Richard Dennis is the man behind the famous Turtle Trading experiment, which inferred that anyone, even without any kind of financial background, can be taught to trade well.
Dennis was born in Chicago on 1949. He is known for being a commodities speculator, earning the nickname “Prince of the Pit.”
In 1970, he borrowed $1,600 and reportedly turned it into $200 million in a span of ten years.
His entry into the financial world began when he was an order runner on the trading floor of the Chicago Mercantile Exchange. Later on, he opened his own trading account at the MidAmerica Commodity Exchange where only mini contracts could be traded.
He graduated from DePaul University with a degree in philosophy. He was accepted for a graduate study scholarship in Tulane University but turned it down to focus on trading.
Most of his early profits came from trading soybeans in 1974, buying into trending inflationary markets back then. The 1970s were marked by repeated crop failures and set the stage for continued price gains on dwindling supply.
Dennis started the Turtle Trading experiment to settle a bet with fellow trader William Eckhardt. They recruited 21 men and women, training them with a simple trend-following system and a range of commodities, currencies, and bonds for two weeks. After this training period ended, Dennis gave each of the turtles an account to practice what they were taught.
Five years later, the turtles had made an aggregate profit of $175 million. A number of the turtles such as Jerry Parker, Liz Cheval, and Paul Rabar went on to pursue trading careers.
Dennis also managed capital for others for a while but suffered heavy losses during the market crash in 1987. In 1990, his firm settled investor complaints for his failure to follow his own trading rules. He also managed funds in the late 90s but closed operations in 2000.
In the Turtle Trading experiment, the turtles were taught to follow a simple set of rules in executing the trading strategy. This included buying into new highs as a way of getting into an uptrend, not risking more than 2% of an account in a single trade, and using the average true range to calculate volatility.
He was also known as “Dennis the Gambler” but this title offended him since he never considered himself as a gambler in the Las Vegas sense. However, he was also very talented in poker.
In 1988, following a large drawdown in his managed and personal accounts, Dennis decided to retire and focus on political causes. He came back to the trading world in 1994 to found the Dennis Trading Group with his brother but retired again in 2000.
The Turtle Trading experiment was considered a huge success, as it did prove that it was possible to train people to trade profitably even if they had no background in finance or economics.
Dennis is included among the traders in Market Wizards. In it he stresses the importance of being emotionally detached from positions, particularly losing ones. “It is a little bit like playing golf: You can throw your clubs around after making a bad shot, but while you are making the next shot you should keep your head down and your eye on the ball.”
Source:: Richard Dennis – Trader Fact File