Stock Selection
His main source of stock selection was from Barron's Magazine. The magazine was usually a week old edition since he was traveling throughout the world performing his dance troupe. He would use cables and telegrams to send his buy and sell stop orders to his broker in New York. From now on Darvas would select a stock when it made a good advance on strong volume, with favourable fundamental company research.
This method also showed Darvas insights into a stock's price behaviour, often revealing the signs of ‘inside buying’ before a company's release of favourable news to the public.
His famous stock selection method was called "BOX theory." He considered a stock price wave as a series of boxes. When the stock price was confined in a box, he waited. He bought when the price rose out of the box. He simultaneously set a stop-loss just under this trade price.
Read more about this topic: Nicolas Darvas
Famous quotes containing the words stock and/or selection:
“After supper she got out her book and learned me about Moses and the Bulrushers; and I was in a sweat to find out all about him; but by and by she let it out that Moses had been dead a considerable long time; so then I didn’t care no more about him; because I don’t take no stock in dead people.”
—Mark Twain [Samuel Langhorne Clemens] (1835–1910)
“Judge Ginsburg’s selection should be a model—chosen on merit and not ideology, despite some naysaying, with little advance publicity. Her treatment could begin to overturn a terrible precedent: that is, that the most terrifying sentence among the accomplished in America has become, “Honey—the White House is on the phone.””
—Anna Quindlen (b. 1952)