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Mean reversion
How does Turtle Soup use the failure of Turtle Trading?
Turtle Soup
What it bets
If a break of a 20-day high or low cannot hold, price comes back into the range, instead of running the trend the turtles were waiting for.
How the rule is written
The version from Larry Connors and Linda Bradford Raschke: after price breaks an extreme of about 20 days and then returns inside the range from before the break, trade against that break. The target is the other side of the range, or a short exit. It specifically trades the kind of market that most often proves the turtle short system wrong.
When it fails
The first pullback of a real trend also looks like a failed breakout. Trading against it means the trend keeps carrying the position.
Do not confuse it with
The turtles enter when the breakout happens. Turtle Soup enters when the breakout fails. The same 20-day high and low, the opposite direction.