The name of Richard Dennis must be familiar in the ears of international forex traders. Richard Dennis is a mentor to his students to become a successful trader. These students will later get the nickname “turtle”. So what exactly did Dennis do?
Here are 6 messages of trading psychology from Dennis for the turtles:
What can you win, what can you lose, what are the possibilities of either happen.
You should know the psychology of trading first before opening a position in the market. Each turtle is expected to already know what he can win, eliminate, and consider both of these things can happen. According to the legend of these turtles, trading was only a matter of possibility. Dennis considers that trading must be done by calculating the statistical results of the analysis for some time. Turtles approve Edge. In this Edge Calculation the estimated number of trades trading profit or loss. The existence of this Edge can make turtles become more disciplined and trust the trading system that is run.
Know what you are going to do when market does what it’s going to do.
You must know what kind of system that you will use in your trading well. One of the trading system is Turtle Trading. In this system, turtles are agreed to be disciplined in trading. In Dennis’s second trading psychology, turtles find out what is right for what the market is giving us.
You are not special, you are not smarter than the market, so follow the rules!
Dennis who agreed loudly wasn’t special, or smarter in the market. In this case, Dennis always arranges to discuss the trade rules that have been designed. Dennis believes, with a disciplined trading system that has been designed that is designed without involving feelings of fear or greed, all traders can certainly be successful.
Every now and then, the impossible can and will happen.
In the trading system used by sea turtles, the success rate is determined by the possibility of being carefully calculated. Stop Loss based on their trading system will continue to move according to the direction of market movement. Besides, the tortoises will also increase their position in the trade that goes according to their plan. Stop this Loss, those who oppose the movement, both supported by their plans. Dennis pretends to the tortoise, you will never know when the market will go in the same direction or not, you just need to prepare the best to take profits and reduce losses in the market.
How to handle profits properly is a separation point between winner and loser in trading.
The next trading psychology from Richard Dennis is how to process profits in trade by using good money management. In money management, the sea turtles determine the number of transactions based on a percentage of their equity, then divided by the amount of their Stop Loss. By using this money management, as equity increases, the value of transactions used will continue to rise. Meanwhile, when equity decreases, the value of the transaction used will also decrease. By using money management like this, it is proven that the turtles can multiply their money quickly in the future, and not make much money when the future is not good.
It’s not about the frequency of how correct you are, its about the magnitude of how correct you are.
Due to popular and based follower trends, sea turtles are always ready to enter certain markets. They do not need to be present and correct in every position they enter. However, they always get more in every position that suits the plan of their trading system. Dennis said, “To be a successful trader, we must not ask us. We must move focus on the great opportunities that occur in the market.”
In his career, Richard Dennis has shown us how important a mentor is in the process of making us a successful and reliable trader. He also always stressed to the turtles, that discipline and trust in the trading system that we profess is the key to our success in trading. According to Investopedia, a sense of enthusiasm to continue learning, deepening, and updating knowledge must be possessed by a trader.