The father of trend following. The original trend spotter so to speak. Personally, Richard Donchians story personifies patience and perseverance. He achieved legendary status in the world of financial trading but he didn’t become a successful trend follower until he was in his mid 60s and kept making millions well into this 90s. Here is an excerpt from a great article about him and his life.
After 42 years, Donchian was still managing only $200,000, despite his detailed graphs of price charts for stocks and commodities. Then, in his mid- 60s, everything came together, and a decade later, he was managing $27 million at Shearson American Express making $1 million a year in fees and commissions and another million in trading profits on his own money. Mid-60s?
The below quote from him simply summarises everything you need to learn from him. Even if this is the only thing you read on him, following this one quote will be enough to be a successful trend spotter.
“It doesn’t matter if you’re trading stocks or soybeans. Trading is trading, and the name of the game is increasing your wealth. A traders job description is stunningly simple: Don’t lose money. This is of utmost importance to new traders, who are often told do your research. This is good advice, but should be considered carefully. Research alone wont ensure a profit, and at the end of the day, your main goal should be to make money, not to get an A in How to Read a Balance Sheet.”