Richard Dennis Commodities Trader

Richard Dennis was already a highly successful commodities trader when he came up with his idea of what soon became known as the “trading turtles”.

Dennis had an office tucked away on the antiquated twenty-third floor of the Chicago Board of Trade building. The outside hallway had dingy brown paneling. Etched in small lettering in his office door was “C&D Commodities, Richard J. Dennis and Company.” It was a very plain rather drab office.

No marble. No glass. No impressive entrance of any sort. Immediately next door was a grimy looking men’s room. The office entrance disguised the performance of an individual who, in his own estimate, made up to $200 million from trading commodities.

According to Dennis, “I don’t think trading strategies are as vulnerable to not working if people know about them, as most traders believe. If what you are doing is right, it will work even if people have a general idea about it. I always say you could publish rules in a newspaper and no one would follow them. The key is consistency and discipline.”

Dennis had a theory about commodities trading that he wanted to test out. Dennis placed small classified ads in newspapers and magazines stating “trader wanted.” He got some 1,000 responses from people eager to learn his methods. He settled on fewer than two dozen novices–among them two professional gamblers and a fantasy-game designer.

I can remember applying to the advertisement and a few weeks later getting a letter which briefly stated that I was considered to be in the final group but was not selected as one of the trainees. Perhaps Dennis though that I would be too hard to teach in his methods as I already had some trading experience. What a disappointment that was although at the time I knew little about Richard Dennis and felt a little uneasy about the prospect of moving to Chicago if I had been selected.

After a two-week training program, he gave his group of trainees real money to trade under his firm’s auspices. Several went on to become top commodity-fund managers, including Jerry Parker of Chesapeake Capital Corp., who now manages more than US$1 billion. “It was sink or swim. Sort of an experiment,” recalls Parker, a former accountant.

Dennis ran the training, Parker says, “because he wanted to have a certain chunk of money traded using systematic rules” while he went on and tried out new techniques.

Unlike most traders Dennis believed that trading could be taught and learned. Most commodity traders belonged to the you’re born with it or you’re not camp. The wild success of Richard Dennis and his Turtle trading experiment gives hope to those who want to learn how to make money, big money, from the commodities business.

Unfortunately, as far as I know, other than Dennis, no else has had so much confidence in their trading methods that they have been willing to turn a relatively green bunch of watanabe traders loose with real money provided by them to see what they could do in the commodities markets.

Let me know if you want to be the second commodity trading teacher to give a turtle experiment a go.

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