The more trading research and reading I do, the more I have respect for the great traders of previous generations. I also realize that even though markets are dynamic, they really don’t change. Many commodity traders and system developers are constantly changing their indicators and developing new systems to keep pace with the market. The problem is that many of these traders don’t really understand the markets and they are just chasing their tales.
William Dunnigan, along with many great early market technicians, did not have the luxury of simply plugging variables into a computer to see if they spit out a profitable system. Instead, he had to “read” the market and interpret on the charts when the market was prone to move higher or lower. He had no trendy indicators to use – just basic charts.
Through all of his extensive research by hand, Dunnigan created the Gains in Grains trading system in 1956 and this was later refined into the One-Way Formula. This book covers both systems in detail.
The two features that makes Dunnigan’s works a must read is that the systems can be applied to any actively traded market and they have stood the test of time. Professional traders still use the One-Way Formula today and will most likely use it another 50 years from now.
After reading this book, I see a lot of resemblance and overlap with trading strategies from some other author/traders I respect. The funny thing is that Dunnigan’s work certainly came out far earlier and I don’t recall any credit given to him. It is amazing how many of the trading methods from great traders many decades ago are repackaged by today’s trading “gurus.”
New Blueprints for Gains in Stocks and Grains and One-Way Formula for Trading in Stocks and Commodities will give you a complete trading methodology with entry signal, profit objectives and risk control. You can use the system for any of the actively traded commodities. Remember this book was written 50 plus years ago and the grain commodities move a little more the charts show from the 1950s.
It may take some re-reading of the strategies before you completely understand them. Once you do understand the methodology, you will have a mechanical system to trade the markets and you will also be able to read charts much better.
With all trading strategies, systems and methodologies, I always recommend that you do your research prior to trading. You should have confidence in a system through diligent research and not through blind confidence by taking someone else’s word for it.