Series 1 of 2: Can Turtles be Successful Traders Once Again?

Flashback: I’m a novice trader in the early 1990’s and I’m hooked. Like most novice traders, I begin to mentally spend my trading profits through visions of exotic cars, mansions and trips to places I cannot pronounce. Two years into trading for my own account, I lost a lot of money. The amounts those losses totaled will remain unmentioned for fear my wife may read this post one day. But in my defense, it was not my fault. That dubious distinction belonged to two men I had never met. Their guilt was undeniable....in my mind. Those men were Richard Dennis and William Eckhardt. You see, in the 1980’s Dennis and Eckhardt decided to hatch an experiment (more on that in a moment). Let’s start with a brief background of these two co-conspirators.

Richard Dennis in the 1980’s was regarded as one of, if not the best, traders in the world. You can use the Google machine to read all about these guys, but suffice to say, He was a legend. Dennis started out with a $5,000 account balance, and turned it into a $100 Million. Yeah...you read that right. William Eckhardt was a mathematician, and a trader, who like RN Elliott, developed a thesis of using probabilistic outcomes in commodity pits at the Chicago Merc. I imagine Dennis to be the Trader, and Eckhardt to be the rules-process based mathematician. Although Eckhardt did average just under 20% per year, for over 20 years. That type of consistency is as probabilistic as Dennis’ rocket ride to riches. Ok back to the experiment.

Their constant debates regarding their individual trading successes turned into somewhat of a bet/experiment. Dennis believed anyone could be taught to trade for profit successfully, whereas Eckhardt believed that Dennis (in all his success) was unique. That he possessed some sort of superhero DNA for trading. Dennis initially recruited 18 individuals and only spent 2 weeks training them his methods. I’ll let you research all the details of the Turtles but suffice to say in five years they generated an aggregate total of $175 Million in profits.

Now, as reasonable reader here on Trading View, I’m sure you can see why I faulted Dennis and Eckhardt for my initial losses. Clearly, I was sold an outcome that had no probability of success in reality. But in all seriousness, I think about those early days from time to time. I think about the audacity of the experiment, and the success story that followed. How inspired I was back then. However, the truth of the matter is these two gentlemen had as much to do with my losses as I had to do with their turtles' successes. ZERO. Nothing...NADA. Therein lies the first rule of trading I learned. Take personal responsibility for your losses. I only say losses because most novice traders are quick to tell stories of their successful trades. It’s the management of losses that make a good trader, not the wins.

Yes, I do believe average people can be taught to trade successfully over long periods of time. Trading is hard work. I’m sure there are those out there that will comment and say, look at me, I’m knocking out of the park. My response to those individuals is, I’m truly am happy for you. But to minimize trading success to something that is easy is misleading, and potentially harmful to novice traders who may mentally spend their future easy winnings on exotic cars, mansions and travel. Only to find out the hard way, that what Momma said so many years ago is still true today. THERE ARE NO GET RICH QUICK SCHEMES. Richard Dennis ultimately flamed out and quit trading for the public after losing most of his clients investments in the crash of 1987.

So, how can anyone learn to become a successful trader? You need to have the mindset of a Richard Dennis, while simultaneously having the skepticism but academic approach of a William Eckhardt. Part II of this series will be a detailed list of the things that I have learned since my early days being introduced to Dennis and Eckhardt’s teachings and how they have helped me trade for profit.

Best to all,

Chris