Trading System-Why You Should Follow a Solid, Successful One

Well, I’ve been at it again. Over the weekend I was head first into yet another fascinating trading book. I’ve set myself a goal this year to read at least five trading books based around trading psychology or successful traders. You might recall in a previous post I discussed theories and strategies expressed in Mark Douglas excellent book ‘Trading in the Zone’. If you haven’t heard of this book you must have been living under a rock and if you haven’t gone out and grabbed a copy do so by getting onto our website by clicking on the link above. At Wealth Within we constantly get asked by new traders for a good book on trading psychology and every time I recommend Trading In the Zone as it is a great insight into trading psychology and what is takes to put together a profitable trading system.

The next book I’m just about to tick off my list (I’m about 80% through it), is another must have for your trading collection called ‘The Complete Turtle Trader: How 23 Novice Investors Became Overnight Millionaries’ by author Michael Covel.

New to trading? Not sure where to start? Check out the Your Trading Mentor video lessons

The Turtle Traders and Their Trading System

For those of you who may not know ‘Turtle Traders’ was the name given to a bunch of everyday people who, in the mid to late 1980’s were trained by famous and very wealthy commodities trader Richard Dennis to trade the market using his money and with his trading system.

The Turtle Trader experiment came about when Richard Dennis and business partner William Eckhardt disagreed about the origins of what it takes to be a great trader. Dennis argued that anyone with half a brain and using the right trading system could become a great trader whilst Eckhardt believed that great traders were born – not made.

The two decided to settle the argument by placing an ad in the Wall Street journal that asked for people to be interviewed by them for the job of a lifetime. Surprisingly, not that many people replied but nevertheless Dennis and Eckhardt established a team of ragtag people – from an MBA graduate to an ex-drug dealer. All had little, if any experience in trading.

Profitable Trading System in Action…

The period of actual training ran for only two weeks where the ‘Turtles’ as they became known were taught Dennis and Eckhardt’s profitable trading system. This trading system consisted of two proprietary trend following strategies that both Dennis and Eckhardt used to trade for themselves and make millions in the process.

After training concluded, all Turtles were given a sum of Dennis’ own money (reportedly between $500k and $1 million) and were assigned to use the trading system they had learned to trade various markets.

image of richard dennis trading system made everyday people very wealthy

Richard Dennis believed anyone could learn to trade profitably…

The results were astounding between the beginning of the Turtle program in 1984 and its conclusion in 1988, the Turtles amassed a combined fortune for Dennis in the order of $110 million using only the trading system thy had been taught. The turtles were paid handsomely for their efforts. Some becoming millonaires during the 4 year period the experiment ran.

Conclusion: Can Anyone Learn to Trade Profitably?

The conclusion was of course that anyone can learn how to trade as long as they are given the right tools for the job (namely, shown a profitable trading system that works time and time again).

However what the book highlights is an even more important point. If you use a profitable trading system and follow the rules, over the long term you can become a very, very successful trader and crucially, once you prove that your trading system works your trading psychology becomes altered to the degree that you 100% believe you’re a trader.

Remember that most of the people in the trading program were just everyday people. Many were not exceptional academically, and most had no concept of trading.

Following a Proven Trading System Works…

Yet by simply following a solid, profitable and proven trading system (Dennis was worth around $200 million after all) their lives were transformed.

Many of the Turtles went on to become very famous traders themselves, setting up hedge funds and the like.

What this proves is that with hardwork, patience, dedication and belief that you are a ‘trader’ anyone can make an enormous amount of money from the markets. What let’s most down however is poor risk and money management and constant deviation or complete lack of a trading plan or profitable trading system.

Want to develop a great trading system of your own? Check out our Your Trading Mentor 10 lesson course. 

If you have any questions feel free to email info@wealthwithin.com.au or write your question in the comment box below and we’ll get back to you within 2 business days.

  • http://www.marketindex.com.au MarketIndex.com.au (Admin)

    Hi Blake – If your readers are interested in the Turtle Trading Rules, I have uploaded the document here: Turtle Trading Rules (PDF).

    It’s a simple read, easy to understand and even if you don’t follow their methodology, there are a few nuggets of information.

    • Blake Sterling

      Thanks for this…