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--- Begin Message ---
To: <palsanand@xxxxxxxxx>
Subject: TradingEdge News: The Amazing Darvas Box Secret
From: Modulus FE <bounce@xxxxxxxxxxxxx>
Reply-to: Modulus FE <bounce@xxxxxxxxxxxxx>
Title: Modulus Financial Engineering
Modulus Financial Engineering
Trading Edge Newsletter for October 2003
This issue 3-2003: How I Made $2,000,000 In The Stock Market”
The risk of loss in trading can be substantial. You should therefore carefully consider whether such trading is suitable for you in consideration of your financial condition. In no event shall Modulus Financial Engineering be responsible for your trading losses.
Darvas Boxes
The Astonishing Secret!
Nicholas Darvas was a famous dancer in the 1950s who wrote a book entitled
How I Made $2,000,000 In The Stock Market. This was a non
fiction book..
a real, true story about how Mr. Darvas started out with around $20,000 and turned it into over $2 million by looking through the finance section of newspapers in the evenings and applying his secret formula.
The author describes his investing style as a narrative. He takes you through his investing evolution
step by step, detailing his actual experiences. I must say, his writing style made the book very easy to follow and understand. The book emphasizes both technical and fundamental criteria,
both key ingredients to proper trading and investing.
Not too many people have even heard of Darvas boxes before. You have to admit,
you probably never heard (or at least used) Darvas boxes either! I learned about Darvas boxes recently and have been experimenting with them. Today, a client of Modulus FE called to chat with me. He is a famous trader, a
well respected man and a wonderful client. I tried to
pick his brains about Darvas boxes. To my amazement, he had never even heard of them!
Darvas box? What? Never heard of it, son!
I first learned about Darvas boxes when a client of ours requested the calculations and graphics to be programmed into our StockChartX ActiveX
component. It took us more than one go at it, but we did manage to get it right after exhausting just about every
bit of information we could get our hands on. I spent the next three days in solitude just playing with these boxes. Yes, they are that
amazing! I am now experimenting and back testing several systems based solely upon Darvas boxes. I am also experimenting with a Darvas scanning system, which scans thousands of stocks each day. If this works out then you can expect to see it listed on our site as a web service! You just have to try the boxes.
They are amazing!!!
How To Use
Darvas boxes are dynamic trading range boxes that are based upon a complicated state machine algorithm. These boxes have two areas. The bottom part is a stop loss area and the top part is the
break out
area. When prices break above the top of the box, Mr. Darvas would buy if the stock was making new
12 month highs on high volume. He would then stay long and add new positions as new boxes developed. When the price of the stock dipped below the
stop loss section of the box (a percentage of the price, just below the bottom of the box), he would take profits and move on to something else.
If you're wondering what Darvas boxes look like, take a peak at
our Investor.net
charting page. Look at the 2nd picture, on the bottom left.
Formula
While Darvas boxes may not look too intimidating, I will not hesitate to say that Darvas boxes are one of THE most difficult calculations I have come across in quite awhile. The entire process is like a complex state machine. The Darvas box uses several steps to identify a top and bottom, or acceptable trading range.
Explaining how these boxes are calculated could easily consume several pages. Your best bet would be to purchase
the book from Amazon, or purchase our StockChartX component (with or without the source
code) if you want to get started using Darvas boxes right away.
StockChartX Makes It Easy
You can skip the hurdles and simply call one method of StockChartX:
ShowDarvasBoxes()
StockChartX is the only charting component in the world that calculates Darvas boxes. Furthermore, there are only three complete
end user applications in existence that calculate Darvas boxes, and one of them does it incorrectly!
To purchase StockChartX, visit
https://secure.modulusfe.com/order
The component comes with our 30 day risk free product guarantee.
Use it in Excel, VB, VB.net, C#, C++, Delphi or FoxPro for
personal use or commercial use.
If you already own a license to StockChartX,
simply redownload to get the latest version, which includes the
Darvas boxes. Refer to your original invoice email for download
instructions.
Or, to get the book How I Made $2,000,000 In The Stock Market
Yours Truly,
Tom Wong
Modulus Financial Engineering
t.wong@xxxxxxxxxxxxx
MCSD, MCP
You may
reprint and redistribute this article so long as the signature,
copyright and link remain.
Copyright(c) 2003 by Modulus Financial Engineering
If you received this email in
error or would like to unsubscribe, please click
here. This email is sent in accordance with U.S. Bill S.1618 Title III passed by the 105th
U.S.congress.
Please do not reply to this message, as this email supports outgoing email only.
Copyright 2003 - Modulus Financial Engineering.
--- End Message ---
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