Way of the turtle

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Way of the Turtle

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ual traders. It may require $200,000 to diversify a long-term trend-
following system adequately. Trading four or five different systems
may require as much as $1 million or more. This factor alone may
cause many people to decide to place their money with a good pro-
fessional trader who runs a commodity pool or hedge fund rather
than trade for their own accounts privately.
Facing Reality
A robust trading program is built on the premise that you cannot
predict the specific market conditions you will encounter in your
actual trading. Robust trading accounts for this by building systems
that are robust because they are adaptable or simple and are not
specifically dependent on market conditions. A mature robust trad-
ing program trades many different systems in many different mar-
kets and is much more likely to perform consistently in the future
than is a program that trades a small number of systems that have
been highly tailored to a small number of markets. 
Bulletproof Systems
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fourteen
MASTERING YOUR
DEMONS
The market does not care how you feel. It will not prop up your ego or
console you when you are down. Therefore, trading is not for everyone.
If you are unwilling to face the truth about the markets and the truth
about your own limitations, fears, and failures, you will not succeed. 
I
hope that some of you may be as inspired by the Turtle story as
I was when I first read about the great speculator Jesse Livermore
in Edwin Lefèvre’s Reminiscences of a Stock Operator in 1982. The
fact that Richard Dennis was able to teach a group of traders in two
weeks and then have them go on to earn more than $100 million
for him over the next four years has become one of trading’s most
compelling stories. The success of the Turtle experiment has
proven that Richard had a set of teachable principles that if fol-
lowed consistently would result in profitable trading.
The funny thing is that most of the principles that Richard 
Dennis taught us were not new. Some were basic principles that
had been espoused by other famous traders since before Richard
was born. Yet the very simplicity of the principles we were taught
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in some respects was a hindrance for those of us who tried to fol-
low them in those initial months.
People have a tendency to believe that complicated ideas are bet-
ter than simple ones. Many find it hard to comprehend that
Richard Dennis could have made several hundred million dollars
by using a handful of simple rules. It is natural to think that he must
have had some secret. Many of the Turtles fought that demon dur-
ing our first few months of trading. Some of us thought that trad-
ing successfully couldn’t possibly be that simple; that there must
be something else to it. This type of thinking obstructed some of
the Turtles’ trading so much that they never were able to follow the
straightforward rules Richard had outlined.
My theory is that this belief and the need for complication come
from insecurity and the resulting need to find some reason to feel spe-
cial in some way. Having secret knowledge makes us feel special; pos-
sessing simple truths does not. Therefore, our egos drive us to believe
that we possess some kind of special knowledge to prove to ourselves
that we are somehow superior to others. Our egos don’t want us to
limit ourselves to commonly known truths. The ego wants secrets.