The Darvas Box Trading Strategy
A Detailed Thread 🔖 + 1 Book Give Away !
Rules For Giveaway :
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About Darvas :
In the late 1950s, Nicolas Darvas was one half of the highest paid dance team in show business.
Darvas turned a $36,000 investment into more than $2.25 million in a three-year period.
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It was on a two-year tour of the world that he initially developed his ‘Darvas Box’ method of screening stocks – a method of picking stocks based on the stock’s price and volume .
A Thread :
Using Concept of Support and Resistance
Using Minimum StopLoss
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THESIS:
📌We are looking for stocks that are in consolidation
📌These stocks when hit demand zone provide excellent Risk Reward opportunity
📌These will be all key moving averages hence will not be in momentum
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How to draw?
📌Look for stocks that are in consolidation for a very long time
📌Use Rectangle tool to make a range for the box from high to low of the price
⌛️Keep alerts at higher point of support and Buy when the alerts hit .
📌We are using the simple concept of Support. 3/n
Top 6 Rules of #PaulTudorJones
Who is Paul Jones ?
Paul Tudor Jones II is an American billionaire hedge fund manager, With net worth of around $8 Billion .
Famously known for predicting the Black Monday in 1987, during which he tripled his money on his large short positions
1."Look for tremendously skewed reward-risk opportunities"
Rather than focusing on win rate , Focus on Risk Reward
A risk Reward > 1:2 is always favourable for trader
2. “There is no training, classroom or otherwise, that can prepare for trading the last third of a move, whether it’s the end of a bull market or the end of a bear market.”
No Strategies can be copied , until the trader himself has his own observation and experience and applies
To make money in stocks, you must protect the money you have. Live to invest another day by following this simple rule:
Always sell a stock if it falls 7–8% below what you paid for it. This basic principle helps you cap your potential downside.
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And it is the simplest way to make sure you never let a small loss become a BIG one.
Why 7–8%?
The 7–8% sell rule is based on an ongoing study covering over 100 years of stock market history. Even the best stocks will sometimes breat out and then drop slightly below their buy
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When they do, they typically do not fall more than 8% below it. If your stock does decline more than 8%, it usually means something is wrong with your chosen entry point, the company, its industry, the general market, or all of the above.
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Tools used 1. HeikinAshi charts 2. 200 ema (black)for Dynamic support and reversal point 3. 21 ema(red) for trailing stop loss 4. Volumes 5. Your own confirmations and modification
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