Trading & Options · Profile from Trading and Options Research Companion
Turtle Traders
The trading experiment that Chicago futures trader Richard Dennis and his partner William Eckhardt ran from December 1983: two classes of novices — 21 men and two women in most accounts — recruited through newspaper advertisements, taught a mechanical breakout trend-following system in about two weeks and given accounts of Dennis's own money, to settle an argument over whether trading could be taught. Its story turns on rules versus discipline: the rules (20- and 55-day Donchian breakouts, positions sized by the market's average true range "N", 2-N stops, pyramiding to four units) were simple and are now free, but the results varied widely between trainees given the same rules, and Dennis himself — the teacher — lost about half of his two public funds in 1987–88 and stopped managing outside money (Turtle / Donchian Breakout). The performance record is the weakest in this batch of profiles: the often-quoted "$175m" of Turtle profits rests on a former Turtle's statement, Michael Covel's own site says "$100M+", and the best contemporary number is a *1989 Wall Street Journal* tabulation that 14 Turtles trading as CTAs averaged about 80% a year** compounded over roughly four and a half years (as cited by secondary sources — verify). None of these is an audited composite. What is solid is that several Turtles went on to run registered CTAs with public records for decades — Chesapeake Capital above all.
At a glance
- Founded
- Recruited from late 1983 (first class trained Dec 1983, trading from Jan 1984) and late 1984 (second class, trained Dec 1984) (Wikipedia, citing Covel and press — secondary)
- Headquarters
- Chicago — Dennis's firm C&D Commodities, at the Chicago Board of Trade (Wikipedia; from memory for the building, verify)
- Ownership / structure
- Not a firm: a training programme inside Dennis's trading business; trainees traded accounts of Dennis's capital under his rules and shared in profits (terms not public — verify)
- Leadership
- Richard J. Dennis (born Jan 1949, Chicago; "Prince of the Pit") and William Eckhardt (Dennis's partner; studied mathematics "up to the doctoral level"; later Eckhardt Trading Company) (Wikipedia; The Hedge Fund Journal, Oct 2018)
- Programme size
- ~23 trainees in two classes (21 men, 2 women — Wikipedia); "more than 1,000" applicants (section 15, TurtleTrader.com — secondary, verify); allocations after a trial month of $250,000 to $2m each (Wikipedia, reported)
- Systems
- Turtle / Donchian Breakout (System 1: 20-day; System 2: 55-day); N-based sizing as an early form of volatility-targeted trend; the evidence for the underlying edge is in Time-Series Momentum
- Regulators
- CFTC and NFA (Dennis's public funds and the Turtles' later CTAs); the exchanges' rules
- Signature moves (incl. failures)
- The bet and the recruitment (1983); training and the rules (1983–84); trading results, reported and disputed (1984–88); Dennis's 1987–88 losses and the end of the programme (1988); the Turtles go independent (1988–); Dennis's second fund run and its closure (1990s–2000); the rules published and the lore industry (2003–07)
7 strategic moves analysed
Each one gets a full strategy file in the companion: context, the decision, the financing, what happened, and the lesson.
1983
The Bet and the Recruitment
Hiring, spin-out or partner departure (recruiting a class of trainees); founding of a training programme
1984
Trading Results Reported and Disputed
Outcome of a strategy (performance record) — and the evidence problem around it
1984
Training and the Turtle Rules
New strategy, product or market (a written, mechanical trading system taught to novices)
1988
Dennis Losses and End of the Program
Loss, drawdown or blow-up response; closing a fund or strategy; regulatory, enforcement or legal action (1990 settlement)
1988
Turtles Go Independent
Hiring, spin-out or partner departure; founding or fund launch
2000
Dennis Comeback and Second Closure
Founding or fund launch (return to managing money); closing a fund or strategy (failure)
2007
Rules Published Books and Lore
New strategy, product or market (publication of a trading system); restructuring of the story into a commercial product