Darvas methods?

Quote from joe4422:

Darvis's system was actually very simple. First, he found the hot sector. For example, maybe something like cloud computing servers today. Then he waited for a massive volume day. Once he saw the big volume, he would start to watch the daily quotes. He would wait for a new low that holds that low for three days, and that became the bottom of the box. What ever recent high had been made was the top of the box. Then he simply traded the box, and that's how he got rich. End of story. No reason to make it more complicated than that, other than the fact that it's human nature to make things as complex as possible.
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Yes, and he only traded in bull markets. And never sold a rising stock...
 
Darvas boxes and Donchian channels are both interesting. On nq or es I run one or the other always on a few charts. Whenever there is a consolidation, even if its just a few candles, I box things in anyway..so do many. The longer a box builds (a volatility squeeze builds) the more orders line up above and below them..longs and short strops above and vice versa. If you look close in a box (consolidation) what is often happening is probing up and down seeing who shows up, looking for the weak side, then the price tends to wedge up in a box and move out strength into the weak side. Obviously in a strong big order flow agenda trend it will tend to resolve in direction of trend.. But I like to let it reveal and be "swept" into the trade as Al Brooks would say. As an advanced technique I run a quick donchian hi/low/mid line on my dom in ninja. If price is moving up i'll enter a buy just above the mid point catching the buy on the quick pullback. If its a boxed consolidation and something like tickq is breaking upward and Im trading nq I'll do a stop limit buy above the upper donchian line on the dom. No need to look at the chart. Then upon entry I'll lay in target sell orders above and more buys at the mid donchian the theory being in and uptrend if it pulls back to 50% I get hit and it keeps going . If goes beyond the mid and toward the low or below I stop buying scaling in. A quick donchian or darvas applied to your dom will show you real and quick (recent) support/resis/50 zones. I also have midpoint for the session and vwap on the dom..hi/low of day etc etc. Seldom have to look at any charts..just glances. If the box breaks up rather than the buy limit order above I might just hit a buy and attach it to the mid point of the channel line and let that float till hit. I would say boxes are important regardless of weather its Darvas or not. An old saying is play the range, play the break, play the trend on a pullback. Any range is a box. Price really goes from box to box..or price moves from confluence to confluence in waves and patterns. Any box or channel is also a "stable datum"..reduces confusion by giving something to orient to. Then everything moves in relation to it. One I use always is the opening 1 min range. If you have say market depth you can see when orders come in. and around the boxes. Traders do trade within them, outside of them, to them, around and in front of them. Careful of trap (rarer) breakouts after 5 wave force exhaustion..or at big prior box or "level" or big round number, vwap, point of control, session or leg (wave) midpoint etc. Ok, enough rambling. Darvas, Donchian..thumbs up!
 
boxes/channels or no boxes/channels, he was exceptionally good at sticking to his winners..ex-ce-ptio-na-lly!
he would've been a great bitcoin trader/winner had he laid his hands on it at the begining.. and who knows, maybe even now?:)

boxes/channels by itself won't give you a 10 000% winners..you need luck..
 
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Boxes, channels, a bit of fundamental analysis, market awareness, adding to winning positions and a very disciplined sell strategy.

Darvas was adding to positions and taking on margin when others were locking in their profits. A true speculator!!
 
grainmerchant said:
Has anybody ever found any useful 'nuggets' with Darvas' trend following ideas.? I know the Donchian channel system, etc, but Darvas' systematic approach was slightly different. Any ideas?
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Isn't the Darvas method basically the same as Renko boxes? Darvas applied boxes to the hottest stocks in the hottest sectors, going either long, or sitting in cash. What am i missing?
 
Good1 said:
Isn't the Darvas method basically the same as Renko boxes? Darvas applied boxes to the hottest stocks in the hottest sectors, going either long, or sitting in cash. What am i missing?
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Money management.
 
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