching is guaranteed income, with no variance, and no drawdowns.

I run a business and finance a household, and have expenses to pay every month. I cannot very
well tell my programmer or my banker that I will pay them their salary or mortgage payment the
next time I catch a big trade (whenever that may be). Also, if the teaching income allows me
to pay all my business and living expenses, then I can allow the trading profits to build up
and accumulate in my account.

And finally, people tend to like to do what they’re good at, and I happen to be very good at
teaching. Maybe better than I am at trading. Many people, from large money managers to exchange
executives, have said so. I still think I’m a pretty good trader, with over twenty years experience
and still going strong. But you know, some of the best hitting and pitching coaches in baseball were
only ‘average’ players. So even if my trading track record is not hall of fame material, that doesn’t
mean I am not well qualified to teach others.

I also like to make money. And my time is valuable.


2. Russell was fired from the Turtle program for not following the rules, and never made any money trading
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There has always been a lot of controversy surrounding this rumor, and the truth of the matter is that
I never was fired, but that I resigned. And my disagreements, if any, with Richard Dennis, had nothing
to do with not following the rules. I resigned over a difference of opinion as to what was ‘secret’
information and what was common sense. I came to this job with more experience than most, and it was
common sense to me that you trade larger volatility positions with smaller size, and vice versa. I was
overheard discussing this with some of my option trading friends one day after work, and all of a sudden
I was accused of leaking out proprietary information. I thought it was silly then, and twenty years later,
I still think it’s silly.

As for not making any money, well, 1984 was a tough year. The markets were choppy, and nobody made any money
for about the first nine months of the year. Rich himself lost money, and kept telling everyone else that
losing money was not an indication of doing anything wrong. In fact, at one point he even came in and said
that anybody who was making money at that time was probably doing something wrong (not following the rules).
Of course, extrapolating what happened in a nine month period over twenty years ago into saying that I have
never made any money trading, is also pretty silly. If I didn’t start making good money at some point,
how could I possibly have any credibility to still be in this business.



3. Other people are willing to sell the Turtle system for less money (or for more money)
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I hate to talk badly about other people, even when they talk badly about me. I have always held myself above that, and will continue to do so. There are a couple of other guys out there that are marketing “turtle” trading courses, and saying bad things about me to boost themselves up. I really have better things to do than get into a pissing contest with these clowns.

There is one guy who sells a course for about $1,000, which is a lot cheaper than mine. The only problem is, he is not a Turtle, never was a Turtle, and in fact, I have never been able to find out exactly who or what he is. Except that he has a nice slick website, and apparently a lot of experience with marketing various products over the internet. He has somehow learned some of the Turtle material, but by no means has all of it. And what is even worse, I have heard from many of his disgruntled customers that he is impossible to get hold of, and his follow up support is non-existent.

On the other end of the scale, there is another fellow, who is indeed a legitimate Turtle, and in fact one of the better ones as far as I can remember. This guy wants to give away the Turtle rules for free on his website, because he believes (as Richard Dennis has said in the past), that nobody is going to have the discipline to follow them anyway. And of course, he is right. But then his company wants to offer you a week long private trading course for the paltry fee of $25,000. Well, if you have that kind of money, please go and be my guest. But I just can’t imagine what he can teach you that I can’t that would possibly be worth that kind of money, or anything even remotely close.

The bottom line is that the material is only half the story, the more important half is the way it is taught. I know guys who are brilliant traders, but they couldn’t explain to you the first thing they do, because either they can’t quantify it, or they just don’t have the right communication skills. The value I give is not in just giving the rules, but in explaining how they work, how and when and where to use them, and to support them all with historical testing to show they really do work.


4. The Turtle system has very bad draw downs
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Yep, it’s true. But it has been my experience the draw downs typically come after a big run up in equity i.e.. after it has done really really well. Show me any good system that doesn’t go through bad periods. It just doesn’t exist. It is a fundamental law of economics, if you want to get a reward, you have to take some risk. If you are not willing to take the risk, you are don’t deserve to make anything. What is important is that the risk and reward be commensurate with each other. And in my opinion given amount of risk (and, of course, there is risk involved in trading), there is no greater profit potential than the Turtle system.

Of course, if you are not comfortable with the risk, you can also reduce your leverage and trading size down to where you can sleep at night. The great power of the Turtle system is the flexibility of the money management rules, which are designed to let you choose your own level of risk and reward, and to keep you in the game during the rough periods. Hell, anybody with a computer these days can figure out halfway decent buy and sell signals, it’s money management that is most crucial.


5. The Turtle system just doesn’t work any more
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Of all the objections and criticisms I hear, this has to be the silliest. Yes, of course, there are periods when the method just doesn’t work. False breakouts produce losses, and it can go this way for months at a time. But this is a long term system, one that has been consistently profitable for over twenty years, and I believe it will continue to do so.

But hey, don’t take my word for it. Thank god for machines like computers and programs like Tradestation. There is no computer program in the world that can predict the future, so I can’t guarantee that the Turtle method will continue to be profitable forever.  But I can show you that it has been very consistently profitable almost every year since Dennis and Eckhardt taught it to us back in 1983. And there are no tricks here, no curve fitting, no optimizing. The exact same rules, applied the exact same way, to all the different markets, year after year. I couldn’t make this stuff up if I wanted to. You can read the code and print out the results for yourself.

This stuff works, plain and simple. If you learn the rules, and have the patience and discipline to follow them, you should be fine. If somebody, be it Russell Sands or Richard Dennis, or anybody else, messes up and doesn’t follow their own rules, you can say whatever you like about the personal disciplinary shortcomings of that person as a trader, but that still in no way will invalidate either the legitimacy or the profitability of the system itself.

 

Past performance is not necessarily indicative of future performance.  The risk of loss in trading futures contracts, commodity options or forex can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.  You should read the “Disclaimer” accessed by the link below. 

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