Let's be honest, aren't you tired of investing in someone else's beach house? Of seeing how your money pays for the Lambo of someone who boasts on social media that they know how to trade, and on top of that with your money.
Now, let's get to the point, how to change from being a forced donor in the markets, and I believe you didn't know this story...
Do you know the trading legend who in the 80s transformed the trading game FOREVER?
He started with $400 from his father and transformed it into over 200 million dollars, thanks to his vision.
How did he do it? Here are the fundamental bases of his bold approach...
At that time, being a trader was a matter of status; if you didn't belong to the financial and intellectual elite that dominated the markets, YOU WERE ABSOLUTELY NOBODY, AND YOU WOULD NEVER BE ABLE TO TAKE A CENT from the markets.
Richard Dennis thought differently. His disruptive approach and philosophy changed the landscape forever.
His testimony literally speaks of how to win the game against the best player on their turf, with certain bases that were until then unthinkable...
Dennis started working on a trading desk at the Chicago Mercantile Exchange at just 17 years old, developing his own trading style, which emphasized the importance of discipline and risk management, becoming a millionaire by age 26.
Unlike other traders, his anti-system approach elevated him to levels where nothing mattered, neither the amount of money you had in the bank, nor your intelligence, nor luck.
His philosophy was based on the belief that trading could be taught and that anyone could learn to be a successful trader, based on a set of rules and a particular style of trading: using the scientific method.
To test his theory, he launched an experiment known as "Turtle Trading," where he trained a group of inexperienced individuals in trading and taught them his methodology. The results were astonishing: many of these "turtles" managed to achieve significant profits in the market.
If we could summarize what his philosophy and practice were based on, as he himself said, he was a scientist trading; he applied the same rules of the scientific method to trading, changing the way markets were operated, developing a system that would allow him to achieve positive returns in the long term in any market, and these would be the summarized keys:
1. Observation and Hypothesis Formulation
Dennis began by observing the markets and noticing patterns in price behavior. From these observations, he formulated hypotheses about how prices moved and what factors influenced those movements. For example, he believed that markets tend to follow trends and that these trends could be leveraged for profit.
2. Development of a Rule-Based System
With his hypotheses in mind, Dennis developed a set of trading rules based on trend identification and risk management. These rules include:
Entries and Exits: Established clear criteria for entering and exiting positions, based on trend signals. Avoiding buying low, selling high.
Risk Management: Use of stop-loss and a position size increase strategy based on volatility, and using a fixed % of your capital to trade.
3. Testing and Validation
He approved his rules under different market conditions. This allowed him to adjust and optimize his system, ensuring it would work not only in a favorable environment but also in volatile or bearish markets.
4. Results Analysis and Adjustments
After implementing his system, he dedicated himself to analyzing the results of his trades. This analysis allowed him to identify which aspects of his strategy worked and what adjustments were needed. Just like in a scientific experiment, this feedback process was crucial for improving his approach and maximizing his returns.
Conclusion
This scientific rigor not only allowed him to achieve impressive results, but also developed a systematic model based on observation, hypothesis formulation, testing, and analysis from data, which is currently applied by many traders, enabling them to STAY IN THE GAME FOR ONE MORE DAY.
He demonstrated that trading is not a game of chance, but of probabilities or in his own words: occasionally the impossible can happen, and it will happen, so you must know what you are going to do when the market does what it is doing.
It's time to read.
