Can one be trained to be a successful trader, or is it an inherent talent? This is the question Richard Dennis was aiming to solve, when he hired a group of twenty people, from the street, that had no trading experience. He gave them a set of trading rules and allocated money from his own pocket. In four years, the group made Dennis $100 million by executing his trend-following strategy.

Michael Covel wrote a seminal book about the events, that followed the initial recruitment, and the trading experiment, which has gone down in market folklore. In this podcast, Covel recalls the lessons learned from Dennis’s experiment and whether these are still applicable today. He talks about why the outcome might have been different if students were trading their own money, and why Dennis might have diverted from his own rules from time to time. Covel also gives his take on how things have changed in the world of market trading, with computer systems and complex algorithms giving some an edge, but he still, nonetheless, highlights the benefits of the concept of trend following.

Any opinions, news, research, analysis, prices or other information contained does not constitute investment advice.