NICOLAS DARVAS Box Trading Strategy - Darvas Box Method - How I Made 2 Million In The Stock Market

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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As a professional trader I have consumed hundreds of financial books and endured countless hours of self education. My hope is that this channel will reduce the learning curve duration of many aspiring traders by providing the key information in a concise and enjoyable manner.

[FinancialWisdom]

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[Jsmith-xift]

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).

[willsx]

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!!

[FemaleTraderRamya]

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..

[lynnkoeffler]

A key aspect of a successful trading is an effective trading strategy

[theinvestmentdoctor]

This was EXTREMELY useful video. I’m always scared of buying at the 52-week high. I’ll add this strategy to my arsenal 😃

[marinrodriguez]

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.

[loumarciano]

I have the book. Great . The 52w high is the key. Most miss that point.

[smarthelp]

Sideways Consolidation have high odds if they break out of the range. The momentum kicks in. Both sides long or short.

[FinancialWisdom]

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[britneythao]

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.

[artemchuprin]

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!

[frniclas]

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!

[kevinrawle]

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.

[AntonioSantos-mhnu]

The Darvas Box method is briliant. And a great tribute to Jesse Livermore who inspired Darvas. Excellent presentation of the Darvas Method.

[stockwhisperer]

Finding this a year later and sure enough, there were a couple of box breakouts on GENUS, as predicted. Thanks for the video!

[cottondai]

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.

[zidniapriya]

recently finished the book and amazed that this is in 50s

[howardadams]

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

[jivepatrol]

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!