Nicolas Darvas System | Darvas Box Trading

About Nicolas Darvas (or Nicholas Darvas)

2007-11-03T06:19:00.000-07:00

So, who is Nicolas Darvas and what did he do that was so special that we felt compelled to create a website about him?

Let me tell you a little bit about this man and why he had such an impact. It’s truly an inspiring story...

Before Darvas came to America, he studied economics at the University of Budapest.

During World War II, he fled Hungary for Turkey. Until 1951, when he emigrated to the United States, he trained with his half sister, Julia, to be a ballroom dancer.

Over the next few years, Darvas and Julia became the highest paid ballroom dancing pair in the United States. The pair became so successful that by 1956 they were touring the world.

While on tour a Toronto nightclub owner could not pay Darvas in cash, so he paid him with three thousand shares of a Canadian mining company called Brilund. Almost two months later, the stock tripled and Darvas made a tidy profit.

Nicolas Darvas was a world famous American dancer back in the mid 1900’s. After making a profit in some stock of a Canadian mining firm (which he bought from the proprietors of a Canadian dance venue), Darvas was hooked on chasing a quick buck in the Stock Market.

Like many before him, Darvas was convinced that having made an initial profit, he was some kind of natural born stock market speculator. However (again like many before him) Darvas took loss after loss on the Canadian stock market after buying in and out of the market on the advice of brokers and newsletters.

Telling himself that the Canadian Stock Market was for small fry, he changed course for the New York Stock Exchange. Here (again) he took loss after loss, buying in and out of the market on the advice of brokers and newsletters. Always seemingly buying at the high - then witnessing a sharp retracement - and selling at the low.

Sick of buying on the high and selling on the low, and in a fit of desperation, Darvas ploughed his money into a couple of stocks that that had been hitting their 52-week high. He was utterly surprised that the stocks continued to rise and subsequently sold them to make a rare profit.

Nicolas Darvas decided to regroup to assess this remarkable occurrence. And it was here that Darvas came up with his plan for trading stocks that was to see him achieve a multi million dollar fortune in just a couple of years.

From now on Darvas would execute his famous trading plan. Selecting stocks with new 52-week highs and suitable spikes in volume coupled with favourable fundamental company research.

This method also showed Darvas remarkable insights into a stocks price behaviour, often revealing the signs of ‘inside buying’ before a companies release of favourable news to the public.

After accumulating his fortune, and also being exposed in Time magazine, Darvas was to document his actions in the book How I Made $2,000,000 in the Stock Market, which of course, is well worth a read if you too are interested in learning more about his techniques.

What Are The Darvas Boxes?

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The Nicolas Darvas story is unique in that there is no mystery to how he made his fortune. Unlike other theories put forward by so-called market gurus there is no need to spend years unravelling the mystery of Darvas. You can trade like Darvas today! Simple, practical and logical is the best way to describe “The Darvas Box Theory”.

Darvas Boxes are simply a time in a stocks trading lifetime when they have retraced from a new high back down to a level of support that is not too far in price and time from its recent high.

However, what must be taken into account is that the new high must be a significant new high. By this we mean that the stock has broken away from an established sideways trading range and by undergoing a defined time of increased buying, that can be seen by and increase in the stocks volume, has reached a new high for the last year (365 days).

Once this stage of increased buying has taken the stock to it’s new high, selling will start by traders and institutions who wish to take a short term profit, and the price of the stock will start to fall. This is an important time in recognizing the formation of the Darvas Box.

If the price falls to far and maybe looks like it could return to its initial trading range then a false breakout has occurred and there is no Darvas Box. However, if the stock stops falling after 3 days, then the lowest trading price should be noted and marked as the bottom of the Darvas Box and the recent high should be noted as the top of the Darvas Box.

How I Made $2,000,000 In The Stock Market

2007-11-03T06:16:00.001-07:00

Nicolas Darvas wrote How I Made $2,000,000 in the Stock Market in 1960, shortly after he had made over $2,000,000 trading stocks in a little over 18 months. But the story starts in 1952, when Darvas, a ballroom dancer by profession, acquired his first stock in a Canadian mining company almost inadvertently.

He sold it at a profit, and he was hooked. But Darvas knew nothing about the stock market. He learned everything the hard way, and that's what makes this book interesting. Darvas is a colorful, overbearing, but frank character, and he takes us through his quest to figure out how to make money in the stock market step by painful step.

How I Made $2,000,000 in the Stock Market is a first hand account of how Nicolas Darvas made $2,000,000 dollars in the stock market in the space of about 2 years.

Nicolas Darvas chronicles how he got involved in stock trading from losing money on rumours and bad advice to the formulation of his famous Darvas Box Theory and the accumulation of more than $2,000,000 in less than two years.

Darvas tells how he patiently stalked the stock market for stocks that triggered his buying conditions. And, how once a stock was bought it would be sold automatically by a stop loss or kept no matter what until it changed direction or stabalized for some time.

Probably the most valuble lesson the trader can take from this book is the importance of a Trading Plan. The reader is told how Darvas formulated his theories, observations and lessons from his losses into a concrete Trading Plan and how he carried it out - sometimes waiting weeks for the right trade. Also, using the plan to resist the temptation of profit taking early and missing out on large winnings.

Another lesson the trader can learn from Nicolas Darvas is how crucial it is to learn from mistakes and to use these lessons to shape your goals to achieve success.

The book itself is an extremely easy read. Don’t be put of by the somewhat cheesy title either. Even if you do not trade the book would be entertaining, and if you do, it would possibly be the cheapest $10 of advice you could receive about this business.

* Get The Nicolas Darvas's How I Made $2,000,000 in the Stock Market Now!

The Darvas Boxes Trading

2007-11-03T06:11:00.000-07:00

Nicolas Darvas Trading System

2007-11-03T06:09:00.000-07:00