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Trader Profile · The Market Wizards

The Turtles

The 1983 experiment · Richard Dennis (b. 1949) & William Eckhardt — "can trading be taught?"

To settle a bet — is great trading born or made? — Richard Dennis trained two groups of novices in a simple rules-based system. The 'Turtles' went on to make hundreds of millions, proving discipline can be taught.

Trend followingRules-basedThe Turtle experimentDiscipline
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Dennis & Eckhardt · 1983 experiment

1 The Story

Could trading be taught?

Richard Dennis (born 1949), the 'Prince of the Pit,' famously turned a borrowed ~$1,600 into a reported several hundred million dollars trading commodities. His partner, the mathematician William Eckhardt, doubted that trading could be taught — Dennis was sure it could.1

To settle the argument, in 1983 they recruited and trained two groups of novices — the 'Turtles' — in a simple, rules-based breakout system. Many went on to lucrative careers, making the experiment one of trading's most famous demonstrations: that disciplined, rules-based trading is a learnable skill, not an innate gift.12

2 The Big Idea

Trading can be taught — if it's rules, followed with discipline

The edge was in the system and the discipline to follow it, not in talent.

The Turtles traded a mechanical trend-following system: channel breakouts for entries, strict volatility-based position sizing, fast loss-cutting, and adding to winners. Their results proved the edge lived in the rules — and in the rare discipline to follow them through losing streaks.1

3 The Method

The Turtle system

Channel breakouts

Enter on new N-day highs (or lows) — go with the trend, Donchian-style.

Volatility-based sizing

Size every position by the market's volatility so risk per trade stays constant and survivable.

Cut losers, pyramid winners

Exit losing trades fast; add to winners as the trend extends.

Follow the rules

The whole point: mechanical discipline beats discretion and emotion.

The Turtles' system: rules-based channel breakoutsN-day high (breakout level)buy the breakout — and follow the rulesmechanical entries, strict sizing, cut losers, ride winners
The Turtles bought breakouts to new N-day highs and rode the trend with strict sizing and stops — a fully mechanical system anyone could be taught.1

4 Try It Today

Test the idea for yourself

A no-risk exercise

Take any trend-following rule (say, buy a 20-day high, exit a 10-day low) and apply it mechanically across a dozen past charts — no opinions, no overrides. Notice how hard it is to follow rules through the losers. That difficulty, the Turtles showed, is the real edge.

5 In Their Words

The Turtles, quoted

"I always say you could publish my trading rules in the newspaper and no one would follow them. The key is consistency and discipline."
— Richard Dennis, in Market Wizards (Jack Schwager)1

6 Watch & Read

Go deeper

▶ Curated video embeds here
(YouTube embed, credited)

§ Sources

  1. "Richard Dennis," Wikipedia — en.wikipedia.org/wiki/Richard_Dennis
  2. "William Eckhardt (trader)," Wikipedia — en.wikipedia.org/wiki/William_Eckhardt_(trader)