Charles Drummond

Charles Drummond was born and raised in Ontario, Canada. As a young man he enjoyed studying literature and geometry in school. His market experiences started in a conventional way with various experiments in buying stocks and commodities. He lost money on penny stocks, he lost money on futures contracts, he lost money following broker recommendations. After these losing experiments, he decided that if he was going to lose money, it would be in his own way, and not following the recommendations of others, and began his serious study of the markets.

During the 60s and early 70s, as he was trading in a variety of markets, Drummond developed the basics of his market theory, and published these findings privately in a series of books, starting in the late 70s. During the 90s he has continued to add to his theories and develop new insights and has published a number of significant enhancements.

Drummond has always had a small group of private students and his theories have been taught by several market technicians.

However, Drummond himself has always preferred to maintain a low profile and generally eschews publicity and public exposure of any kind. His students have all been bound by non-disclosure agreements, and by an understanding that they were privy to a rather special set of information that is worth holding closely. Thus most of Drummond’s insights have remained in private hands and have not been widely distributed. In this current electronic format the lessons will be more accessible, but they will still be carefully controlled.

If you enroll as a student and undertake to complete these lessons, you will join this small elite group, and you also will sign a non-disclosure form covering the contents of these lessons, and the books and materials which accompany them. We ask that you “keep the faith” and abide by both the spirit and letter of this agreement. Little can be gained by the participants if this information is available on every street corner and used by every market participant.

“Charlie” currently lives in Eastern Canada where he trades every day, raises prize game birds and hogs, and maintains an organic vegetable farm.
Drummond Geometry and the Pldot: An Introduction to the Fundamentals
By Ted Hearne

What is Drummond Geometry?

It is a unique form of market analysis developed over a thirty-year period by the legendary Canadian trader Charles Drummond.

Drummond Geometry is both a trend-following and a congestion-action methodology. It leads rather than lags the market, and uses projected charts to map future market activity. It foretells the most likely scenario that shows the highest probability of occurring in the immediate future and can be custom fitted to one’s personality and trading style.

Drummond is now in his early sixties, currently living on the East Coast of Canada. He spent most of his career in Toronto where he traded a wide range of markets and for a time ran a trading company.

Charlie is a unique sort of guy, and as he first approached the markets he found the traditional methods of analysis inadequate and frustrating. His early experiences were characteristic: he lost money and got a lot of bad advice about what to do next. After spending some time losing money in the conventional ways, he made a key career decision: if he was going to lose money, he would at least lose money in his own way, and not follow the advice of the existing conventional wisdom. In short, he determined to develop his own methodology, and not rely on what others had done.

This began a remarkable career of quiet innovation and trading success that ultimately led to the creation of a complete, coherent, and unique method of technical analysis that today is known as “Drummond Geometry.” The methodology has stimulated great interest among those who have studied it and Drummond has a devoted band of followers. Traders around the world have been using these techniques for many years.

As his trading career progressed, Drummond experienced very significant financial success. The exact dimensions of his trading accomplishments remain his personal business but it is safe to say that his winnings place him among the great “supertraders” of the 20th century. Today Charlie lives in semi-retirement and is happily engaged in organic farming, trading, and working with this author on a series of Lessons that summarize his methodology and teach traders how to apply his insights.

The key elements of Drummond Geometry include a combination of the following three basic categories of trading tools and techniques:

• A series of short-term moving averages
• Short-term trend lines
• Multiple time-period overlays

Many of the fundamental concepts of this methodology are simple in nature, but have been worked out to a high degree of sophistication. In this introduction, we will look at the PLdot, the first major building block of Drummond Geometry. PL stands for Point and Line, two of the main techniques of Drummond Geometry.

Summary and conclusion

Traders who analyze support and resistance will have much greater success if they coordinate these support and resistance levels on several time periods. Daily resistance sold in the area of weekly and/or monthly resistance has up to three times the likelihood of being strong and holding than does daily resistance taken in places where it exists by itself. The determination of whether or not resistance is strong or weak can be seen at the earliest by monitoring the trade on a timeframe that is lower than the timeframe in which the trade is taken. A trader who understands the context of a market will always be better off than one who trades by looking only at a single timeframe. Drummond Geometry offers a comprehensive methodology of establishing support and resistance areas in multiple timeframes, and then coordinating their locations to determine their strength or weakness.

Ted Hearne is a Chicago-based trader. The material in these articles is adapted from the 30 Lessons of the P&L School of Drummond Geometry (Copyright © 1999 Ted Hearne and Charles Drummond). Contact Hearne via the websites www.tedtick.com and www.pldot.com.

Bibliography

Books and publications by Charles Drummond

* How to Make Money in the Futures Market…and lots of it! by Charles Drummond.
1978, 575 Pages. Drummond Publications.
* Charles Drummond on Advanced P&L, by Charles Drummond. 1980, 547 pages. Drummond Publications.
* The P&L Labs, by Charles Drummond. 1981, 260 pages. Drummond Publications.
* The 1-1 Paper, by Charles Drummond. 1985, 277 pages. Drummond Publications.
* The Energy Paper, by Charles Drummond. 1991, 18 pages, Drummond Publications.
* P&L Accumulation/Distribution: Knowing When to Trade, by Charles Drummond. 1993, 185 pages. Drummond Publications.

Knowing Where the Energy is Coming From, by Charles Drummond. 1995, 190 pages. Drummond Publications.
* Pattern Picking, by Charles Drummond. 1996, 22 pages. Drummond Publications.
* Predicting Next Week’s Range (& understanding how the daily plays it out), by Charles Drummond. 1996, 62 pages.
* Psycho Paper ‘96: P&L’s Connection with Awareness, by Charles Drummond. 1996, 160 pages. Drummond Publications.
* The Lessons, a series of 30 multi-media lessons, by Charles Drummond and Ted Hearne, 1997-1999. Drummond and Hearne publications.

Drummond Publications may be ordered through www.PLdot.com or www.tedtick.com.