Richard Dennis: trading coach of turtles
2/14/2017
Richard Dennis is well-known as the most successful of the breed of Chicago's commodity traders. He began trading at a very early age under the name of his father (because underage citizens were not allowed to participate in trading activities at that time) and made huge profits very soon from his modest $400 capital. In 1970, he increased it to $3,000, then, in 1973 turned this sum into $100, 000. By the age of 25, he became a millionaire trading soybeans and other commodity units.
The most famous experiment in trading history
Richard Dennis has always believed that successful trading is not a natural ability, but something that can be taught to anyone. His faithful friend Bill Eckhardt once questioned this assurance saying that only very talented people can become successful in trading. For Eckhardt, genetics and aptitude were the determining factors. The virtuous millionaire Dennis decided to prove to his long-time friend that any wily street fella without any natural predisposition to trading or some particular wit could be taught to trade successfully. He held a social experiment setting up a group of duffers who knew nothing about investing and trading. Mr. Dennis called his trainees the “Turtles” (he had just returned from Singapore and was impressed by how Singaporeans were growing turtles).
In a matter of time, sponsored and mentored by the prince of the pit these luckies (Dennis’s turtles) did earn whaling sums of money and made ample amend for Dennis’s kindness. Thereby, Richard Dennis proved that trading could be taught and that any person with little or no trading experience can become excellent traders with a simple set of rules.
Eckhardt-Dennis social experiment was immortalized in the film “Trading places”, starring Dan Aykroyd and Eddie Murphy.
Trading tips from Dennis
Exit the market at the first signs of the destabilization thereby protecting yourself from greater losses.
The loss of even a small share of the capital is always destructive to the trader’s ability to analyze the market’s situation. So, never engage in a new trade after you suffered some losses.
You should always analyze your market activities (even if you earned money on the bet).
The traders start making mistakes when they discard the randomness of the market’s movements; technical analysis is as important as fundamental one.
Trading novices shouldn’t rush into risky trades struggling to make a lot of money from their first trades. It is better to gain some experience before trading with a great sum of money.
Try different trading techniques, look for new trading opportunities; don’t follow the constant trading pattern.
When you are on a losing streak (when your losses are so big that you get depressed), it is better to start doing business and stop trading for a while.
Richard Dennis was dubbed the king of futures. This financial instrument was a goldmine for him. In the mid-eighties, many stock traders were following all Dennis’s trades closely. It was believed that if Richard Denis set his heart on a particular asset, it will soar in the future. But we must admit that the legendary trader was not always on a roll. In 1987, Mr. Dennis for some strange reasons decided not to follow his usual trading rules, got himself involved in a number of high-risk trades and lost millions of dollars entrusted to him by other investors. After this failure, he got depressed and vowed not to trade his or other people's money. In 1994 he returned to the commodity market and made huge profits once again. He became a real hero in the trading world. For unknown reasons, he always tried to shrug off the status of trading guru granted to him by many generations of traders. Instead, he called himself a random cold-blooded mechanical trader with the great experience under the belt.
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