SI161: Retaking the Turtle Trader Entrance Exam ft. Jerry Parker
Top Traders Unplugged
The Systematic Investor Podcast Series - Part 2
Thanks for listening to the systematic investor podcast series. Next week, i'm joined by morrits. If you have questions about systematic investing, send us to me with the word question in the subject line,. And we'll try to get it on the shol and remember, all the discussion that we have tinvestment performances about the past does not guarantee future performance.
Jerry Parker joins us for a very special episode today, where we invite him to answer the original interview questions from Richard Dennis’s famous Turtle Trader program. This is a fascinating insight into the world of Trend Following, and one which allows us to see whether Jerry has changed his opinions since working Richard Dennis, as well as explain some of his reasons for the answers chosen today. We’ve posted the questions in the timestamps below, so feel free to take the test and compare your answers to Jerry’s.
Also check out my interview with Turtle Trading legendary mentor Richard Dennis here.
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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE
In this episode, we discuss:
- Favouring long or short positions
- How you can go broke taking small profits
- Reasons to ‘fade the fundamentals’
- The importance of down-time and vacations
- Whether we can rely on opinions of the crowd
- System diversification
- Why you should trade small
- The questions that Jerry would add to the Turtle Trader test today
- Avoiding trades due to gaps in price
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And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.
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Send your questions to info@toptradersunplugged.com
And please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more people can discover the podcast.
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Episode TimeStamps:
00:00 - Intro
02:10 - A huge thank you to our listeners for leaving your 5-star reviews in iTunes, and please share this podcast with a like-minded friend:
https://top-traders-unplugged.captivate.fm/listen
02:19 - I share a hugely important story to my family, as we mark the 10-year anniversary of my son's Sudden Cardiac Arrest and our KidsHeart charity welcomes your support. For further information, contact us via: info@kidsheart.ch
08:17 - Weekly review of returns
12:00 - Jerry retakes the Original Entrance Exam for the Turtle Program:
13:08 - Question 1: One should favour long or short positions. Is that true or false?
14:56 - Question 2: One should know precisely when to liquidate if a profit occurs. True or false?
14:56 - Question 3: One should trade the same number of contracts in all markets. True or false?
16:08 - Question 4: If one has £100,000 to trade, one ought to risk £25,000 on every trade. True or false?
16:26 - Question 5: On initiation, one should know precisely where to liquidate if a loss occurs. True or false?
16:34 - Question 6: On initiation, one should know precisely where to liquidate if a loss occurs. True or false?
17:02 - Question 7: It helps to have the fundamentals in your favour before you initiate. True or false?
17:26 - Question 8: A gap up is a good place to initiate if an uptrend has started. True or false?
17:52 - Question 9: If you anticipate buy stops in the market, wait until they are finished, and buy a little higher than that. True or false?
19:29 - Question 10: Out of our 3 types of orders, market orders, stop orders, and resting, market orders cause the least skid. True or false?
20:34 - Question 11: The more bullish news you hear, and the more people going long, the less likely an uptrend is to continue after a substantial uptrend. True or false?
21:02 - Question 12: The majority of traders are always wrong. True or false?
21:29 - Question 13: Trading bigger is an overall handicap on one’s trading performance. True or false?
21:57 - Question 14: Larger traders can muscle markets to their advantage. True or false?
22:15 - Question 15: Vacations are important for traders to keep the proper perspective. True or false?
23:16 - Question 16: Under-trading is almost never a problem. True or false?
23:47 - Question 17: Ideally, average profits should be about 3 or 4 times average losers . True or false?
24:07 - Question 18: Traders should be willing to let winners turn into losses . True or false?
24:45 - Question 19: A very high percentage of trades should be profits. True or false?
25:02 - Question 20: A trader should like to take losses. True or false?
25:53 - Question 21: It is especially relevant when the market is higher than it’s been in 4 and 13 weeks. True or false?
26:19 - Question 22: Needing and wanting money are good motivators for good trading. True or false?
26:36 - Question 23: Ones natural inclinations are good guides to decision making in trading. True or false?
28:01 - Question 24: Luck is an ingredient for successful trading in the long run. True or false?
28:46 - Question 25: When you’re Long, limit up is a good place to take a profit. True or false?
29:16 - Question 26: It takes money to make money. True or false?
30:21 - Question 27: It’s good to follow hunches in trading. True or false?
30:32 - Question 28: There are players in each market one should not trade against. True or false?
30:49 - Question 29: All speculators die broke. True or false?
31:51 - Question 30: The market can be understood better through social psychology rather than economics. True or false?
32:36 - Question 31: Taking a loss should be a difficult decision for traders. True or false?
32:55 - Question 32: After a big profit the next Trend Following trade is likely to be a loss. True or false?
33:32 - Question 33: Trends are not likely to persist. True or false?
34:55 - Question 34: Almost all information about a commodity is at least a little useful in helping to make decisions. True or false?
35:39 - Question 35: It’s better to be an expert in one market rather than try to trade 10 or more markets. True or false?
36:20 - Question 36: In a winning streak, total risk should rise dramatically. True or false?
36:57 - Question 37: Trading stocks is similar to trading commodities. True or false?
38:04 - Question 38: It’s important to know how much you are ahead or behind during a trading session. True or false?
38:33 - Question 39: A losing month is an indication of doing something wrong. True or false?
38:47 - Question 40: A losing week is an indication of doing something wrong. True or false?
38:55 - Question 41: The big money in trading is made when one can get long at the lows after a big downtrend. True or false?
39:10 - Question 42: It’s good to average down when buying. True or false?
39:28 - Question 43: After a long trend, the market requires more consolidation before a new trend starts. True or false?
40:43 - Question 44: It’s important to know what to do if trading commodities doesn’t succeed. True or false?
41:44 - Question 45: It’s not helpful to watch every quote in the market one trades. True or false?
42:32 - Question 46: It’s a good idea to put on or take a position all at once. True or false?
42:49 - Question 47: Diversification in commodities is always better than being in one or two markets. True or false?
43:07 - Question 48: If today’s profit or loss makes a significant difference to your net worth you’re over-trading. True or false?
43:40 - Question 49: A trader learns more from his losses than from his profits. True or false?
44:32 - Question 50: Except for commission and brokerage fees, execution costs for entering orders are minimal over the course of a year. True or false?
45:03 - Question 51: It’s easier to trade well than to trade poorly. True or false?
45:25 - Question 52: It’s important to know what success in trading will do for you later in life. True or false?
46:10 - Question 53: Uptrends end when everyone gets bearish. True or false?
46:25 - Question 54: The more bullish news you hear, the less likely a market is break out to the upside. True or false?
47:11 - Question 55: For an off-floor trader, a long-term trade ought to last 3 or 4 weeks or less. True or false?
47:40 - Question 56: Others opinions of the markets are good to follow. True or false?
47:49 - Question 57: Volume and open interest are as important as price action. True or false?
48:39 - Question 58: Daily strength and weakness is a good guide for liquidating long term positions with big profits. True or false?
49:28 - Question 59: Off-floor traders should spread different markets of different market groups. True or false?
49:48 - Question 60: The more people going long, the less likely an uptrend is to continue in the beginning of a trend. True or false?
50:11 - Question 61: Off-floor traders should not spread the same delivery month across different commodities. True or false?
50:20 - Question 62: Buying dips and selling rallies is a good strategy. True or false?
51:24 - Question 63: It’s important to take a profit most of the time. True or false?
52:04 - Niels: What one or two questions would you add to this test today?
55:53 - Jerry’s score results
55:57 - Benchmark performance update
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