Darvas system

galaxy1307 · Newbie Joined: 10 Feb 2011 Posts: 1

Anybody tried the Darvas system? Does it work today? Any Darvs stocks at NYSE or Nasdaq?

technical_trader · Junior Poster Joined: 15 May 2011 Posts: 27 Location: USA

Nicolas Darvas is a famous stock trader and author. He wrote "How I made 2 million in the stock market" and "The Darvas System...". Very easy reads and contain valuable information for any trader. His system is a box model -- which is simple.

(Its very important to remember that he made his money investing 50 years ago...and the market was very different then. We just don't get the 2000% breakout moves anymore...*sigh*.... that made him very wealthy.)

Anyways. The box model is basically find a stock in an uptrend (in an uptrending market) and determine its consolidation ranges. So if you have a $50 stock that is fluctuating between 48 and 51, then you want to buy the stock when it pierces that upper level (it breaks out to a new high). Then if the stock acts correctly, the 51 level will now act as resistance to the stock moving lower. If it does break below that level, he would say sell it immediately and look for another breakout.

As far as working today - it does in the right market conditions. Not every move works, but with some other important properties of a breakout it can be a very profitable trading method.

Hope this helps.

HenryTo · Posted: Fri Feb 18, 2011 1:28 am Post subject:

As far as I know, Darvas implemented his "system" right after the 1957 correction and in the final stages of the June 1949 to February 1966 (or 1968 depending on how you measure it) secular bull market. That is akin to using his "system" in the late 1990s--i.e. when emotions were frothy.

nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

Got an explanatory link? IDK what the heck "Darvas" is ...
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