The Turtle Experiment, Part 3

I have no doubt whatsoever that one of the first things that comes to mind when people read about the Turtle experiment is the question “Was it successful?”

Richard Dennis taught two classes of “turtles” in person and those individuals went on to earn a profit of over $175 million over the course of five years. So the answer to the above-mentioned question is a resounding “Yes, it was successful”. Richard Dennis’ experiment proved that anyone could learn to trade regardless of who they were before that, as long as they had a good strategy, stuck to that strategy with the necessary discipline and they were willing to learn and grow as traders.

The Turtle Experiment, Part 2

Now that we know the background of the Turtle Experiment, conducted by Richard Dennis, we can delve in the details of the actual trading.

Dennis gathered his first fourteen “turtles” after placing an ad in a popular newspaper and began teaching them his rules – he taught his students a trend-following approach. The idea was that one should buy when there is a breakout above a range and sell when there is a breakout below a range.

The exact rules of Dennis’ strategy have remained a secret for a long time, but for the past decade or so some details have come to light:
-One should check prices for themselves rather than rely on the TV or newspapers for information (the experiment was conducted in 1983).
-One should be flexible when they set parameters for their buy and sell signals.
-One should plan their exit in the same detail as they plan their entry.
-Larger positions should be opened in less volatile markets and smaller positions should be opened in more volatile markets.
-One should not risk more than 2% of their account on a single trade.

The Turtle Experiment, Part 1

After writing about Richard Dennis I decided that the Turtle experiment – an experiment conducted by this famous trader – is much too interesting not to elaborate on it further. So in the next few posts I will give an overview of said experiment.

Let’s start from the beginning.

Richard Dennis decided to conduct the Turtle experiment following a bet with a fellow trader, who argued that Dennis was so wildly successful in his trading because he possessed a special gift, while Dennis himself believed that anyone could learn to trade successfully. In order to prove his point Dennis devised and conducted the Turtle experiment.

Dennis would gather a group of people and teach them his rules of trading and then they would trade with real money. Since Dennis had such an immense trust in his trading ideas he was ready to give his students his own money to trade with. He would train them for two weeks and once those two weeks were up he could begin training another group of people.

Dennis named his students “turtles” after the turtle farms he had seen in Singapore, where farmers grew turtles in an incredibly quick and efficient manner, figuring that he could train his students just as quickly and efficiently.

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The Forex Calendar For This Week

This market week is full of events that could have a major effect on the charts and it is recommendable for traders to be aware of them as they make their trading decisions:

On Monday we can expect the BoJ Governor Haruhiko Kuroda to speak about about monetary policy.

On Tuesday will be announced the CPI y/y, the ECB President Mario Draghi, BoE Governor Mark Carney, the Fed Chair Janet Yellen and the BoJ Governor Haruhiko Kuroda will be making speeches. Later that day will also be announced the PPI m/m.

On Wednesday will be announced the British Average Earnings Index 3m/y and the US CPI m/m, Core CPI m/m, Core Retail Sales m/m, Retail Sales m/m and the Crude Oil Inventories.

On Thursday we can expect the British Retail Sales m/m data, the US Unemployment Claims and the BoE Governor Mark Carney will be making a speech.

And finally, on Friday, the ECB President Mario Draghi will speak publically and then the US will announce the Building Permits data.

How Will EUR/USD Develop?

EUR/USD could not reach 38.2% Fibo of the correction to the downside but the bulls hurriedly started buying the EUR. Under these circumstances it’s logical to ask ourselves how high the European currency will rise. In my opinion, the first target to the upside will be around the resistance trend line of the move to the downside from 1.20924 (8^th September 2017) to 1.15529 (7^th November 2017).

In case the rally continues above that resistance we could expect a move north to 1.1800 - 1.1850.

In case, however, that the pair renews its move south from the resistance trend line, it could fall to 1.1480 – 1.1390.

Whether this is the entire correction of the impulse to the upside consisting of five waves is difficult to say as we should wait and see how the pair will develop in order to make further prognosis.

Great Traders: Fascinating Facts About Richard Dennis

Richard J. Dennis is a legendary commodies trader who began trading at 17 years old and over time acquired the nickname “The Prince of the Pit”. Who was this fascinating man and how did he end up acquiring such a moniker? Here are some facts about his life that can answer those questions:

-Dennis was born in Chicago in January 1949. He became an order runner in the Chicago Mercantile Exchange when he was just 17 years old and a few years later he began trading for his own account at the MidAmerica Commodity Exchange, an entry-level floor where "mini" contracts were traded. Since there was a rule that traders had to be at least 21 years old he was his own runner and hired his own father to trade in his place in the pit.

-Although Dennis earned a bachelor’s degree in philosophy and he had accepted a scholarship for a graduate study in the same discipline he decided to continue trading and borrowed $1,600 from his family in order to do that. He spent $1,200 of those for a place at the exchange and that left him with just $400 to use for his actual trading. In about ten years Dennis had turned those $400 into $200,000,000. 

-He conducted the famous Turtle Experiment, proving that anyone could learn how to trade and trade immensely successfully.

Richard Dennis is a hugely successful trader who has certainly left a lasting mark on the trading world.