“Nobody has ever been able to demonstrate to me that a complex mathematical equation can answer the question: 'Is the market moving in an up trend, downtrend, or sideways?’”
Who he was
Richard Donchian was born in the United States to Armenian parents in 1905. His groundbreaking analysis of commodity trading trends made him a founding father of methods used to this day.
Graduating from Yale University with a degree in economics, Donchian first went into his family’s rug business and traded on the stock market on the side, but lost everything in the crash of 1929. This led him to study price history and trading trends. He continued his career in the financial sector working on Wall Street.
Despite an interruption during World War II, when he joined the military and worked as a statistical officer, he returned to the securities industry and continued to develop his technical trading system. The uniqueness of his system was that it was based on rules and guidelines: it lent discipline to a field known for its erratic and sometimes irrational behavior.
Over his lifetime, he published dozens of articles and founded Futures, Inc., one of the first publicly-held commodity funds. A man ahead of his time, he trained women in his trading methods when doors were closed to women across most of Wall Street. Attesting to the durability and success of his work, many of his principles are still applied today in the field of commodity trading.
Interesting fact
Donchian is nicknamed “The Father of Trend Following.”
Learn more about him