NICOLAS DARVAS Box Trading Strategy - Darvas Box Method - How I Made 2 Million In The Stock Market
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- čas přidán 28. 06. 2024
- NICOLAS DARVAS - Box Trading Strategy - Darvas Box (How I Made 2 Million In The Stock Market)
Nicolas Darvas was a professional dancer and turned professional trader, trading for a living.
He created a trading strategy known commonly as the Darvas Method or the Darvas Box and made 2 million dollars in the process.
Nicolas Darvas adopted a quite simple strategy based on trend following with a breakout concept. Also incorporating solid risk management to create favourable risk reward.
There are many variations of the strategy which have been tweaked over the years by some of the best stock trading gurus, listed below.
In this video we look at the criteria of the Darvas Box trading method and apply it to more recent times.
Traders now commonly call this trading strategy, breakout trading. One of the few stock trading strategies that work.
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One variation of this box strategy that has consistently worked for me over the years is to NOT buy the new 52 week breakout but rather, wait for the first pullback after the new high to a support area. Nearly every significant breakout inevitably succumbs to profit taking of some sort within some time period. Once the stock proves the support area by having more buyers than sellers, price going back up, enter the stock. This way, you put your stop loss directly underneath that support area which reduces your risk (since you did not enter at the new high). That new high just above is resistance, consider this area as a potential sell point if in a swing trade, or trailing your stop upwards just underneath the break out price in you are trading in a longer time period (position trading).
That's great ! Can you please tell me based on what criteria do you set your trailing stoploss?
Hi Kedar. My stop loss is set according to my position size against my risk reward ratio. So, for example if my risk reward ratio is 1% risk : 1.5% reward (investment is $10,000 so 1% = $100 is the risk and 1.5% = $150 reward) I trail my stop behind the price as the position goes up at 1% or less. Also, I take into account the nearest support price beneath the current price and assess the risk from there. I am very discretionary in my system and prefer to use my judgement rather than rules.@@kedarbikkannavar5907
adding the pullback wait makes excellent sense
A successful variation I've used is waiting after a surprisingly strong earnings announcement b4 scaling into a position using small lots as the price (often) pulls back. Market Makers--in concert with large institutions--will artificially walk a hot stock's price down to accumulate more at a cheaper price. (Before walking it artificially back up to sucker--and sell to--retail buyers at higher levels.) *Always remember: stocks don't simply "move." Rather, stocks ARE moved!*
Love the Pullback entry
the bottom of his boxes were based on 3rd low after the high was reached from the most recent box breakout. he elaborated in his 2nd book
I read this book about 40 years ago and then bought my own copy about 15 years ago. I must have read it at least 10 times and have always managed to extract something new upon each reading. However, you have managed to capture the essence of this great book in just 12 minutes!! My heartiest thanks!! I've similarly enjoyed your summaries of other great investment and trading books. Keep up the good work!!
Wonderful! Thanks Wills🙏
So are you a successful trader at least?
@@Trancer006 he's commenting on CZcams video about teaching a method to trade after 40 years
I mean if you don't have your own style by then I'd say he's not successful for sure
@@osmanosman401 not sure who you're attacking buddy
I traded well on my Demo account but when I invested in to my main account i lost all my funds. Please i need an expert to assist me with my trading. It's frustrating how people loss funds in this trading, I really feel so bad.
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This was EXTREMELY useful video. I’m always scared of buying at the 52-week high. I’ll add this strategy to my arsenal 😃
Thanks The Investment Doctor - Nice channel!
@@theinvestmentdoctor8178 great..
It can be very profitable cause there are no resistance above.
@@shaiketchowdhury9455 bingo
Hope you have made lots of money till the date .
Finding this a year later and sure enough, there were a couple of box breakouts on GENUS, as predicted. Thanks for the video!
A key aspect of a successful trading is an effective trading strategy
It's best for traders to look for trades that have an edge over the market
I have heard much about this Mr Kent and he's amazing strategy. I will be grateful if you can give me a reachable way I can easily talk to him
Wow, who else observed his trading strategies last week was boom. I'm so happy I traded last week
A = THE
SCAMMMMMMMM :)
Thanks for keeping it simple and straight to the point.
Thanks Santosh👍
I read Darvas’s book a couple years ago and it was very interesting. It’s more like a story of his journey to success than a teaching book.
The “box” that he referred in his book was what we call “base area” or the “handle” of “cup and handle” if you are technical.
What fascinated me was that he was able to come up with a successful method on his own after numerous fails.
I have the book. Great . The 52w high is the key. Most miss that point.
Thanks Lou - Absolutely, trading at a 52 week high is against what many people believe, which is often the opposite i.e buy low and sell high.
Thanks
what do you mean by 52w high?
Unfortunately,, that is not the key..
Trading with the trend is the key..
@@raymondphilip6232 couldn’t see the key...what is the key?
I have all of Darvas' books and they are excellent! In a strong bull market his methodology works really well and I have screens I have written to filter out Darvas stock candidates. It is best to start with a "pilot" buy as he recommends and then average up. It works well!
Keep these coming!! Your summaries and explanations are brilliant!!
Glad you like them!
One of the first books I read about investing. Amazing that it can even shift your mindset, and show you what is possible!
That alone is worth the time to read the book!
Thanks Artem🙏
Thank you for such a clear explanation of the content of the book. I like the part where u showed the risk factor determining gambler, novice trader and professional.
Glad it was helpful!👍
The best summary so far. Thank you.
You're very welcome!🙏
i have just discovered your videos. u make great content! keep up the good work! subscribed!
Thanks Peter! - Much appreciated..
I am a trader and dancer myself. I have been using a similar strategy like consolidation breakout for past few years. Glad to hear that such a legend used a similar strategy..
can I ask you what your return % is, winrate and average risk to reward is?
Thank you so much! Such a well-edited video!
Thank you so much too!
Another very clear presentation, many thanks. I really liked the way you extended the boxes once you had identified an initial pattern. This helped me to reinforce the relationships between 52 week highs, resistance lines, support lines and the break outs. I had not established that degree of clarity in my own thinking, to date. Regards Howard
Thanks for your feedback Howard - Much appreciated.
May thanks Gareth. Useful presentation. I liked the analogy with the roulette wheel.
Thanks for your feedback as always William.
More great content, simple and straight to the point......Thank you
Thank you!🙏
Thanks. Your review is good. I read this long back. However, your video renewed and increased my knowledge.
Awesome, thank you!👍
This is the information I have been looking for a very long time, thank you for putting it on the web. I plan on using this information to be a successful stock trader in the future.
Your welcome.. Good luck!
Look for Steven Dux Trading techniques. Perfect strategies. He adapted the box strategy on Daytrading with some other important Criteria
@@smarthelp1641 Have you got a link, I tried to find that video and couldn't find it.
Love your videos man. U deserve more subscribers
Thanks zack!
thanks so much, best explanation Ive found!
You're very welcome!
You explained this so well. Love these videos great channel
Thanks so much!🙏
Thanks for all your work, I watch all ur vids, this was great.
Awesome, thank you!🙏
ANOTHER EXCELLENT VIDEO. THANKS SO MUCH FOR THIS! GONNA BE USING THIS METHOD!
Glad it was helpful!
Great video thanks for sharing! I want to add something! all strategies are really similar with different perspectives. Its all about consolidations and breakouts on volume! I bought a stock with different strategy and after reading Darvas book I realized that is was a breakout from a box! I think charts are simpler than we believe!
Very true!
Great book and great summary. Thanks for all your help!
My pleasure!
The Darvas Box method is briliant. And a great tribute to Jesse Livermore who inspired Darvas. Excellent presentation of the Darvas Method.
Many thanks!
Not important at all. It was simply trend following on great stocks in a bull market.
I really like your excellent reviews I'm just starting my quest into learning about the stock market. Your channel has contributed greatly.
Welcome aboard!🙏
really enjoy your videos. keep uploading. great work , thanks
More to come!
Great video. Method - discipline - patience = high probability!
Thanks Phil 👍
Sideways Consolidation have high odds if they break out of the range. The momentum kicks in. Both sides long or short.
I agree
subscribed! this book is great, I read it many times.
Thanks Robert, welcome aboard!
Good work, well explained, excellent graphics.
Thanks👌
very well presented, you make it easy to understand and add a lot of value.
I appreciate that!
I loved ur explanation ...Great!
Thanks a lot 😊
The real kicker of this method is that Darvas implemented it while he was traveling the world as a professional dancer. He used newspapers/magazines and telegrams to his broker for his orders working from a watchlist. If anything screams patience and longer term its this method since he had lagging data and no hourly, minute or smaller timeframe info. Amazing illustration of following ones rules.
Trading can only take 5 minutes a day.
Great set-up Sir
So well explained … thanks
Subscribed! Thanks for this informative Vid
Awesome, thank you!
Explained amazingly
Superb
Easy to understand even for novices
Thanks nishideep, much appreciated
One of the first stock market books I read. Recommend it to anyone who is thinking of getting into trading.
Good choice
This is great...keep up the good work bud..
Thanks👍
thanks . This was EXTREMELY useful video
Thanks 👍
Great strategy by Darvas and excellent explaining.. thx u so much.
My pleasure!🙏👍
Wonderful video! Thank you!
Glad you liked it!
One of the marvellous implementation of the price action 🎉
Sure is
Thank you for this simple and useful introduction. 🍻
Thanks for watching
EXCELLENT video, thank you for this!
I will be studying this method with historical data of company stock.
Subscribed!
Awesome, thank you!
are there any screeners that alerts the stocks inside the box
I loved that book. bought it twice.
you made it understand the concept in very easy way thanks
You are welcome!🙏
👑🥇👍 In our experience, the Darvas technique is one of the best for novice traders to apply. It has among the highest hit rates in the industry, and it is still works wonderfully in today's financial markets as well! Well done for creating such an informative video to educate the retail investor community! 📯📈💰
what's the winrate of this strategy?
Hai. Iam from indonesia. Iam quite success doing this method. Eventhough iam not really understand how to apply the boxes
But now iam understand..thanks for sharing. Love ur vidoes. 🏆🏅❤
Keep it up🙏👍
Oh now I understood how to trade 52 week high properly, I had heard so much about 52 week high but didn't know how to go about it, thanks 🙏🙏🙏
Good stuff!🙏
jus amazing, still millions of traders putting his box theory into practice and gaining never-before-seen profits
Absolutely
Your videos are great. Thank you for your free educational bites
Thanks David🙏
Good trading wisdom, tx for sharing.
My pleasure!
Another great video, thanks! Do you think this method can work for shorting, so make a box on a 52 week low, and trade exactly the opposite way as explained in the video/book (i.e. mirror trades but on the downside)?
Thanks for such a wonderful learning...
Always welcome
I've been investing for 20 years and have never done well but over the past few months and years I've sort of gravitated to this method of buying stocks. It's an easier chart pattern to follow than other patterns.
Great explanation of the Darvas Box.
Glad it was helpful!
Great video and well explained!
Glad you liked it!
👍🥇👑 Nice exposition on a fantastic investment technique! Please keep up the good work! 📯
Thank you! Will do!🙏
Good videos man keep me coming
Thanks MTB
I read this book a while ago.
I think it's the best book on trading I have ever read in my entire life!
However, if I remember correctly, Darvas did not rely only on chartism when he picked a stock. He also did some fondamental researches about the company which makes his approach powerful but not that easy to the average trader (like me).
Also, at that time, screeners did not exist... Was he following all the stocks in the US market? Was he first checking the sector that was performing during a specific period (year, month, quarter?)...
It's definitely a great book, however, I have the feeling we're not being told everything and just relying on the boxes is not enough. Tons of stocks break a range with volumes and most do not end well...
I am probably wrong and I would love that, because I like this approach.
And I should probably read (or perhaps study it more in depth) again the book, maybe I just forgot :).
PS: Covid-19 broke the trend on GENUS...
Great video!
Hi Nicolas, thanks for your detailed comment - You could well be right in terms of the disclosure of his entire thought process i.e the fundamental aspects - In my honest opinion I cant believe he covered all the US stocks, without, as you suggest, access to a screener this would be an impossible task. Perhaps luck was in his favour for some of the selections he took, who knows. What I would say however is that the theory presented to us is very sound and is very closely aligned to the process I use - A breakout with volume and an objective stop for good risk management. In essence this promotes that platform for good risk reward trades and over time with the law of large numbers its likely the strategy would be profitable, the addition of fundamentals which I combine have made this approach considerably profitable for me, with manageable drawdowns.
Yes COVID will have put an end to most 'mechanical' based systems but this only reinforces the need for proper risk management.
Thanks for your contribution and good luck!
most breakouts turn out to be bullshit ~ russell sands
electronic trading and higher volatility would most likely change his methods if he were trading today
Yeah...he simply trend followed GREAT stocks in a bull market.
No system needed.
I loved the last quote of Darvas!! Thank you for sharing yours and his wisdon
You are so welcome
Thanks for this video Bro!
No problem!
Thanks for great information...
Just completed reading the book ....and now completely understands the flow box theory works..... Really appreciate it.....
Glad it was helpful!
Can you clarify how to find stocks which satisfy Darwas requirements....as Darwas used change in volume and some technical stuff.... Kindly give some useful advice..
Thanks
Thanks for the video, I wish you lots of luck with your trading.
Thanks, you too!
Very nice video, good explanation of the method. Thanks for your hard work.
Thank you
Superly explained Man...Thanks a Million...
You're most welcome
Very nice explanation. Thanks a lot.
You are most welcome🙏
Excellent summary thanks
Very welcome
Great review! 👏
Thanks Hasan
I followed up on GENUS just out of curiosity, the 2 weeks after the nice rise it fell back down past what should've been a stop loss. But following those 2 weeks it made another 52 week high, formed a box and has been running ever since! Very interesting to say the least, great video by the way!
HI Thomas, Yes the stop loss was hit during the pandemic, using the same weekly breakout strategy we would have re-entered at 3972 on the 7th September. The key is not to base the feasibility on one trade, its a probabilistic game over hundreds of trades. The fact the trade limited risk is the primary objective. If for example the Carnival stock was chosen the stop loss would have been the right thing to do.
@@FinancialWisdom I 100% agree with you, I drew up some boxes and would've entered on the breakout on the 7th of September with you. After reading the book I realised that it's not a hard strategy to wrap your head around, it limits risk and losses but allows for greater profits! Definitely going to be incorporating it in my investing.
Great job in all of your Videos! Really helpful and full of real gold nuggets. Keep doing what you're doing. Maybe even examine the Indicators and the supporting evidence behind them. Also, it would be great if you can address the Algorithnic trading process. Great graphics too.
I appreciate that!🙏
Thanks 🙏
This is a GREAT VIDEO. Thanks.
Thank you Romulo, much appreciated
it was a fantastic abstract of the best trading book i have ever read.
Thanks!
Superbly explained
Thanks!
Excellent style to narrate
Thanks Ashok
Thanks 12 min simple to learn
You are welcome
Subscribed for explaining strategy
Great🙏
This is a great video. A neat story and great book.
Thanks!
You tought very simple way , thanks 👍😊😊👍👍👍👍👍
Most welcome 😊
Wow love this video. The best explanation of this strategy I have found so far and not confusing like the actual book.
Glad it was helpful!
Nice Sharing Tq Sir. Actually, Sir Richard D Wyckoff already tell us 100yrs ago about this box. In Wyckoff, the “box” refer on the Trading Range with fully schematics. Happy Trading everybody.
thats my favourite way to play the market. Darvas was a clever man
I agree
He's the LEGEND ! GOAT.
Agreed
Awesome explanation..
After watching many of your videos alhamdulillah am making very much progress combination of most strategies am developing a good one for my own trading style.
Great well done Bilal
New to the channel but've read Darvas' "HIM$2M" (also recommend its follow-up, "Wall Street: The Other Las Vegas").
Your synopsis distilled and highlighted his key points which were, in turn, both elegantly presented and explained in a manner easier to follow than in the book. (Meanwhile, I'm waltzing over to the "Like" button and flamencoing the sh^t out of it.)
Thanks mule! 🙏🙏
This is a wonderful explanation video as well as an author strategy. Thank you so much for providing this valuable information to us. I'm from India
My pleasure
Thanks
Thank you
You're welcome
currently testing this Darvas box strategy on a 1 hr chart for entries but using a 4 hour trend confirmation and it looks awesome.
Great, feel free to share...👍
Stock is more important