Managed-futures pioneer and trend-following analyst
Richard Donchian
Richard Donchian (1905–1993) was an American commodities trader and analyst with an economics degree from Yale. In 1949 he started Futures, Inc., described by CME Group as the first publicly managed futures fund, and in 1960 became director of commodity research at Hayden Stone, later working at Shearson. From 1960 to 1979 he wrote the weekly Commodity Trend Timing newsletter, built on moving-average trend rules.
What they argue
- Commodities can be traded with systematic, rule-based trend following rather than discretionary forecasts.
- Trend signals can come from moving-average crossovers (his newsletter used 5- and 20-day averages) or from price breaking out of its recent high-low range, the basis of the channel later named after him.
- Limit losses and let profits run, whatever other rules say (one of the trading guidelines attributed to him).
Sources
Summaries are Be The Puck's paraphrase of public material. Be The Puck has no affiliation with the people listed.
Donchian's four-week rule
Rule and full recordBreakouts & channels · daily
Buy when price closes above its highest high of the last four weeks; sell when it closes below the lowest low.
Best risk-adjusted results against buy and hold: