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The Story of Richard Dennis and the Turtles

Richard J. Dennis, a commodities speculator once known as the “Prince of the Pit’, was born in Chicago, in January, 1949. In the early 1970s, he borrowed $1,600 and reportedly made $200 million in about ten years

In contrast to the vast majority of floor traders, who quickly scalped trades throughout a trading day, Dennis held positions for longer periods—riding out short-term fluctuations and holding over the intermediate term.

Dennis believed that successful trading could be taught, he made a bet with his friend and fellow trader, William Eckhardt and ran a classified ad in the Wall Street Journal looking for novices to train. Dennis recruited and trained 21 men and 2 women, in two groups, one from December 1983, and the other from December 1984. His recruits had anything but traditional Wall Street background, they included a professional blackjack player, a pianist, and a fantasy game designer.

Dennis trained this group, known as Turtles, for only two weeks about a simple trend-following system, trading a range of commodities, currencies, and bond markets, buying when prices increased above their recent range, and selling when they fell below their recent range. They were taught to cut position size during losing periods and to pyramid aggressively—up to a third or a half of total exposure, although only 24% of total capital would be exposed at any one time. This type of trading system will generate losses in periods when the market is rangebound, often for months at a time, and profits during large market moves.

In January of 1984, after the two-week training period was ended, Dennis gave each of the Turtles a trading account and had them trade the systems they had been taught . During this one-month trading period, they were allowed to trade a maximum of 12 contracts per market. After the trial-period ended, he gave the few of them who had successfully traded the system during the one-month trial, accounts ranging from $250,000 to $2 million of his own money to manage.

When his experiment ended five years later, his Turtles reportedly had earned an aggregate profit of $175 million

Some of the turtles are still trading today and managing respectable funds, eg :
Jerry Parker – the most successful turtle, founded Chesapeake Capital Corporation
Elizabeth Cheval – runs her trading firm EMC Capital

Why were they called Turtles? It was simply a nickname that Dennis had given his students when he said to his class “We are going to grow traders just like they grow turtles in Singapore” (after he had came back from visiting a Singapore turtle farm).