Richard Donchian

Richard Donchian began trading commodities after reading Edwin Lefèvre's "Reminiscences of a Stock Operator" as a young man. He spent years developing a systematic approach to commodity trading and in 1949 managed the first publicly offered commodity trading fund, establishing the managed futures industry. He developed the Donchian Channel — a trend-following system that buys when prices break above the highest high of the past N periods and sells when prices break below the lowest low. His "4-week rule" — buying when prices make a 4-week high and selling at a 4-week low — is one of the simplest and most historically robust trend-following systems ever developed. Donchian worked at Hayden Stone and was a towering influence on a generation of systematic traders including Ed Seykota, who credits Donchian with inspiring his systematic approach, and Richard Dennis, whose Turtle system drew on breakout principles. The Managed Futures Association awards an annual "Richard Donchian Award" in his memory. Donchian continued trading and publishing market letters into his 90s, making him one of the oldest active traders in market history. He passed away in 1993 at age 87.