Episode 67 ... "Jerry Parker" (60:57)
Parker is one of Richard Dennis's original Turtle Traders
1983 ... Dennis ran ad in Wall Street Journal and New York Times
Parker was a public accountant working in Virginia when he saw the ad in the WSJ
"Rich" was a very smart and nice person
Parker has mild Southern accent
Jan. 1984 Parker started trading in Chicago using Rich's money after 2-3 week course
12 people hired
"Rich" visited turtle farm in Asia, that's where the turtle nickname comes from, raising traders not turtles
1988 program ended, Parker went out on his own
Turtle name has a lot of cachet, everyone knows about it
Fall of 1984, second group of really smart nice people, second turtle group even sharper than first
Don't get drunk on good performance
Parker definitely wanted to exit the accounting business
How to size the trades is something he may not have gotten right if not a turtle
Trading is hard, trading is uncomfortable, do the hard thing, trade small, don't risk too much
Build systems that can last for a long time
Trading shouldn't be easy
Low win rates, frequently give back all your profits
Idea of finding a trading method that fits your personality is silly
Finding a trading method that works at all is incredibly hard, forget about your personality
Buy the highs, sell the lows
Add to winners, never add to losers
Lose 30% you'd be in trouble, if you lose 50% you'd be in big trouble
Are you following the rules but losing money? It's fine said the mentors
1986 Feb or March and crude was going from 40 to 10 and they were up 200%, looking at a million dollar bonus
Experienced a 60% down day, so ended up 140% on the period ... didn't do anything wrong, was just leveraged
Wrong means you don't follow the system
Only one or two people had a computer and the ability to program it
Used moving averages as targets?
Trading a few million with Rich was fine, but not hundreds of millions
Turtle trading was mathematical, systematic, diversified, rule-based ... no discretion whatsoever
Feb. 1988 went out on his own ... involved in grain markets that year
Four year track record gave instant credibility
People are greedy so they threw money at him
25 markets when he started, now trades 120 futures markets
Trades 100 single stock futures
We're in a zero interest rate world [interview in 2016], so 12% returns amazing
Average holding time of a year
His win rate in the low 40s
Tries to take optimal losses, not too tight, not too loose ... 20% is too tight
Average win 2-3x the average loss
5-10% of your trades will make all the money, it's very hard to stick to it without monkeying
What's the sample size in your backtest?
Entry parameter, exit parameter, stop loss parameter, that's it... don't add more
Don't get fancy and eliminate trades, get the largest sample size possible
Don't try to develop systems by market, make something that works in ALL markets
You have to go both short and long, adds diversification and increases sample size
Risk profile rises dramatically if you just trade one market or trade one side only (long or short)
Don't fall in love with numbers or think the future will look like the past
Zero interest rates force one to think outside the box
Managing other people's money is a great business
More rules, more regulations, more compliance
Fire your bad clients
Don't promise returns
Most important question to ask a CTA: can you maintain your faith in your system when you're losing money?
You can't succumb to fear and abandon your system when you're losing
It's a huge edge if you can trade like a robot
If you trade too large, then you can't stick with it
Be mechanical, be robotic
What he learned in 1983 still works today
Website: Chesapeake Capital
Twitter: @rjparker09 … looks defunct, new one: @rjpjr12
