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| Illutration created and copyright by Drake Kim |
A Bet That Shook Wall Street
In 1983, inside a Chicago office, Richard Dennis and William Eckhardt made a historic bet. Is the ability to make money an innate talent, or can it be taught?
Dennis believed that trading could be learned, while Eckhardt insisted that natural instinct was essential. To settle the debate, they devised an experiment: train a group of novice traders to follow a set of fixed rules and see if they could make real money in the markets. Thus, the Turtles were born.
The name "Turtle" was inspired by Dennis's visit to a turtle farm in Singapore. He declared, "I will grow traders just like these turtles." But his goal was not just to train traders—he wanted to create human money-making machines, devoid of emotion.
A Machine for Following Trends—But Humans Are Not Machines
The core principle of Turtle Trading was simple:
- Buy when the market breaks a 20-day high.
- Sell when it falls below a 20-day low.
- Follow strict stop-loss rules.
- Manage risk by scaling into positions.
- Suppress emotions and stick to the system.
It seemed foolproof—so simple that even a beginner could follow it. But the problem was that humans are not simple.
At first, most Turtles strictly adhered to the system, and the results were astonishing. They made an incredible amount of money, surprising even Wall Street. Dennis felt vindicated—he had seemingly proven that making money was a learnable skill. But then, something unexpected happened.
Illutration created and copyright by Drake Kim
The Downfall of Human Nature
As profits rolled in, the Turtles began to change. The same traders who had once followed the rules precisely started listening to their intuition.
- "This time is different."
- "This trade is a sure thing."
These thoughts crept into their minds. Fingers that had once clicked the mouse according to strict rules now clicked based on emotion. And just like that, the money started to disappear.
What went wrong? On paper, following rules should have been easy. But when real money was at stake, human nature took over—fear, greed, overconfidence, and regret. The system was designed to be perfect, but humans are not machines. Dennis hadn’t accounted for this. In the end, trading wasn’t just about numbers; it was a battle of psychology.
Can We Become Turtles?
The failure of many Turtle Traders is a familiar story. Many retail investors start by following strict investment rules, only to later abandon them with thoughts like "This time is different."
The greatest enemy in investing isn’t the market—it’s ourselves. Sticking to principles is harder than it seems, especially when money is on the line. As legendary investor John Templeton once said, “Only those who can endure pain will become rich.” To survive in the market, one must overcome human nature.
Illutration created and copyright by Drake Kim
Lessons from the Turtles’ Journey
The Turtle Trading experiment wasn’t a complete failure. Some of the Turtles continued to succeed, and a few even became legends on Wall Street. However, the biggest lesson from their story isn’t about mechanical systems—it’s about self-discipline. True investing mastery comes from controlling one’s own emotions.
Anyone can be a Turtle. But the real challenge is that we are not turtles—we are human. And as humans, we will always be tempted to break the rules. In the end, the winners are not just those who follow a system but those who can stay disciplined even when emotions run high.
If you found this story intriguing, stay tuned for the next one. After all, knowing how to make money is important—but knowing how not to lose it is even more crucial.
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