How Did Richard Dennis Originally Trade?

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MikeL
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How Did Richard Dennis Originally Trade?

Post by MikeL » Fri Sep 10, 2004 11:32 am

Since I could not post this topic under the Turtle System rules, I wasn't sure where to put it. But, here is my question. Thanks to Forum Mgmnt, we have the original Turtle Trading rules/system. However, as I understand those rules, they really work best with large funded accounts. For accounts between $5000 - $10,000, I cannot see how they would work since diversification, money management, unit size, etc. are such large pieces of the system. Small accounts just don't fit into that framework.

Now, it's touted everywhere how Richard Dennis turned $400 into $400,000,000 or something astronomical like that. I don't doubt the veracity of that story. However, I don't think that he began with his initial small account using the Turtle Trading Rules that he later taught to the Turtles. He had great success starting extremely small and amassing a fortune.

Forum Mgmnt, do you, or anyone else, have any clues as to how Richard traded when he was beginning? I am interested in this since I have a small account. Although I like the turtle theory, I cannot see how to properly apply it until my account reaches a certain size.

Mike

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Post by Forum Mgmnt » Fri Sep 10, 2004 11:42 am

Look here:

viewtopic.php?t=238&postdays=0&postorder=asc&start=5

Try to read the other topics and if you still have questions post them at the end of the most relevant topic.

- Forum Mgmnt

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Scalping

Post by AFJ Garner » Fri Sep 10, 2004 1:40 pm

"Scalping" is an interesting topic. The basic idea is to trade as a "local" on the floor or to use the screen since the very low transaction costs involved mean you can trade for a couple of ticks profit. And you try as often as you can to capture the bid offer spread. What is less than clear to me is what the "edge" is. Some say it is the bid offer spread but in a fast moving market this evaporates in less than a nanosecond. Some scalpers I have spoken to may wait patiently throughout a twelve hour day and then perhaps trade once or twice, remaining in the market for a couple of minutes at the most, taking advantage of a rush of short term momentum. Others trade spreads - some say they follow a mean reversion "system" (albeit far from mechanical), some seeem to trade spreads as an outright, follwing short term momentum/trends. What seems consistently absent is the sort of detailed and painstaking backtesting that LTTF followers perform to discover an edge. Trying to talk to most of the scalpers that I have met recently about their edge is a little frustrating. And these guys seem to change their mind from day to day about how they trade and what advice they can give. I am forced to conclude that of those scalpers I have met, the majority are discretionary traders going on a hunch, going with the flow of the markets. Of the chaps I have spoken to who have performed successfully for two or three years, most conclude that after a year of watching prices in their chosen instruments, they develop a feel for the market and go with that feel. Schwager would doubtless argue that such people DO trade a "system" of sorts whether they know it or not.

My interest in the topic is acedemic since I could never sit in front of a scren 12 hours a day.

But I would be fascinated if any genuine scalpers on the site could comment on my ignorant ramblings and tell me exactly how a successful scalper makes his living!

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Scalping

Post by AFJ Garner » Fri Sep 10, 2004 1:42 pm

Oops - sorry MikeL I should have added that the relevance of my comments on scalping is that Curts' reference above refers to Mr Dennis' early days as a scalper and floor trader.

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Post by MikeL » Fri Sep 10, 2004 2:11 pm

As my kids would say, my bad. :oops: Thanks for pointing me in the right direction.

Mike

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Post by Spectre » Sun Apr 15, 2007 7:18 pm

most just make money on the 'edge' or the spread, but they have a directional bias to which side they are willing to enter the trade on. So in a volatile market when the price is sliding they will only offer and hope their floor broker buddies feed them the order flow on the slide down. And vice versa, so if most of the floor brokers look to be buying the market and a stray broker wants to sell using retail orders, its essentially low risk profit potential for anyone whos lucky enough to be hit.

and the pit becomes stratified according to relationships regarding who gets fed the order flow.

in the current climate, where pit trading is becoming extinct, lot of the traditional methods to capture this edge or the spread is being relegated to computer savvy traders who have the funds to build up the infrastructure. And the traditional pit trader/scalper needs to adapt or find a new profession. They end up giving up the edge to the computer algo HF programs. And they end up speculating and 98% of these people fail.

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Post by BARLI » Fri Apr 20, 2007 12:55 pm

whats algo HF programs?

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Post by TrendMonkey » Fri Apr 20, 2007 1:14 pm

High Frequency ???

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Post by BARLI » Fri Apr 20, 2007 2:41 pm

thanks TrendMonkey!

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