Darvas or IBD?

[gaj]

Quote from chimera:

Darvas was kicked out of the us for lying in his book. He never made anything like those gains. D.A basically told him not to return.

link?

the kicked out part isn't true; the settlement was "darvas, promise not to be a broker, and drop your libel lawsuit against the state".

the guy who wanted to prosecute darvas (lefkowitz) claimed he only found 216k in profits, and darvas said he only accessed one of his six brokerage accounts. he initially tried to get the book banned in ny state, that was overturned.

given the amount of (now-illegal) stuff that brokerages did, i have no problem believing he had multiple accounts so that his orders wouldn't get front-run once he started putting on size. don't forget, there was no obligation to fill then (there is now).

there was lots of shady stuff going on after his book came out - some brokerages tried to eliminate stop-losses because their customers started to use them and a bunch of other things. see richard ney's books for some of the more general shenanigans going on in that period.

although darvas may or may not have had the 2 million cited with no margin being used, the methods cited in there were being used for years before he published it in the book (or in the original time magainze article)

by the way, the only other darvas book worth reading is wall street, the other las vegas - and only as a sequel to the first book. his success book is insanely egotistical, the OTC book can't be used in any way today, and you can still make it is a rehash of the first book with a darvas box thrown in.

 

[bankroll]

Quote from chimera:

Darvas was kicked out of the us for lying in his book. He never made anything like those gains. D.A basically told him not to return.

The release of the DA acronym?

 

[bankroll]

Quote from gaj:


by the way, the only other darvas book worth reading is wall street, the other las vegas - and only as a sequel to the first book. his success book is insanely egotistical, the OTC book can't be used in any way today, and you can still make it is a rehash of the first book with a darvas box thrown in.

The release of the OTC acronym? I know Over The Counter but I guess here it's different.

I don't know but for some people is it just natural to form acronyms of anything? I seem like not one of them.

 

[blah12345678]

DA = District Attorney

However, this is an error. The prosecutor in question was the New York Attorney General, who is the head lawyer for the State of New York.

 

[bankroll]

Now away from explaining acronyms and back to the topic:

My friend also found Darvas (possibly - http://www.elitetrader.com/vb/showthread.php?s=&threadid=273635) highly effective.

 

[blah12345678]

Quote from bankroll:

The release of the OTC acronym? I know Over The Counter but I guess here it's different.

I don't know but for some people is it just natural to form acronyms of anything? I seem like not one of them.

OTC = Over The Counter is correct.

Basically, back then, the AMEX exchange was the OTC of its day - the ugly, red-headed stepchild compared to the NYSE.

 

[deaddog]

I think the difference is that O’Neil uses fundamentals to narrow down his universe of stocks and TA to buy them. O’Neil use CANSLIM to pick stocks.

Darvas uses TA to select stocks, then fundamentals to narrow the list down and then TA to buy and sell. The Darvis system looks for stock making all time highs, that have at least doubled over the past year, on increased volume, in leading industries. He also takes earnings growth and capitalization into account.

Either system works well for a position trader. Both have well defined rules for entry and stops. If I had to chose one I'd take Darvis basically because his exit rules are simple. You place a stop with the broker and let the market take you out of the trade. O'Neil has 36 pointers to consider when you are in a profit position but nothing specific. Also the "Darvis Box" defines support and resistance while O'Neil stops you out at a certain percentage.

 

[blah12345678]

Quote from deaddog:

I think the difference is that O’Neil uses fundamentals to narrow down his universe of stocks and TA to buy them. O’Neil use CANSLIM to pick stocks.

Darvas uses TA to select stocks, then fundamentals to narrow the list down and then TA to buy and sell. The Darvis system looks for stock making all time highs, that have at least doubled over the past year, on increased volume, in leading industries. He also takes earnings growth and capitalization into account.

Either system works well for a position trader. Both have well defined rules for entry and stops. If I had to chose one I'd take Darvis basically because his exit rules are simple. You place a stop with the broker and let the market take you out of the trade. O'Neil has 36 pointers to consider when you are in a profit position but nothing specific. Also the "Darvis Box" defines support and resistance while O'Neil stops you out at a certain percentage.

Every night, I have a script that runs the Darvas filter on the universe of stocks:

1. Has traded for at least 1 year (252 trading days)
2. Last closing price >= $20.00
3. Last closing price >= All-Time High * 75%
4. 1-Year High/Low Ratio > 2.00
5. Maximum shares outstanding <= 30,000,000
6. Minimum 1-Year average daily volume >= 100,000

Yesterday's report had the following stocks:


Report Date Symbol 1-Year Ratio Shares Outstanding All-Time High Last Close

2013-06-11 CLVS 7.71 26,260,000 86.29 74.83
2013-06-11 AEGR 5.70 28,820,000 75.69 74.01
2013-06-11 LL 3.07 27,470,000 90.92 82.11
2013-06-11 MDSO 2.75 25,190,000 75.22 68.00
2013-06-11 HCI 2.63 10,900,000 36.04 34.51
2013-06-11 LAD 2.58 25,670,000 57.04 54.84
2013-06-11 GIII 2.39 20,670,000 52.26 48.61
2013-06-11 USNA 2.35 13,480,000 71.70 70.48
2013-06-11 SODA 2.35 20,680,000 79.72 73.78
2013-06-11 IRBT 2.20 28,260,000 39.00 34.49
2013-06-11 MGAM 2.19 28,870,000 28.74 27.11
2013-06-11 TREX 2.09 16,880,000 58.94 50.16
2013-06-11 PRLB 2.04 25,220,000 59.84 54.82
2013-06-11 RRGB 2.04 14,160,000 62.91 57.15

 

[bankroll]

Quote from gaj:

by the way, the only other darvas book worth reading is wall street, the other las vegas - and only as a sequel to the first book. his success book is insanely egotistical, the OTC book can't be used in any way today, and you can still make it is a rehash of the first book with a darvas box thrown in.

Okay. so far we know that OTC equals Over The Counter here. But I am still clueless on which of his books do you refer to as the "OTC book"? Have no clue. Thanks.

 

[blah12345678]

Quote from bankroll:

Okay. so far we know that OTC equals Over The Counter here. But I am still clueless on which of his books do you refer to as the "OTC book"? Have no clue. Thanks.

All you have to do is search for "Nicolas Darvas" at Amazon...