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:
“I met a Californian who would
Talk California—a state so blessed
He said, in climate, none had ever died there
A natural death, and Vigilance Committees
Had had to organize to stock the graveyards
And vindicate the state’s humanity.”
—Robert Frost (1874–1963)
“It is the highest and most legitimate pride of an Englishman to have the letters M.P. written after his name. No selection from the alphabet, no doctorship, no fellowship, be it of ever so learned or royal a society, no knightship,—not though it be of the Garter,—confers so fair an honour.”
—Anthony Trollope (1815–1882)