"Turtle" is a nickname given to a group of traders who were part of a 1983 experiment run by two famous commodity traders, Richard Dennis and Bill Eckhardt. The goal of the study was to prove whether being a successful trader was due to a genetic predisposition or whether it could be taught. Dennis believed that a person could be trained, while Eckhardt thought trading ability it was an innate skill.


In the early 1980s, Richard Dennis and Bill Eckhardt took out a large newspaper ad looking for trading apprentices in Barron’s, The Wall Street Journal and The New York Times. Since Richard was a famous trader, the team received more than 1,000 applications that they eventually culled to just 10, and called them "turtles." The original 10 turtles were invited to Chicago for two weeks of training and were then given small accounts to trade with before proving themselves.

The turtles became one of the most famous experiments in financial history because they ended up generating returns in excess of an 80 percent compounded rate over the next four years. Dennis had demonstrated that traders could be taught a relatively simple set of rules with little or no trading experience and become excellent traders.

Since then, several books and subscription services have been published offering to teach investors how to use the turtle trading system.

Turtle Trading System

The turtle trading system covered all the decisions that were required for successful trading, including what markets to trade in, how to size positions, when to buy and sell, when to exit a losing position, when to exit a winning position, and tactics for buying and selling.

The well-defined trading system helped ensure that novice traders did not let their own judgment cloud decision-making. With a profitable mechanical trading system, the turtles simply had to follow the rules religiously and generate profits.

Trading signals were generated by looking for breakouts from key moving averages. Consistency was important in the process because the entire gains for a year could come from one or two trades, which meant it was important to hit all the trades.

When placing orders, the experts recommended placing limit orders over market orders and avoiding using stops when placing the orders. Limit orders offered a better chance for fills and less slippage than market orders, which translated to fewer missed opportunities.

The final part of the process was slowly building up experience before trading with large amounts of money. Turtles began with relatively small amounts of money before being given several million dollars to use when trading.


The turtle study and its results have come under criticism in the years since. First, because there were only 10 traders in the experiment, it is unclear whether the observed results were due in part to chance rather than from the skills acquired through training. It is further unclear how and why the initial pool of 1,000 applications was reduced by 99 percent. Perhaps the methodology used to select the 10 turtles (purposely or incidentally) chose only those individuals most predisposed to learning through training, or who already had that innate ability unrelated to training. Furthermore, the existence of people like the turtles undermines the theoretical case for the efficient markets hypothesis (EMH), which states that active trading strategies and technical analysis such as that used by turtles cannot generate excess returns because securities are fairly priced in the market. Empirical evidence has consistently shown to support the EMH; for example, showing that passive indexed funds often outperform their active counterparts.