salvadorveiga
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reading his book i see he sometimes bought at the support of the boxes, but mainly as you said was when entering a new box to the upside... probably because it was confirmation of trend, new breakout etc... so a more probable positive outcome on the trade
rharmelink
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Depends on who you believe. Supposedly Darvas fled the country when brought up on charges of fraud related to his book.
http://www.traderji.com/technical-a...-2-000-000-stock-market-darvas.html#post63106
Oh no, really Darvas was another con artist selling books, he could not trade to make money?
Has any one else got opinions on this?
barjon
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mmm, Darvas was ok but he was lucky that his method got him into Kent (invented filter tip ciggies) and Polaroid (invented instant photos) just as they took off and zoomed up to the stratosphere. The bulk of his $2m came from them.
Nonetheless, it's a sound enough method but not exceptional imo.
good trading
jon
Nonetheless, it's a sound enough method but not exceptional imo.
good trading
jon
Oh no, really Darvas was another con artist selling books, he could not trade to make money?
Has any one else got opinions on this?
I picked up a copy of Darvas' book on the street for $1 and fell in love with the book immediately. I normally recommend 3 necessary books for my friend, and Darvas' book is always the second on the list, for this book I always tell my friends: It's easy to learn and understand but not many people practice it.
Did people add to their holdings when prices broke to a new level. Yes, my former boss who bought a stock that I had bought for myself and recommended to him. He started out with 1,000 shares and kept adding to the position when the prices get to new number. He started selling at mid-teens and made very good money.
I got out of the deal a few week after the purchase since I'm more of a position trader than he.
Darvas never mentioned in his book about contrarian investing but what he does is so different with the normal thinking. To do well in the stock market you have to practice something that is so different than the normal thinking of your daily life such as: Buy high, sell higher instead of buy high, sell low. The first thing you have to take care with the stock market is protect yourself from loss, winning comes second. Everyone with a few dollars in the market read books, a lot of books but they only read what they understand and want to see. When you read Peter Lynch's One Up on Wall Street, did you see and make yourself aware of his contrarian investing, when Warren Buffett bought share of Goldman Sachs, did you realize that it was the worse time of the banking business, but that how he could do well.
I prepare a little presentation for my lerning program, the first 2 pages cover the main ideas of Darvas on trade with the box, and stop loss - somehow!
A Short Presentation on Technical Analysis
Notes: I first started this presentation in May 2009 at the suggestion of my co-worker, and it has become a learning program for me with other acquaintances who want to be in the project. Please do not consider the examples provided as recommendations for selling or buying securities
Prepared by songcon
October 2009
PART A: BUY A STRONG STOCK AND LET IT GROW OR SELL AND PRESERVE THE CAPITAL
A1: USE CHARTS TO SELECT STRONG STOCK AND OBSERVE THE 50-SMA RULE TO WATCH THE CAPITAL GAIN KEEPS GROWING:
Chart A1: MSTR 6-month daily chart with 50-SMA (Simple Moving Average)
To use 50-SMA crossing as a buy or sell signal would help investors greatly especially in dealing with stocks that have high RSI.
Investors who purchased MSTR on the crossing of the beginning of Apr. 2009 and kept on riding the gain all the way since
there was no appearance of sell signal . More than 75% gain on this purchase
A2: USE THE VERY BASIC TECHNICAL TOOL TO HELP TRADERS TO GET OUT OF THE POSITION AND STAY PUT UNTIL REVERSION SIGNAL APPEARED:
Buy when the stock crosses the 50-day SMA (Simple Moving Average) and sell (and stay put) when it crosses into the other direction
Chart A2: TASR 5-yr weekly chart with 20-EMA (Exponential Moving Average)
Selling on signals to protect loss. Investors who observed the crossing over of the 20-EMA as a sell signal would minimize the loss when TASR price crossed the 20-EMA at $23. Assume that the investor placed the sell order @ $22/share in Jan. 2005 and stayed on the sideline until early Nov 2005 when there was a buy signal when the price crossed the 20-EMA @ $8. Protection from a $14 per share loss. The sell signal through the crossing down in Jan 2008 from $14+ to save the continuing drop in price to $7 in early Aug 2008 when the signal reversed also saved the investor a great deal for staying out of the down-fall of the stock
metalhead0
Newbie
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I picked up a copy of Darvas' book on the street for $1 and fell in love with the book immediately. I normally recommend 3 necessary books for my friend, and Darvas' book is always the second on the list, for this book I always tell my friends: It's easy to learn and understand but not many people practice it.
Did people add to their holdings when prices broke to a new level. Yes, my former boss who bought a stock that I had bought for myself and recommended to him. He started out with 1,000 shares and kept adding to the position when the prices get to new number. He started selling at mid-teens and made very good money.
I got out of the deal a few week after the purchase since I'm more of a position trader than he.
Darvas never mentioned in his book about contrarian investing but what he does is so different with the normal thinking. To do well in the stock market you have to practice something that is so different than the normal thinking of your daily life such as: Buy high, sell higher instead of buy high, sell low. The first thing you have to take care with the stock market is protect yourself from loss, winning comes second. Everyone with a few dollars in the market read books, a lot of books but they only read what they understand and want to see. When you read Peter Lynch's One Up on Wall Street, did you see and make yourself aware of his contrarian investing, when Warren Buffett bought share of Goldman Sachs, did you realize that it was the worse time of the banking business, but that how he could do well.
I prepare a little presentation for my lerning program, the first 2 pages cover the main ideas of Darvas on trade with the box, and stop loss - somehow!
A Short Presentation on Technical Analysis
Notes: I first started this presentation in May 2009 at the suggestion of my co-worker, and it has become a learning program for me with other acquaintances who want to be in the project. Please do not consider the examples provided as recommendations for selling or buying securities
Prepared by songcon
October 2009
PART A: BUY A STRONG STOCK AND LET IT GROW OR SELL AND PRESERVE THE CAPITAL
A1: USE CHARTS TO SELECT STRONG STOCK AND OBSERVE THE 50-SMA RULE TO WATCH THE CAPITAL GAIN KEEPS GROWING:
Chart A1: MSTR 6-month daily chart with 50-SMA (Simple Moving Average)
To use 50-SMA crossing as a buy or sell signal would help investors greatly especially in dealing with stocks that have high RSI.
Investors who purchased MSTR on the crossing of the beginning of Apr. 2009 and kept on riding the gain all the way since
there was no appearance of sell signal . More than 75% gain on this purchase
A2: USE THE VERY BASIC TECHNICAL TOOL TO HELP TRADERS TO GET OUT OF THE POSITION AND STAY PUT UNTIL REVERSION SIGNAL APPEARED:
Buy when the stock crosses the 50-day SMA (Simple Moving Average) and sell (and stay put) when it crosses into the other direction
Chart A2: TASR 5-yr weekly chart with 20-EMA (Exponential Moving Average)
Selling on signals to protect loss. Investors who observed the crossing over of the 20-EMA as a sell signal would minimize the loss when TASR price crossed the 20-EMA at $23. Assume that the investor placed the sell order @ $22/share in Jan. 2005 and stayed on the sideline until early Nov 2005 when there was a buy signal when the price crossed the 20-EMA @ $8. Protection from a $14 per share loss. The sell signal through the crossing down in Jan 2008 from $14+ to save the continuing drop in price to $7 in early Aug 2008 when the signal reversed also saved the investor a great deal for staying out of the down-fall of the stock
I remember when I thought buying/selling on MA crosses would be profitable.
It works brilliantly during trending markets. You will blow your account during choppy markets.
I was never able to come up with a system to tell me if the market was going to be choppy or trendy, so I was never able to use price crossing the MA as a guide. Cheers to you if you can
