Last Updated on April 24, 2022 by Oddmund Groette
This article looks at Howard Seidler, one of the traders that were taught by Richard Dennis in the famous Turtle Traders Experiment in the 1980s. Dennis argued you could teach a group of people who knew nothing about trading to get great results as long as they followed his own trend-following trading systems. Seidler was interviewed in Jack Schwager’s New Market Wizards book.
Who is Howard Seidler?
Howard Seidler is an American investor. He is the founder and president of Saxons, a U.S. registered Commodity Trading Advisor (CTA), and Commodity Pool Operator (CPO), which began managing accounts using Howard’s special strategy he termed the Diversified Program.
Mr. Seidler was first exposed to the market as a child — His Father dabbled in the markets. When he was in high school, he was already aware of the futures market and how it works.
Howard was fascinated by the futures market because of the symmetry of profit on the short and long sides of the market. He was also attracted by the potential leverage offered, so he began studying the futures market.
However, he couldn’t open an account then because he was too young, so he opened one under his father’s name with $1000 he had saved up by doing chores. Sadly, he blew the account after a year.
That experience thought him a lesson: You need to have a trading plan.
In 1984, Seidler began trading full-time as part of Richard Dennis’ original “Turtles Experiment.” After the end of the Turtle Experiment in September 1988, Seidler founded Saxon. (If you want to read more about the Turtle traders, we recommend Curtis Faith’s The Way Of The Turtle – another disciple of Richard Dennis’ turtle experiment.)
Howard Seidler’s Saxon
There are two ways Saxon offered these services. First, as an individually managed account in the Diversified and Aggressive Diversified Program. Second, as a private limited partnership, interests through the Excelsior Fund, L.P., and Excelsior Aggressive Fund, L.P.
In November 1993, Saxon added the Aggressive Diversified Program, which employed approximately two times the leverage used in the Diversified Program. Saxon tends to realize profits for its client assets via speculative trading of Commodity interests. Presently, Saxon primarily trades futures contracts on domestic and foreign exchanges. Nevertheless, they also traded in physical commodities such as exchange for physical (“EFP”).
Saxon engaged in EFP transactions in the Forex and precious metal markets. Furthermore, they may trade options on futures, forex, cash currencies, and forward contracts on commodities. Saxon uses systematic trend-following techniques. Its trading decisions are based on a combination of money management techniques, technical Indicators, and Seidler’s overall experience and sentiments regarding several markets factors and conditions. Regarding their trading approach, these are what he has to say:
Howard Seidler has averaged an annual 34% compounded return since he started trading in 1984.
Quotes from Howard Seidler:
Here are four of his trading quotes that are hard to disagree with:
I think the single most important element is to have a plan. First, a plan forces discipline, which is an essential ingredient to successful trading. Second, a plan gives you a benchmark against which you can measure your performance.
It’s important to distinguish between respect for the market and fear of the market. While it’s essential to respect the market to assure the preservation of capital, you can’t win if you’re fearful of losing. Fear will keep you from making correct decisions.
You need to have the persistence to stay with your ideas day after day, month after month, year after year, which is hard work.
You can be following your rules exactly and still lose money. In that situation, you certainly haven’t performed poorly as a trader. The basic idea is that if you follow your rules over the long run, the probabilities will be in your favor, and you’ll come out ahead. In the short run, however, conformance to a trading plan is more significant than short-term equity fluctuations.
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