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analyst75

Bill Dunn: 40 Years of Trading and Still Making New Highs

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WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 21

 

“Trading shares many similarities with another past-time I enjoy: strategy games. I love playing chess, and I think trading and chess require a similar set of characteristics to do well — they require that you act thoughtfully, never impulsively.” - Ron Kapar

 

Name: Bill Dunn

Nationality: American

Occupation: Trader and portfolios manager

Website: Dunncapital.com

 

NO HESITATION FOR HOME RUN

Bill spent his childhood in Kansas City and Southern California. He served 3 years with the U.S. Marine Corps. He got his Bachelor’s Degree in Engineering Physics from the University of Kansas in 1960. Then he obtained a Doctorate in Theoretical Physics from Northwestern University.

 

In the following 2 years, he was a researcher in faculty positions at University of California and Pomona College. He also worked in logistics and operational systems in other areas.

 

In 1974, Bill founded DUNN Capital Management, a Commodity Trading Advisor (CTA) with a long, rich history of experience and performance. Dunncapital.com states that, with 19 partners contributing a combined $137,000, Dr. Bill officially launched his finance career, trading client money in his 100% systematic managed futures strategy. When a trading opportunity presented itself, it was all or nothing, never hesitating to swing for the home run. He traded only 11 markets at that time, being in an uncharted territory at the time and breaking new ground in an undeveloped alternative asset class.

 

The firm has a track record that spans over 30 years and has produced a compounded annual rate of return of 14.2% per annum, after all fees and expenses. Their staff are highly experienced and well-educated.

 

Bill Dunn is now the Chairman Emeritus of DUNN. In January 2010, a business succession plan was put into place that gave Martin H. Bergin partial ownership of the firm. In August 2015, Mr. Bergin became the sole owner of DUNN. This means is Mr. Bergin currently the President and Owner of DUNN.

 

 

What You Need to Know:

1. Bill Dunn is a trend follower. He trades what he sees. The benefit of doing this is clear in his track record.

 

2. Sometimes, he made great profits. Sometimes, he suffered some drawdowns. Such is trading. No matter the level of volatility in his portfolios, he never deviated from his main methodology.

 

3. For Bill, the markets are his real world. He started just like any one of you. He came across a newsletter while still young, and he was hooked. The rest is a story…

 

4. He’s a long-term trader, sometimes holding positions for more than a year. He’s computerized his strategy. At least, his background in scientific research and mathematical analysis both in academia as well as in the defense contracting industry has been applied to trading; and successfully. He himself said: I felt there were very definite economic trends that were established from knowledge and the ability to know what events meant. I was looking for a way to participate in [those] major trends when they occurred, even though they were unexpected.”

 

5. We don’t change our profitable methodologies because of drawdowns. Minor changes might be made to make a good methodology perform better, but that should not interfere with a good trading idea.

 

6. Bill acknowledges that money management is the true survival key; plus trading without a predefined exit strategy is a recipe for disaster.

 

Conclusion: Speculation has to do with the unpredictability of the future. Whatever people do have to do with some of forecast which is inherent in the uncertainties of human acts and actions.

 

This article is ended with a quote from Bill:

 

“We have not made any changes because of a drawdown. While we have made minor changes since the program started trading in 1974, over the course of the years the basic concepts have never changed. The majority of the trading parameters and the buy and sell signals largely have remained the same.”

 

Source: http://www.tallinex.com

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It should be noted that there is significant between ‘trend trading’ and ‘true trend trading’

 

‘Trend trading’ demands periodic tweaks to systems - entries, risk control, etc. - to minimize drawdowns.

 

‘True trend trading’ does not. Sizing is everything and outliers are literally the edge.

 

Hence such a quote from Bill - one of the few profilable ‘true trend traders’ out there - is possible

We have not made any changes because of a drawdown. While we have made minor changes since the program started trading in 1974, over the course of the years the basic concepts have never changed. The majority of the trading parameters and the buy and sell signals largely have remained the same.

 

A successful ‘trend trader’ cannot say that.

 

fwiw Since I’m by nature neither a ‘trend trader’ nor a ‘true trend trader’ it took me a long time to realize these things...and even longer to implement (/automate in my case) both ways properly.

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