Can the skills of a successful trader be reduced to a set of rules?
“We are going to grow traders just like they grow turtles in Singapore.”
–Richard Dennis in Market Wizards
The Turtle Experiment
The story, which first appears in Jack Schwager’s Market Wizards, by now has attained almost legendary status. The year was 1984 and Richard Dennis, a hugely successful commodities trader, was in a long-running philosophical argument with his partner William Eckhardt. The debate? Could the skills of a successful trader be reduced to a set of rules–Dennis’s view–or was trading skill an unlearnable intuitive gift?
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“Let’s hire and train some people and see what happens.”
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After running an ad in a Chicago newspaper they screened 1000+ applicants, interviewed 40 and hired 10. After only 2 weeks of training, the new-hires were turned loose with $100,000.00 each.
In 1985 Dennis repeated the process but reduced training to only 1 week.
Out of 23 trainees, 3 washed out. The other 20 went on to average 100% per year.
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If you’re interested in how a trading system similar to the Turtle Rules performs when turned loose on the Philippine Stock Market, see Riding Giants at Very Low Risk.
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E. M. Murray. Managed Equities. Fixed Downside Risk.
Paris E. M. Murray