He also developed the trend timing method of futures investing and introduced the mutual fund concept to the field of money management.

Donchian's parents were Armenian immigrants from Western Armenia, which was controlled by the Ottoman Empire in the 1880s, and had come to settle in the United States.

As a young man Donchian went to school in Connecticut, later graduating from Yale University with a Bachelor of Arts degree in Economics.

During the summer of 1933 he became an account executive and securities analyst with Hemphill, Noyes and Co, while still working as the Vice President of the Samuel Rug Company.

Donchian would remain with Hayden Stone's various successors, including Shearson/American Express, and later joined Shearson Lehman Brothers, eventually becoming Vice President of the firm.

While working at Shearson Lehman Brothers, Donchian developed the technical analysis and trend-following strategies that are the fundamental components of many traders' systems today.

The Richard Davoud Donchian Foundation was established after his death in April 1993; its aim is to make improvements in children's health and to help its ultimate recipients become empowered to strengthen and build up their families and communities – passing onto others that which was given to them.