Thread by @SJosephBurns

10 lessons from the book: “How I Made $2,000,000 in the Stock Market” by Nicolas Darvas

A thread 🧵 👇

“There are no good or bad stocks, there are only rising and falling stocks.”

“I did not know it but I was already coming up against one of the great pitfalls of the small operator—the almost insoluble problem of when to enter the market.”

His answer was to entry on breakouts of momentum to the upside in stocks in uptrends.

“The truth was that as my pocket had strengthened, my head had weakened.”

Egos and emotions will destroy your ability to follow your strategy, stick to your plan.

“I listened eagerly to what they had to say and religiously followed their tips. Whatever I was told to buy, I bought. It took me a long time to discover that this is one method that never works.”

Talking heads & stock pickers are not the path to profitable trading, an edge is.

“Like human beings, stocks behave differently. Some of them are calm, slow, conservative. Others are jumpy, nervous, tense. Some of them I found easy to predict. They were consistent in their moves, logical in their behavior. They were like dependable friends.”

“There is no reason to sell a rising stock.”

He only sold when his trailing stop loss was triggered, creating massive wins in bull markets.

“I believe in analysis and not forecasting.”

He studied charts and traded momentum price action signals.

“Buy high and sell higher.”

He bought momentum at the moment of the breakout and sold at the end of a trend when it began to bend.

“I decided never again to risk more money than I could afford to lose without ruining myself.”

He traded only with speculative capital and position sized right.

“First check whether the market as a whole is rising or falling. In other words, are you in a bull market or a bear market? If the latter, stay out. The odds are against you.”