Darvas methods?

I know that many people around here don’t really like OmniTrader (my guess is they didn’t take the time to really learn it), but Nirvana Systems has a Darvas plug-in for OT2004 that works great. It’s not optimized so the signals don’t change, that’s one thing I don’t like about some of their other trading models.

And some people mention that the Darvas method only works in a bull market, well I’ve found it to work very well with shorting also. But do whatever works for you.
 
Quote from dafugginman:

interesting that you wrote about this. i just started reading his book (the first one) last night, and am only half way through, but here are my impressions so far.

i don't see anything spectacular in there at all. buy stocks as they are breaking out of consolidations, and use a stop, then a trailing stop. i noticed that he buys beyond the traditional breakout point, usually by a point or so. pretty simple, but maybe it's keeping it simple that works. my impression is that he got extremely lucky on his first two major winners, that gave him his first 500k, with a buyout for example in one, and some rights thing in another.

that said, i will give him credit for two things, his excellent discipline in keeping losers small, and for holding winners for a long, long time.

if i come up with anything further as i finish his book (i have the other one also), i'll add to this thread.
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You've missed a few critical points in the book. Firstly, what he calls the "techno-fundamental" approach. Basically this means only use the Darvas box method on stocks which have a "hot" story or concept. These are much more likely to have continual ascending congestion ranges that the Darvas method is suited to. More normal stocks will usually chop you up if you try to use this method.

Secondly, he mentions the importance of staying out of the market once the speculative leaders start to break down and penetrate the boxes to the downside.

Third, only return to the market when new speculative leaders emerge and start making all-time highs (or at least 52 week highs).
 
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