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I use Darvas charts but don't use his methods.
If you use his methods you better buy stocks like SE, SANM or even
MGM which stay above their 50 Day MA with a 45 deg slope up. Sell
when it hits your stop-loss or support zone low.
I use volume with those charts like you are suppose too, but the
code is written in the default from close prior day to close
today...not refering to todays open price to todays close in the
Candlestick color code. I like to see wider and larger volume
candles also.
I think sometimes the classical method of MACD, stochastics and RSI
work the best. My first graph approach was Point n Figure charting
" How the average investor can use Technical Analysis for stock
profits" by James Dines. Which is an excellent good book!!
--- In amibroker@xxxxxxxxxxxxxxx, "palsanand" <palsanand@xxxx> wrote:
> Hi,
>
> A well known canadian Investment Adviser and Author, Morton
Shulman,
> who wrote books like "How to Invest Your Money & Profit from
> INFLATION" (I just finished reading this book) and "Anyone Can
Make A
> Million" has this to say about Darvas:
>
> In p. 170:
>
> In the 1960s, a dance instructor named Nicholas Darvas wrote his
> story of How I made Two Million Dollars in the Stock Market, New
> York: American Research Council, 1960.
>
> Buyers of the book discovered that the author's chief tool was to
put
> in orders to sell stocks if they went down and to hold his winners
> that were going up. But those who tried to follow Darvas' method
> lost money as the market whipsawed....
>
> Every year, dozens of new books come out, each giving a different
> formula on how to get rich. They all seem to do well - at least
for
> their authors and publishers. The public must be very confused.
Who
> is to be believed?
>
> In p. 171:
>
> The sad fact is that most investment books are written not by
> millionaires who have made money in the market, but by authors who
> hope to make money with their advice...
>
> In p. 172:
>
> And as a result much of the material in these books, no matter how
> well meant is, is misleading or just bad advice....
>
> Hmm...
>
> Regards,
>
> Pal
> --- In amibroker@xxxxxxxxxxxxxxx, "palsanand" <palsanand@xxxx>
wrote:
> > Hi,
> >
> > When the price backed by solid volume, breaches support and
> > resistance levels, support becomes resistance and resistance
> becomes
> > support...
> >
> > So, I'm unable to fully refute the Darvas Box method.... It is
a
> > sort of a continuation signal... Maybe this is what was missing
> from
> > my tool box in conquering this continuation signal nightmare and
> > ecstacy, now that I have solved the mystery of the breakout's
and
> > trend-change pullbacks...
> >
> > Ironically, Continuation signal is at the same time, my worst
and
> my
> > best signal...
> >
> > If somebody can refute it, I will be greatful to hear it...
> >
> > Regards,
> >
> > Pal
> >
> >
> > --- In amibroker@xxxxxxxxxxxxxxx, harveyhp <harveyhp@xxxx> wrote:
> > > Here is Darvas's own description.
> > >
> > > P.51. "Within this trend stocks moved in a series of frames,
or
> > what I
> > > began to call "boxes".
> > > They would oscillate fairly consistently between a low
and
> a
> > high
> > > point. The area which enclosed this up-and-down movement
> > represented the
> > > box or frame. ...
> > > When the boxes of a stock in which I was interested
stood,
> > like a
> > > pyramid, on top of each other, and my stock was in the highest
> box,
> > I
> > > started to watch it. It could bounce between the top and the
> > bottom of the
> > > box and I was perfectly satisfied. Once I had decided on the
> > dimensions of
> > > the box, the stock could do what it liked, but only within
that
> > frame. In
> > > fact, if it did not bounce up and down inside that box I was
> > worried.
> > > No bouncing, no movement, meant it was not a lively
stock.
> > And if it
> > > was not a lively stock I was not interested in it because that
> > meant it
> > > would probably not rise dynamically.
> > > ... But, of course, the movement the movement I was
> > constantly
> > > watching for was an upward thrust toward the next box. If
this
> > occurred I
> > > bought the stock.
> > > ... While it stayed within its box, I considered a
> reaction
> > from 55
> > > to 50 as quite normal. It did not mean the stock was going to
> fall
> > > back. Just the contrary.
> > > Before a dancer leaps into the air he goes into a crouch
to
> > set
> > > himself for the spring. I found it was the same with stocks."
> > >
> > > That's pretty much the whole description of the boxes - just
> > support and
> > > resistance levels. There is no secret formula. All I could
find
> > about a
> > > percentage below the low price was one statement near the end
of
> > the book,
> > > where he bought four stocks and "On each of these stocks I put
a
> > stop-loss
> > > order of 10 per cent below buying price." High volume, yes:
> > P.61. "My
> > > selections were high-volume stocks anyway."
> > > This was the 1950's when personal computers were far in the
> > future. Darvas
> > > doesn't even mention charting the stocks by hand.
> > >
> > > HHP
> > > =====================
> > >
> > > At 04:27 PM 30/09/2003, you wrote:
> > >
> > >
> > > >Note: forwarded message attached.
> > > >
> > > >
> > > >
> > > >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
> > <http://www.investor.net/charts.asp>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/default.asp#stx4>
> > > >2c0eb4a.jpg
> > > >
> > >
> >
>
><https://secure.modulusfe.com/order/default.asp#stx4>https://secure.
m
> > odulusfe.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
> > <http://www.modulusfe.com/newsletters/TE100103.asp>How
> > > >I Made $2,000,000 In The Stock Market
> > > >
> > > >Yours Truly,
> > > >Tom Wong
> > > >Modulus Financial Engineering
> > > ><mailto:t.wong@x...>t.wong@xxxx
> > > >MCSD, MCP
> > > >
> > > >You may reprint and redistribute this article so long as the
> > signature,
> > > >copyright and link remain.
> > > >
> > > >Copyright(c) 2003 by <http://www.modulusfe.com>Modulus
Financial
> > Engineering
> > > >
> > > >
> > > >
> > > >
> > > >If you received this email in error or would like to
> unsubscribe,
> > please
> > > ><http://www.modulusfe.com/remove.asp>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.
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