Forex Basic Strategies

Turtle Soup +1 Forex Strategy

Important decision-makers are accountable. The decision to conclude a transaction is the trader’s prerogative, which must take into account the behavior of market professionals and crowds. Many players prefer to wait for the end of the trading day. Therefore, traders who use the strategy Turtle Soup have time to think about an exchange with a more balanced approach. An operation is transferred the next day of negotiation and this strategy, which is updated and is called “Turtle Soup+1”.

The creator of the “Turtle Soup+1” strategy is Linda Raschke. She highlighted the following conditions necessary to build a trading system:

– The market falls to a bottom of 20 bars.

– The previous 20-bar background must have formed at least 3 trading sessions before (for the daily chart).

In this scenario, the trader has the opportunity to:

– Place an order pending to be able to buy in the previous minimum level of 20 bars lower on the second day after the formation of a new bottom of 20 bars.

– Place a stop protection order at the new minimum level of 20 bars lower or at the minimum of the next day, depending on which of them is lower.

– Set a portion of the winnings in 2-6 trading days and use a floating stop order to control the rest of the position.

In early May, in the daily chart of USD/JPY appeared the necessary conditions to implement the strategy «Turtle Soup+1»: a minimum of 20 bars were formed and the previous minimum of 20 bars was created 5 days before. A trader waits for the closing and places a pending purchase order the day after the formation of the new minimum of 20 bars. The activation of the pending order allows us to place a stop order at the minimum level minus a few points and observe the market reversal. After 2 days part of the position closes and the market grows 4.5 figures.

Having a reserve time allows the trader to analyze the situation in different periods of time. In the USD/JPY daily chart RSI was moved to the oversold zone, which may be a confirmation signal of a correction or a reversal of a bearish trend.

Everything that is fair to the bearish market in Forex is also applied in a bullish situation. The algorithm for implementing the “Turtle Soup+1” strategy in bullish conditions is as follows:

– The market is growing at a peak of 20 bars.

– The previous peak of 20 bars must have formed at least 3 trading sessions before.

– Place an order pending sale at the previous maximum level of 20 bars on the second day after the formation of a new peak of 20 bars.

– Place a stop protection order at the new maximum level of 20 bars or at the maximum of the next day, depending on which of them is higher.

– To fix a part of the profits occurs in 2-6 trading days.

– A floating stop is used to control the rest of the position.

A good example is a situation that occurred on the USD/CAD chart. The distance between the new and previous maximum of 20 days is 8 bars, the opening of the position is made the day after the formation of the pattern.

By taking time out, a trader can move to a shorter time frame and see a clear divergence MACD, which is an important investment signal in technical analysis.

In my opinion, the strategy “Turtle soup+1” is more interesting than “Turtle Soup”. It does not require an instant reaction and a trader has time to think well about a transaction. On the other hand, a trader always has the possibility of failing a trade while waiting for the second bar to form, which follows the end of 20 days.

Forex Basic Strategies Forex Swing Trading

How To Trade The Infamous Turtle Soup Strategy?

In this article, we shall be covering the Turtle soup strategy by fading the Donchian channel, and Connor’s RSI strategy.

What is the Donchian Channel indicator?

The Donchian channel is an indicator that considers the high and low for N number of periods. For this particular Turtle Soup strategy, we will be setting the value of N=20, which accounts for the most recent 20 days.

This indicator works based on the highs and lows made by the market. The channel makes a stair-stepping pattern for every high or low made in a period of 20 days.

Below is a chart that shows the Donchian indicator applied to it.

From the above chart, we can clearly see that the top and bottom lines (blue lines) are moving in the form of a stair-stepping pattern representing the highs and lows over the past 20 days. Precisely, the black arrows represent the highs and lows in a look back of 20 days.

Trading the Turtle Soup Strategy

The Turtle Soup is a strategy developed by a trader and author Linda Bradford-Raschke. She published this strategy in one of her books named “Street Smarts: High Probability Short-Term Trading Strategies.” Talking about history, this strategy was taught to a set of novice traders (called the Turtles) by Richard Dennis and William Eckhardt in the 1980s. Also, this strategy is in reference to a well-known strategy called ‘Turtle Trading.’ Over the years, Linda Bradford-Raschke inverted the logic and reasoning behind this strategy and came up with a short-term trading method using this strategy.

Strategy 1: Adding confirmation to Donchian Channel breakout

This is the typical Turtle strategy.

The Turtle strategy using the Donchian channel is simple. When the market breaks above the resistance line, we can prepare to go long. Similarly, when the market goes below the support line, we can go short.

Here are some of the tips and tricks for using this indicator.

  • When the market breaks above/below the lines, make sure that the price is holding above/below it.
  • The candle that breaks the line must be quite strong.

Trading Example

Consider the below figure. Reading from the left, we can see that the market was holding at the upper line of the channel. Later, a huge green candle broke above the channel. Many would hit a buy at this moment, but we wait for a confirmation. When another candle shows a bullish sentiment as well, we can hit the buy at the point shown on the chart.

According to the original Turtle trading strategy, a stop loss of ‘two volatile units is kept,’ which is equal to n-period ATR x 2.

However, to keep it simple, you can keep the stop loss a few pips below the candle, which broke the channel.

Let’s do the converse

In the above example, we saw the typical way of trading the Turtle strategy. In this set of examples, we shall reverse the logic. That is, we will look to go long when the price breaks below the channel and short when the price breaks above the channel. Let’s consider a few examples for the same.

Buy strategy

Let’s say the market makes a 20 day low and is visible on the Donchian channel. Later, the price comes down to that low and even tries to break below it. Once the price shoots right back up to the line, we anticipate on the buy.


  • The new 20 day low must be at least four days apart from the previous 20 day low. So, you cannot compare the low of yesterday and the low of today as the difference is just one day apart.
  • Entry must be 5-10 pips above the previous 20 day low.
  • Stop loss must be placed 1-2 pips below the low of today.
  • Aim for a take profit of 1R.

Sell strategy

The sell strategy is just the opposite of the strategy discussed for a buy. When a 20 day high is challenged for the second time having a gap of at least four days from the previous low, we can look to go short.


  • The 20 day high must be at least four days in the past.
  • Entry must be placed 5-10 pips below the 20 day low.
  • Stop loss must be placed 1-2 pip of today’s low.
  • Aim for a take profit of 1R.

Trading examples

Buy example

Below is the chart of the EUR/USD on the Daily timeframe. Starting from the left, we can see that the market came down and made a 20 day low (indicated by the black dotted line). Now that we have the first low, we wait for the price to down to that low in more than four candles (days). And when the price spikes below the prior low and comes back up, we can hit the buy at the encircled region.

As far as the stop loss and take profit is concerned, we can keep a stop loss 2-4 pips below the low of the present candle and aim for a good 1:1 RR on this trade.

Sell example

In the below chart, the market made a 20 day high up to the black dotted line. Later, the price goes above the previous 20 days high yet again. Here, the price holds above the line and then drops below the next candle. So, once it’s below by 5-10 pips from the previous 20 days high, we can go short. And the stop loss and take profit are self-explanatory.


With no disrespect to the turtle trading strategy, we can conclude that this strategy can be used in both ways. This strategy is backtested and proven by a number of experienced traders. Try this strategy in your trading activities and let us know if you have any questions in the comments below. Happy Trading!