Recently, I organized some of the most widely recognized classic trading systems in the trading community and found that there are reasons these methodologies have persisted to this day. Many top traders worldwide still use these systems for their trading, so today I want to discuss the logic behind these eight major trading systems.

Let's start with the most classic one—the Turtle Trading System. In 1983, the famous financial speculator Richard Dennis conducted an interesting experiment—he wanted to prove whether great traders are born or made. He recruited 13 people and taught them basic trading concepts and his own methodology. What was the result? Over the next four years, these Turtles achieved an average annual return of 80% compounded, which is legendary in trading history. Dennis proved through action that a simple system and rules can turn people with no trading experience into excellent traders.

The core of the Turtle Trading System is straightforward—enter when the price breaks above the highest point of the past 20 trading weeks, and exit when it falls below the lowest point of the past 10 trading weeks. Two derivative systems are based on this logic: one uses a 20-day breakout for short-term trading, and the other uses a 50-day breakout for long-term trading. Because this trading system is so classic, many variations have emerged, and many experts have developed their own methods based on it.

Larry Williams' gap trading system approaches from a different angle. Williams, the creator of the Williams %R indicator, managed to turn $10k into $1.1 million in less than 12 months and won the Robbins World Cup of Futures Trading. He believes that gap trading fundamentally measures price jumps caused by overly emotional reactions. When prices fluctuate repeatedly for 5 to 10 days in a downtrend and then suddenly open significantly lower, only to rebound above the previous day's low, it suggests market energy may be reversing.

Tom DeMark's TD Price Range Trading System emphasizes the importance of time. He has advised major institutions like Soros and Morgan. His core idea is that it’s not just about overbought or oversold conditions, but how long the indicator stays in those zones. To accurately measure buying and selling pressure, he created the TD DeMarker II indicator, linking all price movements to defined supply and demand levels.

The volatility trading system was developed by Lawrence McMillan, an options trading expert. He believes volatility is the speed of price changes. When historical volatility shows a bearish alignment—that is, the volatility range narrows over time—it often signals a calm before the storm, and traders should be prepared.

Martin Pring’s oscillation trading system follows the principle of “extreme to prosperity.” When prices are at extreme oscillation points, reversals are often imminent. Constance Brown’s derived oscillation indicator trading system applies triple smoothing to the RSI indicator to improve signal accuracy.

The Dolphin Trading System emphasizes trend-following and trading on the right side of the market, using moving averages and MACD to determine trend direction, and employing KD crossovers for precise entries and exits. Victor Spolandi’s 1-2-3 rule simplifies trend identification into three steps: trendline breakout, no new highs or lows, and price crossing previous rebound points. Although entries tend to be later, he later introduced the 2B rule to handle false breakouts.

These eight major trading systems each have their focus, but they all embody a common principle—good trading systems don’t need to be complicated; key factors are execution and risk management. If you’re exploring a trading method that suits you, these classic systems are definitely worth studying in depth.