Curated by Andrew Lockwood, London Futures Exchange Veteran (35+ Years Exp)
While the classic Turtle Trading strategy focuses on following breakouts of key highs and lows, the reality is that many breakouts fail, and they often fail fast. The Turtle Soup strategy is designed to take advantage of these failed moves by fading the breakout, trading in the opposite direction of those who have become “trapped”.
Originally popularized by Linda Raschke in her book Street Smarts, the name was a tongue-in-cheek remark suggesting that trend followers using the Turtle system would become “soup” when their breakouts failed. Today, this approach is a staple of Smart Money Concepts (SMC) and ICT trading, focusing on pure price action at key levels.
🎥 [Watch the full video]
📄 [Download the PDF Guide]
🛡️ [Most Trusted Prop Firm]
The Core Logic: Internal vs. External Liquidity
The foundation of the Turtle Soup strategy is the understanding that price moves between internal liquidity (lower timeframe) and external liquidity (higher timeframe).
• External Liquidity: Significant turning points on the Daily, Weekly, or 4-hour charts where large institutional orders are likely sitting.
• Internal Liquidity: Support and resistance levels on lower timeframes, often found within an accumulation phase or “chop zone”.
• Smart vs. Dumb Money: The accumulation area is often referred to as “dumb money” territory, where retail traders get “chopped up”. “Smart money” waits for price to sweep the liquidity (buy or sell stops) sitting just outside this zone before reversing the move.
How to Spot Turtle Soup Footprints
The strategy relies on simple price action to identify when a breakout is failing. The primary “footprint” to look for is a long-wicked candle, such as a bullish hammer or a bearish pin bar (inverted hammer).
A powerful Turtle Soup setup occurs when price pushes through a level of liquidity, triggers the breakout traders’ stop orders, and is immediately met by a barrage of institutional counter-orders, causing price to snap back and close within the original range.
Step-by-Step Strategy Rules
Step 1: Establish External Liquidity
Identify the major turning points on a higher timeframe (Weekly, Daily, or 4-hour). These levels represent your ultimate targets for high risk-to-reward trades.
Step 2: Identify the Accumulation Zone
Drop down to a lower timeframe (like the 1-hour) and mark the internal liquidity levels (the highs and lows of the recent consolidation). This is the “dumb money” zone where breakout traders place their buy and sell stops.
Step 3: The Entry (The Fakeout)
Wait for price to break out of the internal liquidity zone with a long-wicked pin bar.
• For a Sell: Price breaks above the high, sweeps buy stops, but closes back below the level.
• For a Buy: Price breaks below the low, sweeps sell stops, but closes back above the level.
• Entry: Enter at the close of the pin bar or the break of its nose.
Step 4: Stops and Targets
• Stop Loss: Place the stop above the wick for a sell or below the wick for a buy.
• Profit Target 1: The opposing side of the internal liquidity zone.
• Profit Target 2 (High R:R): The external liquidity level identified on the higher timeframe.
Adding Confluence
While the strategy is effective using pure price action, many traders use additional filters for added confidence:
• Fair Value Gaps (FVG): Look for price to sweep liquidity and then move back into a prior FVG to confirm the reversal.
• Indicators: Standard oscillators like RSI (overbought/oversold), MACD, or ADX can provide extra confirmation of a mean reversal.
Andrew’s Final Tips for Prop Traders
• Pick a Side: Do not try to be both a Turtle trader and a Turtle Soup trader on the same chart at the same time. You will likely “tie yourself in knots” and create your own version of dumb money.
• Wick Size Matters: The best setups tend to have larger wicks, showing a more powerful rejection of the breakout.
• Risk Management: Always establish your risk in pips and position size accordingly (e.g., 0.5% or 1%) to stay within prop firm limits.
Watch the Turtle Soup Strategy Video
Watch Andrew Lockwood’s full walkthrough of the Turtle Soup trading strategy, where he simplifies the concept of fading failed breakouts for high risk-to-reward trades. In this video, Andrew covers:
• Marking Liquidity: How to identify the “big turning points” on higher timeframes (external liquidity) and consolidation zones on lower timeframes (internal liquidity).
• Smart vs. Dumb Money: How to avoid getting “chopped up” in the accumulation phase and instead join institutional players during a fakeout.
• The Reversal Footprint: Identifying the specific long-wicked pin bars that signal a powerful rejection of a breakout.
• Step-by-Step Rules: Clear instructions on entry points, stop placement, and targeting the opposing side of the range.
Download the Turtle Soup Strategy PDF Guide
Keep the core rules and chart examples of this strategy at your fingertips with the Turtle Soup Strategy PDF. This guide is designed for educational use and offers a printable checklist format to help you maintain discipline and consistency in a simulated trading environment.
The PDF includes:
• The 4-Step Setup: A quick-reference guide to establishing liquidity, identifying the fakeout, and managing the trade.
• Confluence Checklists: Tips on combining the strategy with Fair Value Gaps (FVG) or oscillators for added confidence.
• Risk Management Protocols: Andrew’s guidelines on establishing risk in pips and sizing positions to stay within prop firm limits.
Ready to put these insights into practice?
A disciplined strategy requires an evaluation built to reward consistency. At Funded Trading Plus, we offer simulated programs designed to suit every style of trader. You can explore our streamlined one step challenge for complete trading autonomy, opt for our traditional two step evaluation if you prefer a structured, phased approach, or discover our instant funding program with no profit targets to begin trading a simulated funded account immediately. Choose the path that best fits your goals and test your edge in our simulated trading environment today.
Important Educational Disclaimer
All content is for educational purposes only and is not financial advice. All programs at Funded Trading Plus operate in a simulated environment using virtual funds; payouts are calculated from simulated profits in accordance with program terms. Past performance does not guarantee future results.