Guan Jinsheng was trapped by his own judgment. Nick Leeson was trapped by his own lie. Both stories are painful to read, yet you can at least point to where the "error" was. Guan should not have gone all-in during those final eight minutes. Leeson should not have hidden that twenty-thousand-pound mistake.

Richard Dennis' story is different. He made no obvious error. He did something that was logically perfectly correct, and he succeeded. Then that success itself became a deeper failure.

This is not one man's tragedy. This is the tragedy of a belief.

In 1949, Richard Dennis was born in Chicago to a working-class family. At seventeen, he took a running job at the Chicago Mercantile Exchange, delivering orders to the floor traders. The exchange had a rule that traders must be at least twenty-one. He was seventeen.

But he already wanted to trade.

He found a way: he hired his own father. His father would stand in the trading pit executing orders while Dennis stood beside him as his own runner. In reality, Dennis was making the decisions; his father was just his hands. The arrangement barely passed muster as far as the rules went.

He borrowed 1,600 dollars from his family. He spent 1,200 buying a seat at the MidAmerica Commodity Exchange, leaving 400 dollars as his trading capital.

Four hundred dollars.

What happened in the next ten years is almost beyond normal description. He caught the super-trend in commodities during the seventies. In 1972, the Soviet Union secretly bought thirty percent of American wheat, and the grain market began to fluctuate wildly. The age of inflation began, commodity prices climbed steadily. Dennis' method was very simple: buy when price makes new highs, sell when it breaks below support, add to the position when the trend is established.

By 1973, his capital exceeded one hundred thousand dollars. In 1974, just from soybeans he made five hundred thousand. By 1975, at age twenty-six, he was already a millionaire. By the early eighties, his personal wealth exceeded one hundred million dollars.

Four hundred dollars to one hundred million. About ten years.

The Chicago Exchange gave him a nickname: "The Prince of the Pit." Prince of the trading pit.

The biggest difference between Dennis and other floor traders was this: most did day trading, quick in and quick out, earning small spreads. Dennis did not. He held positions, sometimes for a long time, riding out short-term fluctuations, capturing long-term trends. He also kept adding to positions—the stronger the trend, the heavier he bet.

In markets with clear trends, this method was a money-printing machine. In markets without trends, it was a paper-shredding machine. Dennis could absorb the latter. He had experienced a day when he lost a quarter of his wealth and needed three days to recover. But he recovered, and then he continued.

One detail is important: Dennis studied philosophy at DePaul University. He earned his bachelor's degree and even received a graduate fellowship in philosophy from Tulane University. But he gave it up and went back to trading.

There's a difference between someone trained in philosophy trading and someone trained in finance trading. The finance person asks "how do I make money?" The philosophy person asks "what is the nature of trading?" Dennis carried a bigger question in his mind.

That question became a wager in the early eighties.

Dennis had a friend and partner named William Eckhardt. Eckhardt was also a trader and very successful. The two of them had a long disagreement about one thing: is trading ability innate or can it be taught?

Eckhardt believed it was innate. Some people just have the instinct, the nerve, the feel. You cannot teach it.

Dennis believed it could be taught. Trading was not art but technique. It could be broken down into a set of rules, the rules could be transmitted, and anyone with discipline could execute them.

This was not just a debate about trading. It was a debate about humanity. What is ability? Where does it live? In genes, in experience, or in a set of rules that can be written on paper?

Dennis decided to let facts speak. He said: I can breed a group of traders the way Singapore breeds turtles.

That's how the name "Turtles" came about.

In late 1983, Dennis ran an ad in the Wall Street Journal. Thousands of applications came in. He and Eckhardt selected fourteen people. These fourteen came from all backgrounds: professional blackjack players, game designers, accountants, ordinary people who were nothing in particular. The vast majority had no trading experience whatsoever.

Dennis spent two weeks teaching them. Just two weeks.

What he taught was a complete trend-following system: which markets to trade, how to identify entry points, how to identify exit points, how to set stops, how to adjust position size based on volatility, how to add to positions. Every step had explicit rules, no judgment required, no intuition needed, no "feel."

Then Dennis gave each of them an account with his own money. The amounts ranged from 250,000 to two million dollars.

He put a group of people who had never traded, using his money, following his rules, into the real market.

The results were astounding. Over five years, this group of "Turtles" collectively made 175 million dollars. Annualized compound return around eighty percent. The best performer was a nineteen-year-old named Curtis Faith, who later wrote a book documenting the whole process.

Dennis won the wager. Trading can be taught. Rules can be transmitted. Ordinary people can become money-making traders.

It was one of the most famous experiments in financial history. Several books were written about it, countless articles, and people still discuss it today. If the story had ended there, it would have been a perfect case study in "the power of systems."

But the story did not end there.

October 19, 1987. Black Monday. The Dow fell 22.6 percent in a single day. Global financial markets suffered cascading collapse.

Dennis lost about ten million dollars that day. Over the following months he lost forty million more. He was managing two funds for external clients, with combined assets of about 115 million, and by early 1988 they had lost more than half.

In the spring of 1988, Dennis stopped trading these two funds. Then he announced his retirement.

At thirty-nine years old.

A man who started with four hundred dollars and made one hundred million in a decade. A man who proved that "anyone can learn to trade." A man who had just won the most famous bet in financial history. He retired. Because his own system, in the real market, under real pressure, had failed.

It was not that the rules changed. The market changed. The commodity markets of the seventies and early eighties had sustained, clear major trends. In that environment, trend-following systems were nearly unbeatable. But the 1987 crash was not a trend—it was a break. Trend-following systems need trends to make money, need time for trends to develop. When the market falls twenty-two percent in a single day, your stop losses cannot execute, your rules cannot react.

Later, someone backtested the Turtle system. After 1986, the system's returns collapsed sharply. From 1996 to 2009, it was nearly flat. No profit, no loss.

Dennis tried a comeback in the mid-nineties. He opened a new fund, used a similar method. After the internet bubble burst in 2000, he lost again. This time he closed all his funds permanently.

Richard Dennis stopped managing money for others. He turned to politics and philanthropy, supported libertarian causes, pushed for drug-legalization reform, served as a director at the Cato Institute.

Some of the Turtles did well. Jerry Parker founded Chesapeake Capital and ran a trend-following fund for decades. Several other Turtles also started successful investment companies. But the methods they used were no longer exactly what Dennis had taught. They modified and evolved Dennis' original system.

This is the place in the entire story most worth pausing to consider.

Dennis' wager was: trading can be taught. He won. The Turtles made 175 million. But the second half of the story says something else: rules can be transmitted, but the conditions under which rules are effective cannot be written into the rules.

Dennis' system was a set of instructions on "how to do things." When to buy, when to sell, how big the position, where the stop. These things are definite, can be written on paper. But there is one more important question that his rules could not cover and could never cover: under what conditions are these rules effective?

Trend-following is effective in markets that have trends. This statement is tautological. The real question is: how do you know when a trend will disappear? How do you know when the market's underlying structure will change? How do you know when the world your rules depend upon is no longer that world?

These questions have no rule to answer them.

Dennis proved that rules can be transmitted. But his own life proved something else: rules are not the same as the ability to "know when rules don't work." The former can be written on paper; the latter can only grow within a person.

The most successful Turtles were not those who executed Dennis' rules most strictly. Quite the opposite—they were those who constantly modified and evolved his original rules. Jerry Parker has been at it for decades; his system is nothing like what Dennis taught in 1984. But the starting point Dennis gave him, that fundamental insight of "markets have trends, follow the trends," remains.

Rules are dead. Insights are alive. Dennis transmitted rules and insights. But he may not have transmitted the third thing: knowing when to abandon the rules, return to the insight itself, and begin again.

Some Turtles learned this. Dennis himself did not.

This is a quieter tragedy than Guan's or Leeson's. No blow-up, no prison, no suicide. Just a man who once turned four hundred dollars into one hundred million, who once proved that "anyone can learn to trade," who when his greatest insight began to fail found no next insight.

Eckhardt had said back then: trading is innate, it cannot be taught. Dennis' Turtle experiment refuted him. But looking back thirty years later, perhaps Eckhardt was half right. The teachable part, Dennis taught very well. The unteachable part, Dennis himself did not possess.

What is this "unteachable part" exactly? Perhaps it is not talent, not intuition, not nerve. Perhaps it is something simpler and harder: admitting that your system is not all of the world. Admitting that beyond rules are more rules. Admitting that what you see, no matter how profound, is seen only from one angle.

Guan left no room for the policy variable. Leeson left no room for the fact that "I can make mistakes." Dennis left no room for "the market might become a different market."

Three people, three different omissions. But they have the same shape.

In the next essay, we look at an even more extreme story. A man who spent years building an entire complete trading theory system on a blog, so precise that countless people still follow it today. Then at age forty-two he left this world. The system lived on. The man did not. His name was Li Biao, internet handle "Chan Zhong Shuo Chan" (the obsessive trader).