Turtle Traders 3.0? Ordinary People, Extraordinary Results in 2022!
The famous Turtle Experiment of Richard Dennis of 1980's
In 1983, two famous commodity traders, Richard Dennis and Bill Eckhardt, launched an experiment to determine whether trading is an innate skill or something that can be taught. Dennis believed that successful traders could be deliberately raised, like farm-grown turtles. Eckhardt, however, believed that successful trading requires innate skill and couldn't be taught. Their experiment was designed to settle their disagreement.
Dennis recruited 23 people from a variety of backgrounds to participate in his experiment. Some participants had experience in gambling or other forms of speculation, while others had no prior experience whatsoever. The only criterion for selection was a willingness to follow Dennis's rules. The key was that they were "ordinary people" with no prior expertise in trading.
For two weeks, the participants were given intensive training in Dennis's trading system. They were then given a small account and allowed to trade live. At the end of the year, the results were in: the group as a whole had doubled its money and went to generate $175 Million in 5 years.
The experiment was a resounding success for Dennis, who proved beyond a shadow of a doubt that trading is a learnable skill. But more importantly, with a systematic trading approach of strictly following rules, anyone can become a successful trader irrespective of their background and experience.
You can read about the phenomenal experiment in two amazing books on that,
- The Complete TurtleTrader by Michael W. Covel.
- Way of the Turtle: The Secret Methods that Turned Ordinary People into Legendary Traders by Curtis Faith (who was one of the Turtles)
The Researchfin.ai Experiment of 2022
Nearly four decades after the original turtle experiment, we started Researchfin.ai with a similar hypothesis and goal - can we convert "Ordinary People" into "Extraordinary Traders" by helping them develop their own Trading Systems?
This is kind of our version of a Turtle Traders 3.0 experiment.
The big difference between the 1980s and the 2020s is that technology has advanced significantly. 60-73% of the trading in the US Market happens algorithmically (Source: Wall Street). However, most of these happen at the institutional and hedge-fund levels. Retail trading still is largely discretionary because most traders are not coders. We wanted to change that!
Our mission with Researchfin.ai is to enable anyone to learn, research, create, test, and deploy Trading Systems irrespective of their trading or coding experience. Our vision is to create a groundbreaking no-code systematic trading platform powered by AI and Machine Learning that creates the next generation of the equivalent of turtle traders in 2022 and beyond.
Results of Researchfin.ai Internal Trading Hackathon
We have spent years of research in creating the platform to help translate our vision into a reality and deliver on our mission. As we come closer to our public launch, we thought we should do an internal experiment to see how close we are to our vision.
So, we decided to do an internal Trading Hackathon. Our team comprises young engineers, designers, and data scientists. They are phenomenal in their work. But most of them are not traders. They did not know about trading until they started working on our product. So, we felt they would be the perfect cohort of "ordinary people" in the context of trading. The hackathon's goal was to have them use our platform as end-users and create their own Trading System by researching concepts and setups online and trying to replicate and improve them using our product UI as end users would.
We were completely blown away by what they have been able to achieve.
- While we gave them almost 10 days to work on their Trading System, most of them could create something in a day or two.
- The Trading Systems they created ranged from a wide variety of Trend Following, Momentum, Mean Reversion, Value Investing, Day Trading, etc. - we were amazed at the diversity of systems that they created.
- They were able to iterate on their hypothesis, identify what worked and what didn't, and improve to produce some phenomenal results.
- Note that these results are from the past 3M - 6M, where the market, in general, has delivered negative returns and huge drawdowns.
Here is a small snippet of the results of some of the Trading Systems that they created.
Richard Dennis was right. His original hypothesis holds as well in today's world: Systematic Trading can help transform ordinary people into extraordinary traders.
Also, we couldn't be more proud of the platform that we have been able to create that democratizes systematic trading for the masses. We are super excited to launch this platform soon to empower the rest of us - the ordinary people to become extraordinary traders.
We want to extend these experiments to external beta testers as well. So very soon, we will also launch an external hackathon. If you are interested, please signup for an invite on our website: https://researchfin.ai
If you want to learn the fundamentals of systematic trading, this foundational book by Ruban Phukan, our co-founder and CEO, is a great starting point. It has been a #1 bestseller on Amazon with 5-star reviews!