Can Successful Trading Be Taught?
Why is it that some traders seemingly make consistent money year after year, yet for most it’s a constant struggle or a losing proposition?
Do the winners have an insider ‘secret sauce’ or do they possess some innate ability to read the market?
You may have heard of the famous Turtles Trader experiment between Richard Dennis and William Eckhardt?
Back in the 80’s, Dennis was widely recognized in the trading world as an overwhelming success. He had turned an initial stake of less than $5,000 into more than $100 million. He and his partner, Eckhardt, had frequent discussions about their success. Dennis believed anyone could be taught to trade the futures markets, while Eckhardt countered that Dennis had a special gift that allowed him to profit from trading.The experiment was set up by Dennis to finally settle this debate. Dennis would find a group of people to teach his rules to, and then have them trade with real money. Dennis believed so strongly in his ideas that he would actually give the traders his own money to trade. The training would last for two weeks and could be repeated over and over. He called his students “turtles” after recalling turtle farms he had visited in Singapore and deciding that he could grow traders as quickly and efficiently as farm-grown turtles.
The two classes of turtles Dennis trained earned more than $175 million in only five years. Dennis had proved beyond a doubt that beginners can learn to trade successfully.
One could argue that the Turtles were given the secret sauce?
Let’s turn the clock forward to today. Our son Zach joined the business in Feb 2021. Until that point he had no interest in trading, we’d not discussed trading and nor had he read any trading books (mine included, which is a bit rude).
His first job was to complete the Trading System Mentor Course that would allow him to design, code and test his own strategy. The key difference between this and the Turtles, was that he wasn’t given a specific strategy.
Rather, he was given the knowledge and tools.
He used that knowledge to build a weekly trend following strategy. We then seeded him and he started trading in May 2021.
Here are his results to date.
A return as at February of +11.50%, and for reference, the benchmark Buy & Hold return for the same period was +5.4%.
And yes, it’s early days and no, he hasn’t been exposed to a major bear market. That will come in due course.
The key here is that he acquired the correct knowledge and the understanding of how profits are made. If there is any secret sauce, and there isn’t, then that would be it.
Understanding how profits are made.
So, can trading be taught? Yes, it absolutely can.
I look forward to keeping you up to date with his progress over the coming years.