Darvas Box Technique

Darvas Box Tecnique

Hello!

I have just read Nicolas Darvas 'How I made $2000000 in the stock market'. It has been a riveting book and sounds like an excellent system. I am very interested in his box theory which seems to make a lot of sense and I would like to incorporate it in my very new and basic trading system

The problem is that I don't understand how to work out where the top and the bottom of a box will be - which is a rather fundermental problem!

If anyone could explain I would be really grateful

Thanks

Gordon 8-

i must say i have seen the book advertised and it was mentioned by someone that i know ( Richard Von Goetzen) as he was a friend of his-

I am assuming he is talking about stocks ? US ones ??

There is some info here:-

http://www.elitetrader.com/vb/showthread.php?threadid=22109&perpage=6&pagenumber=1

Thanks - Thats very helpful.

And yes the book is talking about American stocks although I am going to try to use it for UK stocks

Alexandra x

Gordon8

a technical definition to help you with the box system

A) assume the top of the box will always be just out of reach

B) assume the bottom of the box will be falling away taking you with it

my extensive and very helpful book on this subject will be for sale for a very reasonable $9.99 and will make you millions and millions from just putting the book on your keyboard and going off and having a coffee - yes, its that good - i have a letter from my fellow floor cleaner at McDonalds and my girlfriend to prove it - and of course i will be doing a one day training course for $1,000,000 - great great value and i promise u - i have a great voice and i am a wonderful human being - honestly - god - that course is so so good - i am going to sign up myself - now where's my special white coat with those nice belts - yes - i am ready - take me away

Stevet

They are coming to take you away

Ho Ho

He He

They are coming to take you away

dont all get your hopes up!

still here and still ranting!!!

I read Darvas's book light years ago. As I recall he had the good
fortune (superb analytical technique) to get in on the ground floor
of two super growth stocks - Xerox or Polaroid and the company
than invented filter tipped cigarettes, if the memory cells are still
working, and it was from these that the bulk of his profits came.
Anyone would have made a bob or two with those in their stable
by whatever system.

I spent a few years looking for box type action in more ordinary
stocks, mainly to no avail (although there were a few during the
dot com boom - when again any system would have been an
earner while it lasted). Maybe Tesco has performed in a box type
action way over the last few years.

The moral of this story - first find your super growth stocks (ho,
ho)

good trading

Crikey !!

Me thinks that I ought to get a little experience of trading before I start using fancy systems!

I am going to stop reading books for now and just get on with it. Problem is I am now hooked on trading books - its the most inspiring, interesting and 'lalalaa' part of spreadtrading I have come across so far!

Instead I will read the directions on how to use the most 'beginner unfriendly' deal4free SB interface (All those horrid flashing lights and clutter!) and make a few trades. - I've got to start somewhere but it is terrifying.

I was with Tradindex but they will not do guaranteed stops, which are definitely essential for me. Finspreads looks interesting but I feel like I am flitting from one SB to another so will master deal 4 free which apparently is good on spreads.

p.s. I can't wait to get to the stage when I am a cynical but experienced (but successful!) trader like you lot!

It seems I have everything to learn

Watch this space!

Gordon8

nothing wrong with reading a few books, as we should all be constantly learning, humble & open to ideas.

I have to admit I have only read one full trading book & never regretted it, what this did was give me a grounding & system, though simple, to follow to at least make my first trades..........I will never forget that first 146 points.....probably luck some of it, but that was my first step on a long road & for that I am eternally grateful to it.

It gave me a start that I needed.

nothing will teach u as well as 'doing', but if u can glean some info from others, try to sort the good from bad without costing u too much, then where is the harm.

if u find a system that makes sense & seems logical to u...........try it will small stakes as it will at least give u experience, give u something to follow & get u used to your platform

Regards

Jay

Gordon8,

I wouldn't bother with guaranteed stops. They are the spreadbetting equivalent of payment protection insurance on a loan or credit card or extended warranties on TV's. They probably make up the bulk of the firms profits at your expense.

Think about it, the chances of a position gapping wildly against you will happen maybe once, possibly twice a year if your unlucky. In which case with an unprotected stop you might lose as much as 100 points on the dow. The rest of the time you will get filled at your stop price whether it's guaranteed or not. Trade once a day for a year and pay 3 pts extra every time and your looking at paying 750 pts a year to protect against a loss of 100-200 pts at the very most.

D4F

Gordon speaking as someone with a wealth of experience !!!!! . 6 whole months !!!!!!
Dont worry too much and do some trades with D4F. If you are careful and you choose the right instuments that are around the 200pts mark. If they moved 10% in a day which is not too common, then you would only be looking at 20pts loss.
Im not telling you to throw your money away, all im saying is that there is no better way of learing than having a go for real.


Besides , i want to know how you get on ??? :idea:

PS...... dont take my advise , i dont know what im talking about.

Halfbutt

Gordon8,

Here's a site offering Nic Darvas's method combined with a bit of the Turtle Traders thrown in. Someone recently mailed it to me:

<a href="http://www.easy-trader.ch">www.easy-trader.ch</a>

I would imagine any help offered would be a great deal more expensive than the book. But the home page is interesting: there is a testimonial from a gentleman who is a teacher (of spelling?) who "heard from Nicolas Darvas and his extraordinary method" (possibly from beyond the grave, which impresses me). But at my level of inexperience I'm easily impressed. First time posting in the winners den too. Hope you've all eaten!

Thanks everyone x

I will keep trying to figure out D4F and early next week I intend to start trading again

To be honest - I feel quite overwhelmemed at the moment. There is so much information to absorb and to try to make sense of - I feel that I have a hell of way to go before I can even start properly!

It may be an excuse because I had a small bad run of trades (I know that this is normal and I didn't lose much apart from confidence) but I do think that I need to be more confident about the trades that I am making or else it is just plain gambling, without an 'edge', which doesn't suit me

Rather than flitting from one idea / system to another, I need to decide my beginning strategy and stick to it for a while.

Definitely time to consolidate what I do know and then jump fearlessly back into the water and have some fun!

I will keep you all posted

p.s. Glad there are some other beginners out there - Please let me know how you are all getting on

Gordon8
''Rather than flitting from one idea / system to another, I need to decide my beginning strategy and stick to it for a while.''

good plan.

someone who mentored me asked me this question, it helped me no-end : '' imagine yourself in a room with a group of experienced traders, who r trying to pick whole's in your methods.....could u confidently defend your strategy & explain your logic behind your trades??.

this made me really understand just what I was doing, & when I could answer 'yes ' to myself.........my confidence grew no-end.

This probably seems obvious but it really can make the difference, it is a bit like swimming.........it is only lack of confidence & the fear that stops some people.

stick to one plan that sits comfortable with u, understand the logic behind it & apply.....your strategy may need re-adjusting along the way, as it develops into your own.

I tended to flit form one idea to another for a long, long time. & though I was learning, I had no confidence in 1 thing & just led to the ''paralysis of analysis'' & this is hard to break away from.

anyway hope this helps some

Jay

JayGee

Thanks - that does help me and your term of ''paralysis of analysis'' is exactly what I am suffering from!

It is comforting to know that other people have been through the same thing as me - It gives me hope that I may actually develop intro a half decent trader. I am under no illusion now that it will be tomorrow though!

Thanks again x

Gordon8

I would like to find a humble& honest trader who hasn't at some point.

keep that hope, trust your own instincts, don't be afraid to ask anything! & stick with it......u will get there

Jay

Gordon8.

Do stick with the books. Read as much as you can, just stay away from hyped up courses and seminars which are really just a very expensive way of getting the same info that you can get from books/ the internet.

I read books and followed a variety of different markets for about a year before I even placed a trade. I then placed a few naive trades and inevitably lost a few hundred quid pretty quickly. I then read more and tried to start devising a system, learning about money management and how a proper trader trades.

About a year ago, I though I had it sussed, I had a trading system, i knew the market I was going to trade. I opened an account and then like you, found it very scary to place trades.
As a result, I didn't follow my system properly and didn't have much success. I flitted around different markets, trying a trade here and a trade there. My starting capital fluctuated between breakeven and about -10%.

Then a couple of months ago, something switched on, I developed a proper trading plan, decided exactly the market I would apply it to, position size, entries, exits, profit targets etc.
My "system" is not rocket science and I will continue to develop it, but I'm sticking to it and yes, I'm profitable (so far).
I still consider myself a beginner as I'm really only just at the start of what I hope continues to be successful/ profitable trading from now on.

The point I'm trying to make as others have is that you have to find what works for you, develop confidence etc. You will only do that by learning what others do, taking parts of it, trying it out etc. Don't expect to make profits quickly or it just won't happen.
Take time, continue to learn, apply/ try things out. You may find what works for you quite quickly or it may take some time. In the meantime, ensure you keep positions small, follow strict money management to ensure you stay in the game til you find something that works. And when you do, still make sure you continue to do the same. You can still fail if you take too much risk.

Anyway, keep at it. All the best on your journey.

By the way, I'm still reading the books etc and will continue to do so. After all, I'm only a bit further along the road than you.

excellent advice Darrenf.

I think your journey reflects the journey of most successful traders. You have to find your own way to trade and that takes time and commitment. Most people give up when they lose a few quid and realise that trading isn't the easy get-rich-quick scheme that some 'trainers' would have you believe.

Look at this:

http://www.darvas-investor.de/