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My weekend learning from book 📗 You Can Still Make It In the Market written by Nicolas #Darvas

Trying to share my learning.. inspired by @MarketScientist @AmitabhJha3 @AnyBodyCanFly @RichifyMeClub @Wealth_Theory

Learn and become #AatmaNirbhar 🙏

👉 In this book Darvas documented his experiences from 1973-1975, he applied #Darvas box method when the stock market was recovering from its crash 📈of around 50% in 1973

#DarvasLearning

👉#Darvas first developed and applied his methods very successfully in bull market where index tripled from 1950 to 1960.
👉Many doubted that his system works in a bull run only as he used to pick stocks at 52 week high.

👉As the market recovered, stocks rose quickly without forming boxes which did not give him opportunity.
👉during this period he worked to refine his system.
👉His patience bore fruit when he was able to identify stocks that formed boxes to make his money.

#DarvasLearning

👉#Darvas introduced "Dar-Card"
👉 he took the help of a graphic designer to create a visual tool called the Dar-Card, that basically shows the Darvas boxes on a chart and a shaded danger area at the bottom of each box (i.e. the area is shaded from

the bottom of the box till 5% below the bottom of the box).
👉 ND changed Entry and exit rules for Dar-Card

🗝️Change in entry rule - He started to look for 2nd penetrations of the same box top to absorb the selling at first break-out attempt.
#Darvas #Learning

🗝️Change in the initial stop loss rule - earlier it was set to 1/8 below the breakout level, now it is set to 10% below the breakout level.

#Darvas #Learning

👉Rules to make Dar-Card
⛳️When the price of a rapidly rising stock reaches a resistance point which it does not surpass for Three or more consecutive days, that point represents the top of the box.

#Darvas #Learning

⛳️If, after falling from the upper limit, the stock reaches a downward resistance point which does not penetrate for 3 or more consecutive days, that level represents the bottom of the box
⛳️The shaded danger level is indicated when the price falls 5% below the bottom of the box

👉How Darvas used the Dar-Card
⛳️A stock is in a rising trend when it is in its topmost box. As long as it remains there its price fluctuations should be ignored and the stock is a HOLD.

#Darvas #Learning

⛳️If the price of the stock moves above the top of this topmost box the stock becomes a BUY. A 10% stop-loss should be set on the 1st breakout.
⛳️Having formed a new higher box, if the price falls below the bottom into the shaded area of this box the stock is SELL.
#Darvas

⛳️There is no reason to HOLD or BUY a stock that is not in its topmost box.
👉His advised to pick stocks with a promising future in new and developing industries (i.e. companies whose growth and earnings prospects look highly promising), or stocks related to some new craze

👉Industry Group: The stock should belong to a strong industry group, i.e. a group that is performing well in the market relative to other groups.
🗝️Avoid “widows and orphans” stocks, i.e. institutional favorites that are large and established with huge share float.
#Darvas

#Darvas advised to look for
⛳️Sudden rises in price and volume
⛳️Out of the ordinary relative strength
⛳️Movement against the general market trend
⛳️Relaxation of the All-Time High Rule After a Bear Market
#Learning

👉before bear market #Darvas would only buy stocks making all-time highs. After the 1974 bear market, Darvas reasoned that the bear market had been so severe that all the weak holders of the stock would have abandoned it by now, hence it is fine to not wait for all-time highs.

Here is the illustration and complete gist in a chart for this book and Dar-card.
@AmitabhJha3 @Milind4profits @Rishikesh_ADX @position_trader

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