Turtles followed a simple entry system based on the channel breakout system, and they were given two entry breakout systems called system 1 and system 2, and they can choose freely from either system for their entries.
System 1: based on a 20-day breakout
system 2: based on a 55-day breakout
A breakout out happens when the price exceeds the high or low of a particular number of days. They always traded when the breakout happens and don’t wait until the day close or the open of the following day. If there were opening gaps the turtles would enter a position if the market opens through the price of the breakout.
Entry happens if the price pass by a single tick1 the high or low of the preceding 20 days. The Turtles would enter by 1 unit to initiate the trade.
This entry point will be ignored if two conditions happen together:
1- The last breakout would have resulted in a winning trade, ie the previous trade was successful whether it was taken or not according to this rule
2- If the price of the previous trade had moved by 2N against the exit position of that particular trade.
Regarding point one, the Turtles didn’t account for the direction of the last trade whether it is long or short as long as it resulted in a winning trade.
If system 1 was ignored due to those rules an entry would be made at the 55-day breakout to avoid missing a major price movement trend.
Entry happens if the price passed the 55-day breakout point by a single tick. This system would be taken whether or not the previous breakout (trade) had been a winner.