The Darvas Method

[satorino]

People might be interested in reading my exchange on the darvas boxes with gerryco.(it shold be read from the bottom if you are interested in the chronology of the discussion)
Good trading to all


From: "jim" <[e-mail]> / This is Spam / Add to Address Book
To: "franky boy" <[e-mail]>
Subject: Re: darvas boxes
Date: Sun, 2 Feb 2003 17:17:40 -0600




Franco,

No problem about posting my reply.

As soon as the price "violates" the top of the box, or the bottom of
the
box, you close out the current box, and start building a new box...

Lets say you purchased the stock at $10, and your current box is 22/27.

If the price exceeds 27, keep you stop-loss at 22, for now. TREAT
TODAY AS
DAY ONE, and start looking for a new box top using today's high and
low. In
no less than three days (including today), you may have a new box top.
After you have a box top, start looking for a box bottom. When you
have a
firm bottom (you now have a new box), move your stop-loss to the new
box
bottom.

If you have the same box, 22/27, and you own the stock, you should have
a
stop-loss set at 21 15/16. Right?!?! If the stock hits 21 15/16, your
broker will automatically sell your stock. Well, you have no shares,
TREAT
TODAY AS DAY ONE, and start looking for a new box top using today's
high and
low.

Regards,

Jim

----- Original Message -----
From: "franky boy" <[e-mail]>
To: "jim" <[e-mail]>
Sent: Sunday, February 02, 2003 4:22 PM
Subject: Re: darvas boxes


> Jim,
>
> Thank you so much for your kind reply. I see your
> point.
> I have two further questions:
> The first is that if you do not mind I would like to
> share your reply on the darvas message board. People
> might like reading it.
>
> The second is that it is not really clear to me how to
> construct the next box when the prices violates the
> present box on the down side. Do you revert to the
> previous lower box or do you have a system to
> construct a new one?
>
> Thank so much for your kind attention and apologies if
> I took too much of your time.
> Best regards,
> Franco
>
>
> --- jim <[e-mail]> wrote:
> > Dear Franky-boy,
> >
> > Darvas' explanation is vague, and I assume you can
> > interpret this both ways.
> > I'll even go as far as to say, I could be wrong (in
> > a classical Darvas
> > interpretation), but... (and this is one big but),
> > Chun-Li needs to put the
> > system to work. Here's the bottom line, and let's
> > see if you agree...
> >
> > Would you rather have a box with a bottom of $20,
> > and a top of $27 or would
> > you rather have a box with a bottom of $22, and a
> > top of $27?" Let's put
> > the concept in terms of MONEY. People seem to
> > understand money a lot
> > better. If you purchased the stock at $10, do you
> > want to sell at $22 or
> > $20? I'd rather have my stop-loss set at $22 rather
> > than $20. I guess
> > Chun-Li would rather have his set at $20... Go
> > figure.
> >
> > Regards,
> >
> > Jim
> >
> > ----- Original Message -----
> > From: "franky boy" <[e-mail]>
> > To: <[e-mail]>
> > Sent: Sunday, February 02, 2003 7:58 AM
> > Subject: darvas boxes
> >
> >
> > > dear Gerry,
> > >
> > > I hope this message finds you well. And thank you
> > for
> > > your explanation of the Darvas boxes which was
> > quite
> > > useful to me.
> > > I have been trying to figure out more about the
> > system
> > > and I have been reading several sites on the
> > matter.
> > > For instance there is a good site on Ihub which
> > has
> > > some interesting postings. The best ones are athe
> > > following in my opinion:
> > >
> > >
> >
> http://www.investorshub.com/boards/read_msg.asp?message_id=595318
> > >
> >
> http://www.investorshub.com/boards/read_msg.asp?message_id=593385
> > > But for you very important is this:
> > >
> >
> http://www.investorshub.com/boards/read_msg.asp?message_id=594693
> > >
> >
> http://www.investorshub.com/boards/read_msg.asp?message_id=595099
> > >
> > > The last two seem to contradict somewhat your
> > > approach.
> > > I would very much appreciate to learn what you
> > think
> > > about it, if you care to comment.
> > >
> > >
> > > Thank you and best regards
> > > Franco

satorino