“Master of the Markets: The Success Secret of the Commodity Speculator”
“The Birth of the Turtle Traders: Richard Dennis and the Success Secret of the Commodity Speculator”
In the early 1980s, Richard Dennis pondered the question: Is a successful trader destined to be one from birth, or can the necessary skills be learned? Stemming from this contemplation, he, along with his longtime friend William Eckhardt, initiated the “Turtle Traders” experiment in 1983. In a short period, inexperienced individuals were introduced to the world of trading and subsequently provided with a real trading account boasting an impressive $1,000,000 USD. Under Dennis’s guidance, participants traded remarkably successfully in various futures contracts on stocks, currencies, and commodities, always following the trading rules he had established.
“Successful Financial Pioneer: The Story of Richard Dennis”
Richard Dennis was an American financial speculator and successful hedge fund manager who gained fame in the 1970s and 1980s. He was born on January 16, 1949, and passed away on November 17, 2019.
One of the most notable aspects of his life was the “Turtle Trader” experiment, which he conducted in the early 1980s with his friend William Eckhardt. The experiment aimed to investigate whether successful traders are created through innate abilities or through training and clear trading rules. Dennis recruited a group of inexperienced individuals, known as the “Turtle Traders,” instructed them in his trading philosophy, and then provided them with capital to trade in financial markets.
The Turtle Traders achieved impressive successes, contributing to Dennis’s reputation as an outstanding commodity speculator. His trading strategies emphasized risk management and clear rules, forming the foundation for the success of the Turtle Traders.
Dennis was a pioneer in systematic trading and influenced the development of trading strategies, especially in the futures and commodities markets. His legacy lies in demonstrating that successful trading methods can be learned and do not necessarily have to rely solely on innate talents.
Richard Dennis and the Turtle Trading Experiment: Redefining Trading
The origins of the Turtle Trading experiment stemmed from a disagreement between Richard Dennis and William Eckhardt. Dennis believed that trading skills could be learned, while Eckhardt thought they had to be innate. This difference led to a bet that laid the foundation for a unique experiment. Through job advertisements in prestigious financial publications such as Barron’s, the Wall Street Journal, and the New York Times, Dennis and Eckhardt recruited over 1000 applicants, of which only 80 made it to the shortlist.
Ultimately, 13 candidates were selected, receiving a two-week introduction to the Turtle method. Afterward, participants were given small sums of money for about a month to apply what they had learned. Following this trial period, each participant received a trading account of around $1,000,000, funded from Dennis’s own wealth.
The naming of “Turtles” traces back to Dennis’s visit to a turtle farm in Singapore. The idea was to “breed” traders just like turtles. The Turtles were trained to be trend followers, relying on two fundamental principles of technical analysis: firstly, stock prices move in trends, and secondly, all relevant information is already priced into the market. The Turtles focused solely on price changes and ignored news.
The result of the experiment was impressive. Over a four-year period, the 13-member team averaged a profit of around 80% per year, totaling more than $100 million. The Turtles were allowed to keep 15% of the profit, while Richard Dennis received the remaining 85% share. This experiment vividly demonstrated that trading is learnable, even for individuals with little or no stock market knowledge. The key to success was the clear set of rules and strict adherence to the established framework.
