The Trading Turtle Experiment

Richard Dennis and William Eckhardt are not names you will immediately recognize. But if you are interested in becoming a successful Forex trader, it is worth reading up on them as it might change your life.

In the early 1980’s, the two commodity traders had turned $5000 into $100million. Of course, they were ecstatic and often discussed the reason for their success. Eckhart believed that it required a special ‘gift’ or trading instinct that had resulted in the profitable trades. Richard, on the other hand, firmly insisted that had nothing to do with an inherent nature but that he had taught himself how to trade by using specific moves that resulted in the right choices of when to enter or exit the market and at what price to make the move. He concluded that anyone could be taught to trade.

He decided to run an experiment. He placed an ad in The Wall Street Journal and thousands applied to learn trading at his feet. He chose a group of people of 14 applicants each with different backgrounds, ages and financial knowhow and over a period of 14 days he taught them all about Forex. He called them the ‘Trading Turtles’  after recalling turtle farms he had visited in Singapore and deciding that he could grow traders as quickly and efficiently as farm-grown turtles.

Among the most important concepts he taught them was how to implement a trend-following strategy. The idea is that the “trend is your friend”, so you should buy futures breaking out to the upside of trading ranges and sell short downside breakouts. In practice, this means, for example, buying new four-week highs as an entry signal.

At the end of the two weeks, he opened an account for each member of the group and deposited $250,000 in each account.  As a group, the Turtles personally trained by Dennis earned more than $175 million in only five years. Richard Dennis had proved beyond a doubt that beginners can learn to trade successfully.

The idea that anyone can be taught to trade Forex continues today. There are many online tutorials available today, that provide the trader with information that will guide him into successful trading. There aren’t many millionaires out there that are willing to foot the original deposit, but with the proper instruction, making money in Forex is still possible.

Forex Tips for Beginners

Top 15 Forex Terms

Forex TermsIf you are new to forex trading, check out this forex glossary of terms. Here you will find all the definitions you will hear/see while trading in the forex market. You might also check out Investopedia’s Top 300 Forex Terms [PDF]. If these are too much for you all at once, focus on learning these top 15 Forex terms:

Ask Price – the price using of which trader can purchase the base currency.

Base Currency – the first currency which is listed in any currency pair used for trading in the forex (FX) market.

Bear Market – a market with pessimistic diagnoses and declining prices.

Bull Market – a market with rising prices and more optimistic trends.

Bid Price – usually displayed as the ‘left quote’ stands for the price traders may use in order to sell any base currency

Counter Currency – the second currency in a pair and usually its value is predetermined by the opposite base currency’s value

Cross Rate – a price quote composed of any currency which is quoted against any other currency which can’t be related to USD. This quote is the combination of the individual rates for exchange 2 currencies against USD.

Day Trading – intra-day trades based on opening and closing his trading positions during one trading day and to the end of this day a trader has no any position open.

Fed – short for Federal Reserve which in its turn denotes the central banking system effecting significantly on the trends of the Forex market.

Leverage – the loan a trader takes for the FX broker which allows trading only having a small capital. In such way one can increase his profits but the risks get higher as well.

Margin – another term every trader should understand and it denotes the minimal amount of cash deposit a trader can put up for a certain transaction.

Pip – the smallest price which can be found in the last number of the currency pair rate. Commonly it is the 4th digit located after the decimal point.

Price Trend – a stable movement of the currency prices with a certain direction. Spotting trends can capitalize the potential.

Spreads – the differences between the ask and the bid prices.

Stop Loss – the trade order which closes an open trading position in automatic way for preventing losses if the FX market fluctuates against this chosen position.

Practice on a Demo Account

For every new forex beginner, besides learning forex basic knowledge, practice on demo account is very important. They can gain real trading experiences from this process. Most forex brokers offer a practice account or demo account these days. Try trading on a few different ones and see which platform you prefer. The modern day demo account is akin to what is referred to as “paper trading”. It is always wise to gain some familiarity with the investments you want to trade, and nowadays, with with the trading platforms available. All the platforms function differently so if you have chosen one, stick with it, you will only confuse yourself if you keep changing.

If you are considering moving on to the real thing, choose a platform that offers good support. If you are in doubt you could always research the reviews on a company but typing the ‘name of company’ followed by ‘review’. It is very important to choose a demo account provided by forex broker that is very similar to the real account. When you practice on demo account a while, it will be easier for you to switch to trade on real account. PROFIFOREX is a good broker which provides good demo account for beginners. Demo account is exactly the same as real one and they provide good services.

Read a Good Forex Trading Book

I have mentioned several forex trading books on this site, but one of the best is The 10 Essentials of Forex Trading: The Rules for Turning Trading Patterns Into Profit by Jared Martinez who is known as the “FX-Chief”. He is the founder of the Market Traders Institute, the worldwide leader in Forex education and frequently blogs on JaredMartinez.com. According to the book description, “No matter your level of trading experience, you can develop the skills you need to become a consistently successful foreign currency trader-from using the right trading tools and balancing equity management to trading in buy and sell zones and identifying trends and trendlines. You’ll discover what drives the Forex market and how to navigate the three stages of Forex trading: acquiring new trading rules, controlling disciplined thought, and implementing disciplined action.” One reviewer said, “This book encourages you to have a trading plan; using a selected number of indicators looking for a convergence between them. It also focuses very heavily on your mindset which is paramount for success. Irrespective of your level of knowledge and trading experience in Forex…this book is great value for all traders.”

Top 5 Common Mistakes Forex Traders Make

If you’ve ever heard the quote, “Smart people learn from their mistakes, geniuses learn from the mistakes of others,” you’ll pay attention to the mistakes forex traders have made before you so you don’t have to make them yourself. Here is a list of the top 5 most common mistakes forex traders make:

  • Inconsistent Trade Strategy
  • Lack of Knowledge
  • Lack of Discipline
  • Not Using a Demo Account First
  • Analysis Paralysis

In other words, educate yourself as much as possible. Read everything you can get your hands on and practice with demo account. The more knowledge you have, the more confident you will become in making trade decisions. Education is the best investment you can make before leaping in at the deep end. You might also want to check out forex forums like Forex Tips.

Mesh Networking

In one of my last posts about networking in Indianapolis, Jeremy Houchens of Pro Media Publishing said, “Thanks for including the links to the local events!”, which when juxtaposed against a recent comment from Ashley Hardy of ANH Media about how, “You know all the networking events in Indianapolis”, and it made me wonder if I really had become a source for Indianapolis networking knowledge.

Jeremy, Ashley, and I are all business owners with loose affiliations and referral partners that allow us to sustain and grow without the burden of an employee/partnership relationship. This is more than just the gig economy‘s freelancers who are in the business of creating jobs for themselves. This is about building bigger companies with less employees. It’s The Startup of You without the Long Hallway. It’s Mesh Networking.

Now I know ‘mesh networking’ is already a term for interconnected devices who can communicate to use each other as nodes on a network, but that’s exactly what I’m suggesting these new types of solopreneur businesses are. The business owners are the ‘devices’ and through each other, they find work.

3 Ways you Know You’re a Mesh Networker

1. You’re a power connector – a power connector connects two people who didn’t previously know each other, thereby helping two people at once. Mesh networkers need to be power connectors in order to leverage their networking time.

2. You’re building a business, not a job for yourself – like Steven Covey, you begin with the end in mind and that end does not include you being in the employee corner of the Cash Flow Quadrant for long. Your end goal is lower-right and you’re moving there as fast as possible.

3. You’re not interested in partnerships and employees right away – you’re more interested in finding the right referral partners who can funnel business to you while you’re funneling business to them. It’s all about strategic partnerships and selling first.

7 Indianapolis Networking Events You May Not Have Heard Of

1. Power Circle Network – PCN is a free version of Rainmakers and BNI-type networking that meets weekly on the north side in Carmel, Westfield, and Noblesville; on the east side in Broad Ripple, Cumberland, Greenfield, and New Palestine; on the south side in Greenwood, Southport, Beech Grove, and Franklin; and on the west side in Avon and at Initech Park.

2. Linking Indiana – a Facebook and Smaller Indiana group that holds monthly networking events with a training session – usually with a speaker, but sometimes simply fun exercises like “speed networking”. In the past the events have been at the Rathskeller downtown, but they could be anywhere in the future so sign up for the Facebook group to stay informed.

3. Meetup.com – after 9/11 the founders wanted to use the Internet to help people meet together in person around topics they loved or found interesting. It just so happens that meetups (as they are called) can also be used to network with other like-minded individuals. I currently run a meetup on Indianapolis Marketing. Most meetups are free. Verge Indy is currently the biggest meetup in Indianapolis.

4. BNI Indiana – Business Networking International is a networking group that meets weekly in groups all around the Greater Indianapolis area. It’s a paid membership group, but this and the strict attendance rules means the members are more likely to come. Seeing the same people week after week leads to trust and more referrals. You can attend each BNI meeting twice for free to try them out.

5. Glazer Kennedy Insider’s Circle Indianapolis aka “No BS Indy” – you won’t see this billed as a networking group, because it’s not – but anytime you get a room full of business owners in one place, networking is bound to happen. Scott Manning teaches business owners how to grow their business as fast as possible and charges them for this information, but you can go twice for free.

6. Blog Indiana – this conference is an annual event for bloggers and Internet marketers hosted by Noah Coffey and Shawn Plew. It’s a chance to meet the big players in the business like Douglas KarrErik Deckers, or Tricia Meyer. It’s also a chance to meet up-and-comers like Ben Risinger who built DoItIndy with Scott Tolin and just recently founded Somnium Media with Stephanie Eppich Daily and Susan Decker. It’s a two-day event.

7. The Combine – this conference is also an annual event for startups, which is sponsored by, among others, Sproutbox. Like Blog Indiana, The Combine is a two-day event, but it’s in Bloomington spread over the IU campus. This is where I saw Merlin Mann speak and I met Cedric Savarese, the founder of Form Assembly, and up-and-comer Nick Tippman, both of whom I invited to Verge Indy (’cause I’m a mesh networker).