1983–1988 · Futures · Trend followers
Richard Dennis and the Turtle Traders Experiment
Proof that trading can be taught: a complete, mechanical breakout system with strict position sizing.
Who they were
Richard Dennis turned a small sum into a fortune trading commodity futures in Chicago in the 1970s. His partner William Eckhardt believed that successful trading was an innate talent; Dennis believed it could be taught. In 1983 they settled the bet with an experiment.
They placed newspaper ads, chose a group of trainees with no particular background, taught them a complete system in two weeks and gave them real accounts. Dennis called them "Turtles" after turtle farms he had visited in Singapore. Several of them produced strong returns over the following years.
Principles and rules
1. A complete system
Every decision was defined in advance: which markets, position size, entries, stops, adds and exits. Nothing was left to opinion.
2. Volatility-based sizing
Positions were sized by N, the 20-day average true range, so that every unit risked about 1% of the account regardless of the market.
3. Breakouts
Entries on 20-day and 55-day highs and lows. No forecasts and no news.
4. Let profits run
Exits on opposite 10-day or 20-day breakouts, never at fixed targets. A few big trends paid for many small losses.
5. Discipline over intelligence
All Turtles had the same rules; their results differed mainly by how faithfully they followed them through losing streaks.
Key lessons
- A written, testable system beats discretion for most people.
- Position size is as important as the entry.
- Low win rates are normal in trend following: expect 30–40%.
- The hardest part is taking the next signal after several losses.
Strategies from this method
How to practise it
The Turtle Trading strategy page has the full rules. In Candlemind, practise taking every breakout with the same risk and log the result in R, so you feel how a 35% win rate can still be profitable.
Frequently asked questions
Did the Turtle experiment work?
Several of the trainees made substantial profits in the following years, which is generally taken as evidence that a rule-based approach can be taught.
Who was William Eckhardt?
Dennis's partner, a mathematician and trader who co-designed and taught the system, and who bet that trading could not be taught.
Summaries and paraphrases of public books and interviews, for education. Not investment advice.