REEL · STUDIO · 257 SECONDS · SUNG IN ENGLISH · ENGLISH SUBTITLE TRACK
Rules Through the Drawdown
The 1983–84 training experiment, 20/55-day breakouts, N sizing, stops, additions and exits. The companion guide keeps every claim inside the film's reviewed BRIEF.md fact boundary.
Chapters
What the film explains
Was the experiment a documented cash wager?
No. The sources support a debate and real-account experiment, not a documented cash wager.
What is the difference between Systems 1 and 2?
System 1 is a filtered 20-day breakout with a 55-day failsafe; System 2 takes every 55-day breakout.
How many Units could be held in one market?
Up to four, added in 0.5N steps from actual fills.
Do the original rules guarantee profit today?
No. Markets, costs and contracts change; exact current data must be backtested.
Read the illustrated guide
English · ไทย · 日本語. The guide includes definitions, all twelve teaching diagrams, sources and honest limits.
Lyrics and English subtitles
| English | English | Time |
|---|---|---|
| Chicago, nineteen eighty-three, the pit is loud | Chicago, 1983 — the pit is loud | |
| Two old friends and partners step out of the crowd | Two old friends and partners step out | |
| One question between them, simple and old | One old, simple question between them | |
| Are traders born, or can the craft be told? | Are traders born — or can it be taught? | |
| Richard Dennis, Bill Eckhardt, in mid eighty-three | Richard Dennis & Bill Eckhardt, mid-1983 | |
| Made or born? They argued it, patiently | Made or born? They debated it | |
| So Dennis said, let's test it, a real account on the line | Dennis: test it with a real account | |
| He ran ads in the Journal, in Barron's, in the Times | Ads in the WSJ, Barron's, the NY Times | |
| About a thousand answered, every time the ad ran | About 1,000 answered each ad | |
| Twenty-three in all, two classes, that was the plan | 23 recruits in all, across two classes | |
| December eighty-three, two weeks in a Chicago room | Dec 1983: two weeks of training, Chicago | |
| Trading real money when the new year bloomed | Trading began in early 1984 | |
| December eighty-four, a second class stepped in | Dec 1984: a second class trained | |
| Like turtles grown in Singapore, it is said, the name begins | It is said: 'grow them like turtles' | |
| Twenty or fifty-five days, the channel breaks, we're in | 20- or 55-day channel breaks: enter | |
| One N moves one percent, that's the unit we begin | Unit: a 1N move = 1% of equity | |
| Add a half N, three times, four units, no more | +0.5N × 3, then max 4 Units | |
| Two N is the stop, and you set it before | 2N stop, set before you enter | |
| Ten-day or twenty-day, the turn says walk away | Exit on the 10- or 20-day turn | |
| Rules through the drawdown, we follow them every day | Rules through the drawdown, every day | |
| System One looks back twenty days, the high and the low | System 1: prior 20-day high and low | |
| A tick above, you buy it, a tick below, sell and go | Buy 1 tick above · sell 1 tick below | |
| If the last breakout won, you skip this one, strange but true | Last breakout won? Skip this signal | |
| It lost if two N hit before the ten-day exit came through | Loss = 2N against before 10-day exit | |
| Skip one, and fifty-five days is the failsafe way in | Skipped? The 55-day breakout is the failsafe | |
| System Two, fifty-five days, a tick past, take it, lose or win | System 2: 55 days ±1 tick — take every one | |
| True Range takes the biggest, day by day, of three | True Range = the largest of three | |
| High to low, or yesterday's close to high or low, you see | H−L · |H−prev close| · |prev close−L| | |
| Start N with twenty True Ranges, a simple average, plain | Start N: simple average of 20 TRs | |
| Then nineteen old N plus today's range, over twenty again | N = (19 × old N + today's TR) ÷ 20 | |
| N times the dollars per point, that's the dollar swing | Dollar volatility = N × $ per point | |
| One percent of equity, divided by it, round down, that's the unit you bring | Unit = 1% equity ÷ dollar vol, round down | |
| Two N from the entry is the stop, below a long, above a short | Stop: 2N below a long, 2N above a short | |
| One unit, two N, is two percent, before the slippage, of course | 1 Unit × 2N = 2% (before slippage) | |
| Twenty or fifty-five days, the channel breaks, we're in | 20- or 55-day channel breaks: enter | |
| One N moves one percent, that's the unit we begin | Unit: a 1N move = 1% of equity | |
| Add a half N, three times, four units, no more | +0.5N × 3, then max 4 Units | |
| Two N is the stop, and you set it before | 2N stop, set before you enter | |
| Ten-day or twenty-day, the turn says walk away | Exit on the 10- or 20-day turn | |
| Rules through the drawdown, we follow them every day | Rules through the drawdown, every day | |
| Each add, a half N from your last real fill, not the break | Add every 0.5N from your last actual fill | |
| Raise the old stops half an N with every unit you take | Each add: raise earlier stops 0.5N | |
| Longs leave on a ten-day low in One, a twenty-day low in Two | Long exit: S1 10-day low · S2 20-day low | |
| Shorts leave on the high, and all the units go, not a few | Shorts exit on the high — exit ALL Units | |
| Four in one market, six when markets closely tie | Max 4 in one market · 6 closely linked | |
| Ten loosely linked, twelve in one direction, that's the ceiling high | 10 loosely linked · 12 in one direction | |
| If equity drops ten percent, cut the notional size by twenty | Equity −10% → notional size −20% | |
| Another ten down, cut again from the new base, gently | Another −10%? Cut again from the new base | |
| It can't tell you when a trend will start, can't stop the chop | It can't predict trends or stop whipsaws | |
| Gaps and slippage can jump right past your stop | Gaps and slippage can jump past your stop | |
| What worked in eighty-four is no promise for today | 1984 results are no promise for today | |
| Backtest your market, data, costs, before your money's in play | Backtest your market, data, costs first | |
| Most breakouts fail, most never turn to trends | Most breakouts never become trends | |
| Wins came months apart, even a year or two, before the dry spell ends | Historically: months, even 1–2 years apart | |
| Confidence, consistency, discipline to stay | Confidence, consistency, discipline | |
| Take the next valid signal on the losing day | Take the next valid signal while losing | |
| Twenty or fifty-five days, the channel breaks, we're in | 20- or 55-day channel breaks: enter | |
| One N moves one percent, that's the unit we begin | Unit: a 1N move = 1% of equity | |
| Add a half N, three times, four units, no more | +0.5N × 3, then max 4 Units | |
| Two N is the stop, and you set it before | 2N stop, set before you enter | |
| Ten-day or twenty-day, the turn says walk away | Exit on the 10- or 20-day turn | |
| Rules through the drawdown, we follow them every day | Rules through the drawdown, every day | |
| Curtis Faith was nineteen, one of the class | Curtis Faith joined at 19 | |
| Two thousand three, the rules came out free at last | 2003: the original rules, free | |
| Two thousand seven, Way of the Turtle, the whole story told | 2007: his book, Way of the Turtle | |
| The rules are on the page, the hard part is to hold | Rules on the page — holding is the hard part |
How it was made
- Song — “Rules Through the Drawdown”, English, male vocal.
- Diagrams — twelve coded teaching diagrams from the film package.
- Player — reviewed phone MP4 now;
LONG_VIDEO_IDremains empty until a public YouTube ID exists.
Educational content, not financial advice. See Disclosure.