DARVAS trading
- Thread starter vetten
- Start date
ofcourse it will work; stocks are still trying to climb to the moon.
Blackstar Funds did a major search spanning 22 years: Does trend following work on stocks - buy every stock when it reaches an all-time high with a stop loss and a trailing stop with a mechanical system.
Conclusion: Yes (average annual compounded return of 19.3%)
surely a trader can do better than 30% if the better trades would have been taken.
Blackstar Funds did a major search spanning 22 years: Does trend following work on stocks - buy every stock when it reaches an all-time high with a stop loss and a trailing stop with a mechanical system.
Conclusion: Yes (average annual compounded return of 19.3%)
surely a trader can do better than 30% if the better trades would have been taken.
Quote from vetten:
of course it will work; stocks are still trying to climb to the moon.
irrelevant.
Blackstar Funds did a major search spanning 22 years: Does trend following work on stocks - buy every stock when it reaches an all-time high with a stop loss and a trailing stop with a mechanical system. Conclusion: Yes (average annual compounded return of 19.3%)
There are many studies like this, but such inefficiencies mostly tend to stop working.
surely a trader can do better than 30% if the better trades would have been taken.
No such thing as surely. Otherwise the investment banks would do it.
Quote from vetten:
hello folks,
is anybody here doing this type of trading?
If you like Darvas' type of strategy I would suggest to you the IBD 100 stocks. I see a big similarity between William O'Neil's ideas and Darvas'. These are both position trading strategies, not swing or day trades.
If you decide to take my advice you should read O'Neil's book, "How To Make Money In Stocks". The book is like a "how to read and understand Investor's Business Daily". Then you'll need to track the IBD 100 which comes out every Monday (on stands on Saturday by me).
Just remember that some of the IBD 100 stocks can be small float, thinly traded, highly volitile stocks.
Yes, I trade like this... and it is working for me.
If you want examples that it is still working...
TCM.TO
RAL.TO
CROX
BIDU
FSLR
MA
AAPL
TNH
POT
RIMM
AMZN
ISRG
LPHI
NILE
PMG.TO
just to name a few.
Key is your money management... Darvas bet very bold... the bolder you bet the more you can potentially make/lose.
If you want examples that it is still working...
TCM.TO
RAL.TO
CROX
BIDU
FSLR
MA
AAPL
TNH
POT
RIMM
AMZN
ISRG
LPHI
NILE
PMG.TO
just to name a few.
Key is your money management... Darvas bet very bold... the bolder you bet the more you can potentially make/lose.
trend_guy,
thanks for your post.
No, you dont have to convince me that it is working; I know it is working, some years better than others I suppose.
I`ve been thinking about going the Darvas way for years, but probably was always to impatient to wait for the set-up.
At the moment I`m trading the penny stocks in Oz and doing very well, although I`m giving back too much profit.
Darvas` entry is a fraction (there were fractions in those days) above the all-time high and the stop loss is a fraction below the all-time high.
Do you follow that same stop loss idea and wouldn`t you get stopped out almost immediately?
Now I must say that you can run up a lot of that sort of stop losses before it amounts to anything really.
David Ryan/O`Neill are close to Darvas` idea, but with heaps of fundamentals. Their initial stop loss is a lot higher at 7%.
Darvas doesn`t adhere to his stop losses in his trade examples.
He often has a stop loss 1-2 dollars from the entry price and even on the journey up with a stop just under the new box he would`ve sold out quite a few times before he actually did sell.
What is your take on where to place the stops when entering and managing the trade?
Or would it be too difficult to tell where on average the best stops would be?
I would love to hear more about your experiences.
thanks for that.
thanks for your post.
No, you dont have to convince me that it is working; I know it is working, some years better than others I suppose.
I`ve been thinking about going the Darvas way for years, but probably was always to impatient to wait for the set-up.
At the moment I`m trading the penny stocks in Oz and doing very well, although I`m giving back too much profit.
Darvas` entry is a fraction (there were fractions in those days) above the all-time high and the stop loss is a fraction below the all-time high.
Do you follow that same stop loss idea and wouldn`t you get stopped out almost immediately?
Now I must say that you can run up a lot of that sort of stop losses before it amounts to anything really.
David Ryan/O`Neill are close to Darvas` idea, but with heaps of fundamentals. Their initial stop loss is a lot higher at 7%.
Darvas doesn`t adhere to his stop losses in his trade examples.
He often has a stop loss 1-2 dollars from the entry price and even on the journey up with a stop just under the new box he would`ve sold out quite a few times before he actually did sell.
What is your take on where to place the stops when entering and managing the trade?
Or would it be too difficult to tell where on average the best stops would be?
I would love to hear more about your experiences.
thanks for that.
when you read anything, be it Darvas, Oneil, BUffett etc etc I think most people screw up by trying to follow the method exactly. When you do that, your essentially taking a methodology that is suited for another person and their personality and trying to force it on yourself. You are far better off to look into what they are doing, understand the philosophy they are applying to the market and see how much of it makes sense to you and you can use in your own trading. In that regard I find Darvas to be pretty good myself and some of his stuff has found its way into what I do.
brandonf,
thanks for your comments.
I do realize what you`re saying and I`m not exactly a spring chicken after trading for 9 years.
I think that it is very important for a system to have minimal losses and the profits will come.
One of the best systems might be trading the break-out from a heavy resistance area with a stop loss just under the high.
In this case the stop losses will be minimal.
The longer the congestion area lasted the better and then a break-out with high volume.
thanks for your comments.
I do realize what you`re saying and I`m not exactly a spring chicken after trading for 9 years.
I think that it is very important for a system to have minimal losses and the profits will come.
One of the best systems might be trading the break-out from a heavy resistance area with a stop loss just under the high.
In this case the stop losses will be minimal.
The longer the congestion area lasted the better and then a break-out with high volume.