In 1974, Bill Dunn sat down with a yellow legal pad and started writing rules. Not suggestions. Not guidelines. Rules. He was a physicist by training, a gambler by temperament, and he had just watched most traders around him get obliterated by the commodity markets. He decided the problem wasn't the market — it was the humans reacting to it.

The early years were not pretty. Dunn's firm, Dunn Capital Management, launched in 1974 with a systematic trend-following approach. But systematic didn't mean smooth. His flagship programme — WMA — endured drawdowns that would have emptied the bladders of most fund managers. A 50% drawdown in the mid-1970s. Another savage one in the early 1980s. Clients fled. Dunn did not.

CONCEPTTrend following profits from persistence — riding extended price moves across markets by following rules, not feelings.
WARNINGDrawdowns of 30–50% are built into trend-following equity curves — traders who can't stomach this will abandon the strategy at exactly the wrong moment.
KEY IDEADunn's edge wasn't a secret formula — it was the discipline to follow the same rules for three decades without flinching.

What made Dunn genuinely unusual was the combination of volatility and longevity. Most traders who swung as hard as he did eventually blew up. Dunn kept coming back because his system was designed around one core insight: trends exist across all liquid markets, they cannot be predicted in advance, but they can be systematically captured if you stay in the game long enough. The rules stayed constant. The markets changed. The rules held.

Trend Following: Drawdown & Recovery (Illustrative) +100% 0% -50% Y1 Y5 Y10 Y20 Y30 Deep drawdown New highs Equity curve Drawdown zone

The lesson Dunn's career hammers home is one that most retail traders pay for twice — once in losses, once in the education. His story is studied in depth in Jack Schwager's Market Wizards, where the pattern across elite traders is consistent: rules-based trend trading demands that you survive the drawdowns long enough to collect the gains. Proper position sizing — what traders call position sizing — was Dunn's invisible armour through every storm.

Dunn didn't get famous for being right all the time. He got famous for being consistent for thirty years while everyone else was trying to be clever.

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