Nicolas darvas profitable portfolio model


Hungarian by birth, NicolasDarvas trained as an economist at the University of Budapest. Time MagazineAt the age of 39, 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. The book describes his unique "Box System", which he used to buy and sell stocks.His famous stock selection method was called "BOX theory." He considered a stock price wave as a series of boxes. When the stock price was confined in a box, he waited. He bought when the price rose out of the box. He simultaneously set a stop-loss just under this trade price.Darvas ploughed his money into a couple of stocks 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.Darvas decide to regroup to assess this remarkable occurrence. And it was here that Darvas came up with this approach and plan for trading stocks that was to see him achieve $2,450,000.00 fortune in just 18 months, during the 1957-58 bull market. In total, just 7 short years since his first trade. He stated, "I keep out in a bear market and leave such exceptional stocks to those who don't mind risking their money against the market trend. Darvas never sold short. As he states, "I have never done it myself because psychologically I am not cut out for short selling. But I think markets have now changed their character so much that all experienced investors should seriously consider it. It is not for the proverbial widows and orphans, though.. He realized that his system could easily be adapted to short selling.

Books for Reference Trend Trading: A Seven-step Approach to Success (Guppy Trading), by Daryl Guppy (May 28, 2004) The Astute Investor (Second Edition), by Eric L. Prentis (Mar 27, 2006).

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