In the American futures market, richard dennis is a legend. In the late 1960s, richard dennis, who was less than 20 years old, worked as an errand boy in an exchange, earning $40 a week. Two or three years later, he felt that the time was ripe and was ready to try his hand in the futures market. He borrowed $ l600 from relatives and friends, but due to lack of funds, he could only use a small contract to buy a seat in the "US-China Exchange" in Chicago, and spent $ l200, leaving only $400 in the transaction principal. For most people, it is very unlikely to make money with $400 in futures trading, but it is this $400 that makes Dennis magically become more than $200 million under the trading principle of richard dennis following suit. In his father's words, "Richard's 400 yuan is a good roll." After the success, more than a dozen apprentices brought out by private teachers have become a new force in the American futures market, managing billions of dollars.
Richard dennis was not born to do futures. At that time, he was under 2 1 year old and could not directly enter the exchange. His father stood inside to bid for him, and he commanded outside. So I worked on and off for two years, and I lost about two thousand dollars. On the day of his 2 1, his father breathed a sigh of relief and said, "son, do it yourself." I know nothing about this business. " At first, it was hard work and little pay, and the salary in January was less than an hour. 1970, catch up with the corn pests that year, and quickly roll 400 yuan into 3000 yuan. He had planned to go to college, but after only one week of classes, he decided to drop out of school and become a futures trader. One day, he entered a stinking bill and lost $300 at once. He felt dissatisfied, turned around and entered another one, and soon lost hundreds more. He gritted his teeth and turned to get another one, so he tossed back and forth and lost a third of his principal in one day. The lesson of losing money was very profound. After the ups and downs, he learned to master the rhythm: when losing money is not satisfactory, he quickly cut the bill and left the scene, went out for a walk or went home to sleep, let himself have a rest, and avoid being influenced by emotions and make another wrong decision. He will never add bills or be eager to make money because of losses.
The most difficult time is also the most promising time. Sometimes I lose money and don't want to ponder the market, but often the best single machine will slip away quietly at this time. Only when we seize the opportunity to make money and make full profits can we make mistakes. On the other hand, we should learn to choose the best time to make orders. Richard Denny probably estimated that 95% of the profits from his orders came from 5% of good orders. Missing a good opportunity will affect your performance, which is just in line with a commonly used sentence in technical analysis. "Let profits grow, stop losses quickly, and filter out some orders that should not enter the market, which can improve the rate of return. Many years later, when richard dennis recalled that time, he felt that tuition was a good deal and he learned a lot.
In the surge of soybean futures 1973, the soybean price suddenly broke through the four-dollar mark. Most market participants who blindly believe in history believe that it is now or never. Soybeans will rise and fall between 50 cents as before 1972, and will be emptied near the highest point of 4 10 cents in recent years. However, richard dennis bought according to the trading principle of following the trend, and soybeans rose as usual. Ten days of daily limit, the price soared three times. In just four or five months, it reached the peak of 1.297 cents. Richard dennis made enough money and moved to a bigger stage-CBOT, Chicago Commodity Futures Exchange.
The key to richard dennis's success lies in summing up experiences and lessons in time. He is basically self-taught, and all his experience and knowledge are learned from the market in practice. Most people are ecstatic after making money, and disheartened after losing money. They seldom think about why they make money and why they pay. Richard dennis always seriously reflects after losing money, finds out the mistakes and tries not to make them again next time. When making money, we should calmly think about where the right thing is and how the same method can be used in other markets. This accumulated over time, naturally formed its own unique method of making orders:
65438+
2. Technical analysis
3. Anti-market psychology
4. Risk control
1. Follow the trend. Never think that a certain price is a high-priced area and a low-priced area. Self-righteous "sell high and buy low" is very dangerous. Richard dennis believes that what can be judged is only the possible direction of the market, but how much to go in a certain direction depends on the market. Richard dennis occasionally makes an exception and tries to copy the bottom or touch the top. In the sugar trade of 1974, richard dennis shorted sugar at the price of 60 cents/pound, but it rose to 66 cents/pound in 165438+ 10, and then fell to 13 cents/pound all the way. However, he later copied the bottom near 10 cents/pound, repeatedly copied the bottom and lost money. He himself said that he lost more than he earned by short selling at the top. Therefore, the result of going against the trend is still not worth the loss. Follow the trend when making a single order. The stronger the situation, the easier it is to make money. He works as a trader on the exchange website, mainly making money with the market. Many people are always in a hurry to leave when they are profitable, even when the market goes up and down, for fear that the money they earn will be wasted. Dennis always puts the list next at this time, and always makes a lot of money the next day.
2. Technical analysis. Richard dennis mainly analyzes the market through technical analysis, and according to his years of experience and following the trend of the big market, he and his partner Dr. William Eckhard designed an automatic trading system for computer programs. But when the computer program automatic trading system runs counter to his inspiration to enter the market, he will choose to leave temporarily and not buy or sell.
3. Anti-market psychology. Don't agree with most people, because most people lose money in the futures market. There is a "market psychological index" in the futures market, which points out that if 80% of traders are bullish, it means that the head is not far away and the market will fall; 80% of traders are bearish, which means that the bottom is not far away and the market will rise. (But the author points out that for beginners, be careful. )
4. Risk control. Richard dennis learned to control risks from the first time he made a mistake and lost 1/3 of the principal. Generally speaking, a good order will be profitable soon after it enters the market. If a single order loses money a week or two after entering the market, nine times out of ten it is in the wrong direction. Even if you go back and draw it, after all this time, you may still be wrong. Always prepare for the worst after entering the order. What you think is impossible will often happen. Therefore, we must set a good bargaining price, and then resolutely bargain.
1978 richard dennis decided to leave the trading place and make a bill in the office. The reason is that the futures market was relatively simple in previous years, mainly commodity futures. By the end of 1970s, foreign exchange, securities and other futures markets gradually matured. In order to profit from more markets, richard dennis decided to leave the exchange and place an order outside the exchange. Richard dennis lost some money in the first year because he was not used to it. Later he found that:
First, leaving the site to make orders is not so fast, so we should look farther and do longer-term work.
Secondly, the direction of judgment is not the same. You can feel it on the court. For example, when the market turns, several people are always wrong. When you know that they are long or short at the same time (the United States still uses manual bidding), you will naturally have a more correct judgment on the direction of the market. After leaving the market, this information is gone, so we have to find another way to judge the market. (It is quite favorable for most domestic OTC investors. )
Richard dennis and his friend William Eckhard cooperated perfectly in futures trading, and achieved a rare success in the history of American futures, but they had great differences in their philosophy of life. Richard dennis has been doing futures since he graduated from high school. He was killed in practice. While William Eckhard was immersed in literature and pen and ink. The question they often argue is "Are successful traders born or made?" Richard dennis thinks it can be cultivated, while William Eckhard thinks it depends more on talent. Neither of them could convince anyone, so they gambled. To this end, they advertised in The Wall Street Journal at the end of 1983 and at the beginning of 1984, looking for some people willing to receive training as futures traders. The working conditions are: traders must move to Chicago, accept a meager basic salary, and get a 20% dividend if they make money from trading. Thousands of applicants came here. They selected 80 of them to interview in Chicago, and finally selected 23 people to engage in this training program. These 23 people have different backgrounds, knowledge, hobbies and personalities, and they are widely representative.
Richard dennis spent two weeks training and taught them the basic concepts of futures trading without reservation, as well as his own trading methods and principles. He teaches students to follow the trend, first analyze and decide whether the market is long or short, then do a good job in fund management when entering the market, properly control the volume of buying and selling orders, and choose the opportunity to make profits. When richard dennis visited an aquaculture farm in Asia, he found that the farm was very good at breeding turtles. When he came back, he called his disciples "turtles" on a whim. After the course, Richard. Dennis gave everyone an account, 654.38+million dollars, for actual combat practice. These "turtles" really live up to expectations. During the four-year training course, three of the 23 students dropped out of school, while the other 20 students performed well, with an average annual return rate of around l00%%%, and the 20% dividend he paid to these students reached $30-35 million. One of the most successful students earned 365,438+500,000 yuan for richard dennis in four years. After the fame spread, many big foundations hired people with high salaries. At present, most of the "turtles" are either poached or pulled out to go it alone, and they all control hundreds of millions of funds at hand and become a new force in the futures market. The reputation of the "Turtle Gang" is getting louder and louder. It turns out that Richard. Dennis's point of view is correct: successful traders can be obtained through training and learning, which has nothing to do with intelligence, and everything depends on traders' methods and principles.
1974, after Dennis entered the market at a high price of 60 cents (that is, stanley kroll, the author's teacher, bought sugar futures and made a profit of 100 times), the futures sugar continued to rise. 10 reached the peak of 165438+66 cents in October, then turned down and fell to/kloc seven months later. This single profit is tens of millions, but the initial experience against the market is not pleasant.
During the bear market of sugar futures, he tried to buy it at a price of 60 cents, but the experience was terrible. The previous windfall was not worth the loss this time. On the whole, the deficit is huge. The reason is the premium of futures contracts. In the bear market stage of sugar futures, the far-month contract is higher than the near-month contract. When it is necessary to buy a distant-month contract in another month near the delivery month, it may be necessary to pay a premium of 1 cent, such as selling the March contract at 4 cents and buying the July contract at 5 cents. Similar losses occurred again before the contract expired in July. Buying sugar futures contracts against the market requires an extra premium for each transfer, which will increase losses and lead to losses for both parties. Dennis warned against trading against the market, emphasizing homeopathic trading and winning money to the end.
During his years of speculation, Dennis made a splash, giving the impression that he could often buy at the lowest point and then short at the highest point. In fact, Dennis thinks that this kind of business is not very beneficial, and the huge profits he has accumulated do not depend on accurately measuring the top or bottom of the market. According to his estimation, 95% of his profits come from 5% of the transactions. He firmly believes in the principle of fully exploiting profits.
From 65438 to 0978, Dennis's trading performance was poor and went through an adjustment stage. He summed up two reasons:
1. Because most of the markets were in a state of sturm und drang in those years, there were countless false breakthroughs, which failed to provide reliable trends for them to show their talents;
He left the trading pool and traded remotely in the office building, losing the advantage of obtaining all kinds of information and first-hand information. It is a wise choice in the long run to buy and sell a variety of commodities, foreign exchange and interest rate futures at the same time through over-the-counter remote trading. In response to the changes in environment and conditions, he gradually adjusted his trading strategy, focusing on medium and long-term trading.
In the 1980s, Dennis became an omnipotent figure in the futures market, and placing an order to enter the market can often drive the market. His grades are constantly improving, earning an average of more than 50 million profits from the market every year. But in the stock market crash of 1987, Dennis suffered heavy losses. Its fund lost nearly half its money, and its personal account suffered the same fiasco. His investment is mainly short selling bonds. After the stock market crash, interest rates fell and bonds soared. Although the risk was controlled, it was difficult to stop the loss for a while, so the loss was heavy. He took it lightly. What makes him outstanding is that he can face adversity calmly without any emotional fluctuation. He understands the reality that heavy losses are inevitable. Emotional fluctuations are not good for trading, and too much attention will affect the overall situation. Too much care about victory or defeat means a lack of confidence in yourself. In fact, he will not be too happy when the transaction is smooth, and the emotional contusion will naturally weaken when he is unlucky.
1988, richard dennis faded out of the trading hall, leaving a legendary monument. But in 1995, he continued the winner's motto: "Get up from where you fell." Richard dennis returned to the market.
The author collected and studied richard dennis's operating system and "Turtle" training materials, and found that these methods and concepts can be completely copied. As long as investors can adhere to the principle, they will certainly succeed in investing.