Turtle soup in gold trading

Turtle soup is a reversal setup named as a play on the Turtle traders, who bought 20-day breakouts. Popularized by Linda Raschke and Laurence Connors, it fades breakouts that fail: when price makes a new 20-period high or low and then reverses back inside, the trader takes the opposite side. ICT adopted the term for any quick sweep of a high or low followed by a reversal.

How it applies to gold trading

Gold frequently runs above an obvious high, triggering buy stops and breakout entries, then reverses sharply. A turtle soup trader waits for that run and the failure to hold, then sells with a stop above the sweep’s high, targeting the opposite side of the range. In SMC terms, it is a liquidity sweep followed by a reversal.

Confirmation matters, because on trend days the breakout is real. Many traders require a close back inside the range or a lower-timeframe break of structure before entering.

Worked example

Example (hypothetical numbers): gold’s 20-day high is 4,060. It trades to 4,066 in the New York session, then closes the hour at 4,054, back inside. A trader sells at 4,053 with a stop at 4,069 ($16) and targets 4,010, near the middle of the 20-day range, for about 2.7R.

A common mistake

Fading every new high. Turtle soup requires a failure; strong breakouts that hold should be left alone.

See also: Liquidity sweep, Fakeout, Donchian channels, Swing failure pattern.

Frequently asked questions