There are several great (and a few not so great) movies about trading. One of my favorite ones is a classic called “Trading Places.” For those of you who may not be familiar with the film, it stars Dan Aykroyd and Eddie Murphy. Aykroyd plays Louis, an accomplished manager of a commodities brokerage in Philadelphia. Murphy plays Billy Ray, a streetwise hustler. The brothers who own the brokerage, Randolph and Mortimer Duke, make a bet on whether a successful trader like Louis could survive if he lost his job and home. They also speculate on whether Billy Ray could succeed in business if the opportunity was handed to him.
The argument between the brothers is whether environment, nurture, is the critical element to success or if success in the markets is something someone is born with, nature. Randolph Duke is convinced that the unfortunate Billy Ray is just a product of bad environment. He bets his brother Mortimer that if given the chance, Billy Ray could be as sensational, if not more than, Louis. Mortimer believes that Louis’ success is a result of his “good stock,” and that he could thrive even if his job, money and home were taken away.
The interesting thing is that just after the movie was released in June 1983, there was an actual experiment taking place. In December of 1983, Richard Denis was a well-known commodities trader who reportedly turned $5000 USD into a fortune worth over $100 million. He, along with friend William Eckhardt, placed an ad in the Wall Street Journal for people who were interested in learning how to trade. They selected 14 people who were taught a specific method for trading trends in the markets. The group became known as the turtle traders because Dennis visited a turtle farm in Singapore and stated they were raising traders just as they raised turtles. There are varying reports as to how successful the turtles were, but all agree that Dennis was able to take a group of novices and turn them into accomplished traders.
The movie and the real life experiment should be a great encouragement to anyone who is interested in entering the field of trading. It doesn’t take experience in a brokerage firm or even a finance degree to be able to become a successful trader. If anything, this may even be a detriment. All too often, people with trading experience prior to attending one of our courses will hold onto or revert to their old techniques that were unsuccessful. As a trading instructor, I have seen people from all backgrounds learn how to make consistent profits from speculating in the markets. Those who are successful share a willingness to learn and an open mind to implement Online Trading Academy’s core strategies into their own trading.
The Turtle Experiment also proved another point. The traders were taught a core strategy and were not allowed to deviate from that strategy. The combination of a proven strategy and discipline to follow it is the key to becoming a consistently successful trader. The traders were taught to cut their position size when not trading well, and also to restrict the size of their money at risk versus their total account size at all times.
To be consistently successful in trading or investing in any market, you must have a rule based strategy and the discipline to follow those rules. To create the strategy, you will need the proper trading education from those who have been successful in the markets. To ensure you will not deviate from that plan, you should have a trading mentor who can show you the right way to trade and invest and also coach you throughout.
At Online Trading Academy, we teach our proven strategies that have been working for institutional and retail traders for many years and in many market environments. Through the Extended Learning Track, students have a mentor that will guide them and them help maintain their discipline to follow those plans.