Guide · Breakouts & channels
Does Turtle System 1 work?
Across 375 stocks, Turtle System 1 cut the worst fall on 93%, beat buying and holding on risk-adjusted return on 16% and on raw return on 13%. Mainly a seatbelt: it softened the big falls on most stocks, but usually gave up return to do it.
What it predicts
The Turtles' short-term system: buy a 20-day breakout, sell a 10-day low, but skip a breakout if the last one would have been a winner.
- In on a close above the prior 20-day high, unless the previous breakout would have won. Then wait for a 55-day breakout instead.
- Out on a close below the prior 10-day low, or 2 N (two average true ranges) below the entry.
Breakouts & channels plays bet that when price escapes the range it has held for weeks, the move that follows tends to run. The family guide
How to use it
- Expect to be wrong more often than right: only 31% of its calls worked. Its results come from the size of the winners, so following it means sitting through strings of small losses.
- It sits in cash much of the time (holding on about 33% of days), so judge it on risk-adjusted return rather than on matching a rising market.
- It worked best on Micro caps (50% beat holding on risk-adjusted return) and worst on Indexes & ETFs (0%).
- Use it as one input. Your signal combines the plays you count with the other factors you weight into one call.
When it worked
Turtle System 1 did best against holding in the 2008 crash (+34% median gap) and worst in the 2020–21 rally (−38%). Median gap in return against holding the same stock (per year over stretches longer than 18 months; crypto excluded).
| 2008 crash | Recovery 2009–19 | COVID drop | 2020–21 rally | 2022 bear | Since Oct 2022 | |
|---|---|---|---|---|---|---|
| Turtle System 1 | +34% | −13% | +24% | −38% | +12% | −13% |
Where it worked
By kind of stock: how often it beat holding on risk-adjusted return, and the median Sharpe ratio gap.
| Group | Beat holding, risk-adjusted | Sharpe gap |
|---|---|---|
| Micro caps | 50% | -0.05 |
| Financials | 23% | -0.14 |
| Healthcare | 22% | -0.29 |
| Industrials & rentals | 22% | -0.17 |
| Industrials & materials | 22% | -0.34 |
| Media & telecom | 20% | -0.30 |
| Big tech | 17% | -0.33 |
| Real estate | 16% | -0.20 |
| Energy & power | 15% | -0.28 |
| Software & devices | 15% | -0.36 |
| Semiconductors | 13% | -0.41 |
| Consumer & retail | 9% | -0.39 |
| Metals & mining | 8% | -0.29 |
| Sectors | 0% | -0.35 |
| Indexes & ETFs | 0% | -0.24 |
Where it helped most
Sharpe ratio gap against holding, stocks with 3+ years of history
Right now
Turtle System 1 holds 56 of 377 names as of the Oct 13, 2026 close.
Changed its call in the last two weeks:
Backtest results since 2005 (or as long as each stock has traded), against holding the same stock over the same dates, after 0.05% per switch. Past results don't promise future ones. This analysis does not constitute trading advice. Please meet with an advisor or independently review sources before making any decision.