Stocks & Commodities V. 23:4 (46-53): Interview: Richard Dennis by Art Collins
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Stocks & Commodities V. 23:4 (46-53): Interview: Richard Dennis by Art Collins
Perhaps no one in the world of commodity trading has more lore attached to him than the legendary Richard Dennis, the founder, along with William Eckhardt, of the original Turtles and the system they established. Dennis’s stunningly successful involvement with mechanical systems came about when he realized that whatever worked for him in his trading could be reduced to and defined as a trading rule. Today, he pretty much eschews the public investment arena, confining himself to an exploration of mechanical trading ideas for personal use. A self-described “computer-illiterate,” he nonetheless has worked steadily with a handful of programmers for the last quarter century. To separate the myth from the man, STOCKS & COMMODITIES contributor Art Collins spoke with Richard Dennis in October 2004 at Yoshi’s, a restaurant in Chicago.
Q: How’s the current trading environment compared with your high-profile days?
A: It’s 10 times harder than it used to be. It should be. The market’s job is to derail the systems traders. Some of them are going to make money, but that can’t go on forever.
Q: Why not?
A: Because the market is changing more dramatically than it would have 15 or 20 years ago. I think that’s because there are a lot more trend-followers involved in the market than before. It’s a game where you’re forever chasing your tail.
Q: Anticipation doesn’t have a lot of place in the mechanical trading world, does it? The adage is that systems react rather than predict, and traders should have no input at all once they’re beyond a certain stage.
A: There’s something to be said for the dumb bunny approach of “I’m just looking at numbers.” I’ve done my share of talking myself out of systems that would have worked for years. You pays your money and you takes your chances. But ideas help if you’re thinking about what the market is likely to be like two years from now.
Perhaps no one in the world of commodity trading has more lore attached to him than the legendary Richard Dennis, the founder, along with William Eckhardt, of the original Turtles and the system they established. Dennis’s stunningly successful involvement with mechanical systems came about when he realized that whatever worked for him in his trading could be reduced to and defined as a trading rule. Today, he pretty much eschews the public investment arena, confining himself to an exploration of mechanical trading ideas for personal use. A self-described “computer-illiterate,” he nonetheless has worked steadily with a handful of programmers for the last quarter century. To separate the myth from the man, STOCKS & COMMODITIES contributor Art Collins spoke with Richard Dennis in October 2004 at Yoshi’s, a restaurant in Chicago.
Q: How’s the current trading environment compared with your high-profile days?
A: It’s 10 times harder than it used to be. It should be. The market’s job is to derail the systems traders. Some of them are going to make money, but that can’t go on forever.
Q: Why not?
A: Because the market is changing more dramatically than it would have 15 or 20 years ago. I think that’s because there are a lot more trend-followers involved in the market than before. It’s a game where you’re forever chasing your tail.
Q: Anticipation doesn’t have a lot of place in the mechanical trading world, does it? The adage is that systems react rather than predict, and traders should have no input at all once they’re beyond a certain stage.
A: There’s something to be said for the dumb bunny approach of “I’m just looking at numbers.” I’ve done my share of talking myself out of systems that would have worked for years. You pays your money and you takes your chances. But ideas help if you’re thinking about what the market is likely to be like two years from now.
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