The Ultimate Guide to Trend Trading. By Steve Burns. Related Post. Trend Following Trend Trading. Sep 13, Steve Burns. Jun 30, Steve Burns. Market Wizards Trend Following. Oct 29, Steve Burns. Further Reading. Bitcoin Cryptocurrency net worth Wealth. Your Money. Personal Finance. Your Practice. Popular Courses. Trading Strategies Swing Trading. Swing Trading Guide to Swing Trading. Table of Contents Expand. The Turtle Experiment. Finding the Turtles.
The Rules. Did It Work? The Bottom Line. Key Takeaways The Turtle Trading experiment was seen as a tremendous success. Market conditions are always changing, and some question whether this style of trading could survive in today's markets. Turtle Trading is based on purchasing a stock or contract during a breakout and quickly selling on a retracement or price fall.
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Information contained herein is not designed to be used as an invitation for investment with any adviser profiled. The vast majority is wrong even more of the time. After graduating from DePaul University he received a fellowship to Tulane University graduate school, but promptly dropped out and returned to Chicago within days to start trading full time. Dennis bought a seat on the MidAmerican Commodity Exchange with money borrowed from his parents part of it from a life insurance policy in his name.
He still needed cash to trade, however. This was not a family of market operators. The urge to speculate kind of skipped a generation. What do I mean by that? Well, my father, for in- stance, worked for the city of Chicago for 30 years, and he once had a job shoveling coal.
To him, that means another eight hours shoveling coal. A rebel at heart, Dennis cultivated being a character from the outset. He was fond of saying that he never liked the idea of sharing a birthday with Richard Nixon—a gentle stab at all those conservative traders surrounding him in the pits on LaSalle Street. He was an anti-establishment guy making a fortune leveraging the establishment, while wearing jeans.
Society was splintered during the time Dennis earned his first big money. Nineteen seventy-four was a difficult year in which to focus. What with G. Gordon Liddy having been found guilty of Watergate charges and the Symbionese Liberation Army kidnapping Patricia Hearst, it was a wild time of constant turmoil. By the end of the year, at age twenty-five, he was a millionaire. When he showed up late one day to the soybean pit explaining that his beat-up Chevy had broken down, other traders gave him flack, knowing full well he could afford a new car hundreds of times over.
Not only was his persona different, his trading was different. Dennis read Psychology Today no government economic or crop reports for him to keep his emotions in check and to remind him of how overrated intuition was in trading. He took delight in boasting, in contrast to most traders who got up early to read all they could from weather reports to daily Department of Agriculture assessments, that he stayed in bed until the last minute before getting to the exchange just as trading started.
At one point during this time, Dennis was in the middle of an interview with a reporter as he went to the bank to make a deposit. Depositing an amount like that in the mids was not normal. Dennis always got hassled when he tried to deposit checks that size. He was oblivious to the fact that that the teller was looking at a check that likely would exceed her total career earnings.
This was not standard operating procedure in a tight-lipped world where the big Chicago traders typically kept silent. My institutional values were very strong, if somewhat confused. I would describe my early value system as nourishing, if limited.
How much of my holy trinity informs me as an adult? In the White Sox I have a deep and abiding faith. In the Democratic Party I have shallow and fading faith, which is almost never rewarded. In the church, well…I fear 16 years of Catholic education left me a skeptic. Look at that New York Times photo of the then twenty-six- year-old multimillionaire, lounging on the couch with his dad seated to his left, seemingly oblivious to the photographer, and it is easy to see anti-establishment staring into the camera.
Not many twenty-six-year-olds would have been mature enough to handle the press using such folksy wisdom. Yet Dennis never let the swirl around him interfere with what he was doing to make money. Quite simply, his trading technique was to trade seasonal spreads. In other words, he wanted to take advantage of seasonal patterns in markets like soybeans—his initial specialty. I just knew that I was getting a quarter cent edge, and at the end of the day, the edges would approximately equal my profit.
I tried to be like the house in the casino. People at the Board of Trade had been doing it forever. But for the MidAm, it was kind of revolutionary because no one would understand that you could balance your risk with a lot of volume. Dennis went from zero to sixty on the MidAm in record time, and no one knew how he learned to do what he was doing.
He knew that traders had a tendency to self-destruct. However, trading was harder than Dennis let on. The early ups and downs took a toll on him, but he learned the hard lessons within months. I took too big risks. I panicked and sold at the bottom of every break. It took me about three days to work through that experience emotionally, and I think it was the best thing that ever happened to me. They would go on to work together for years as close friends and business associates, with Dennis as their leader.
The star did not wear a polished Armani suit, nor did his buddies. They sported used-car-salesman jackets, with muttonchops and bad hair, but their appearance disguised calculated gamers looking to beat the pants off their peers every day of the week.
Willis, like Dennis, was brought up in a working-class family. Without a second thought, Willis hopped in his Jeep and drove to the Fisher Building in the Chicago Loop to check out the exchange. I knew him by the photo from the Tribune. Nearly everybody else was sixty-five to eighty years old, and they actually had chairs and spittoons in the trading pit. A young Dennis, towering above a sea of old guys lounging on chairs, must have been a sight.
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