This is a guest post by Ahmad Hassam
Are great traders born or are they made? This is the most important question that comes to the mind of anyone thinking of taking trading as a profession. This exactly was the topic of discussion between Richard Dennis and William Eckhardt, two great traders. Richard said that good traders are made and not born while Bill thought that good traders were only born.
Both Richard and Bill had been trading commodities. Richard is famous for starting as a small time trader with only $400 and ending up making more than $250 million over the course of next few years trading commodities. Richard was very good at trading channel breakouts and this is how he had made his fortune.
So, both of them argued for a while and then just in order to settle the matter once for all agreed to hold an experiment. They decided to place an advertisement in the Wall Street Journal, Barron’s and the Financial Times to recruit individuals who had never traded before.
More than a thousand people applied. They were interviewed and the group was narrowed down to 13 in the end. Richard taught them the set of trading rules he used to trade the commodities market. These trading rules are based on Richard Donchian’s channel breakout method.
These student’s of Richard became famous as the Turtle Traders. Richard taught his Turtle Traders to rigorously follow his trading rules under all market conditions. After a few weeks of training, these turtles were given live accounts to trade.
Most of them became successful traders. Only those failed who did not apply the rules when trading rigorously. These trading rules became famous as the Turtle Trading Rules. Turtle traders are famous for having made over $100 million together. Whatever, Turtle Traders are a good example of how anyone with no prior trading experience can become a successful trader by having a proven and tested trading system that he or she applies rigorously.
The important of having a proven and tested set of trading rules and applying them practically cannot be underestimated. What most traders do is they first of all don’t use a proven and tested system plus they are not disciplined in using their system.
Trading is simple if you are disciplined. Anyone can become a successful trader if he or she practices discipline in trading. One of the most important thing in trading is to control the risk AND learn to make consistent winners. Overtime, you can compound a very small amount into a fortune with this strategy.