Turtle Soup Trading is one Swing Trading strategy which has the best winning percentage for me.
“Turtle Soup” has been popularized by Market Wizard Linda Raschke & Laurence A Connors in their book “Street Smarts -High Probability Short-Term Trading Strategies”.
This is a very effective contrarian style trading strategy followed by Swing Traders to trap the crowd as price breaks a previous high or low and then reverses immediately.
Criteria for Buy
- 20 day new low today
- Previous 20 day low at-least 4 sessions earlier
- When market falls below the previous 20 day low, place an entry buy stop 5-10 ticks above the previous 20 day low.
Criteria for Sell:
This is reverse of buy condition.
- 20 day new high today
- Previous 20 day high at-least 4 sessions earlier
- When market falls rises the previous 20 day high, place a short sell entry stop 5-10 ticks below the previous 20 day high.
Lets understand this Turtle Soup Trading strategy better with the below example.
Jindal Steel made a new 20 day low of 182 on 4th Aug’13 and 5 days before, it made a previous 20 day low of 187.
So, when do we buy?
Place an entry buy stop 5 ticks above the previous low of 187.
Stop Loss:
After successful buy entry at above 187, place a stop loss 5 ticks below the new 20 day low of 182.
When do I exit & book profit of the trade?
Look out for the next higher resistance above your entry point to book your profit & get out of the trade. If there is no resistance nearby, traders can protect their profit using trailing stop loss.
Here, in this trade, we can see some resistance at 210.40. So, we can exit before 210.
Great. This is how you trade the Turtle Soup Trading Strategy – a contrarian style of trading to trap the Sellers.
Let’s take another example to understand the Turtle Soup Trading that traps the Buyers.
We can see a Turtle Soup set up in HDFC in Nov’2021 where we see 20 days new high at around 3000 Rs. After 5 days, we see another 20 day high formed at around 3022 Rs.
When to short sell?
Place a short sell entry 5 ticks below the previous high of 3000, say around 2991
Stop Loss:
After successful short sell entry, place a stop loss above new day high of 3022, say around 3030.
When do I exit & book profit of the trade?
Look out for the next higher support above your entry point to book your profit & get out of the trade. If there is no resistance nearby, traders can protect their profit using trailing stop loss.
Here, in this trade, we can see support at 2875. So, we can exit around 2890.
Hope you love this wonderful strategy and start using this strategy to trade successfully like Pro Swing traders.
