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What is the darvis box ?

The darvis box theory was created by Nickolas Darvis back in 1958 and what it does is...shows you exactly when to enter and exit stocks by using the personality of the stock, rather than a certain stop loss percentage like a 10% stop loss.

Each stock has its own personality because of the type of traders trading it, some slower moving stocks will attract conservative traders, faster moving stocks attract more risk type of traders, so therefore stocks follow the personality of the traders and what we want is a indicator that follows each stocks personality.

Nickolas Darvis realized that stocks move differently so therefore he had to learn how to trade them differently.

If he set a stop loss at say 10 % on this stock and it worked out fine but on the next stock it stopped him out and then the stock moved up right after he got stopped out, he realized that he could not have a rigid stop loss like that.

Nickolas Darvis developed the Darvis box theory and it really works for both entering and exiting stocks.

Lets look at it now --------below----------




What the Darvis box theory does is... shows you all the proper entry points to get in on a stock as it breaks out of the box to the top side and moves forward to create the next box or consolidation area.

Notice how the consolidation areas are not the same size The grey area is the consolidation area on the chart above.

So therefore the DARVIS BOX works better than a set rigid stop loss because it is based on the personality of each stock.

It also shows you were to put your stop loss at each bottom of the box but not until the new box is made then you move your stop loss to the bottom of the box before the new box.

By doing this you will never get out of a stock to soon and you will let your winners run as long as they are moving up.

However if your stock drops below the bottom of the last box up you then will get stopped out and that is a good place to get stopped out. Perhaps the run is near the end or over.



Nickolas Darvis became very famous after he wrote his first book " How i made $ 2,000,000 in the stock market " and once got a phone call from someone in new york who asked him to start a mutual fund called " The Darvis fund " and he could be the head of it, he refused knowing the games that are played with people`s money in the way of all the fees etc...

Mr Darvis also wrote another book called " the other Las Vegas " in which he points out how the stock market really works with the head boss to the dealers and finally to the players.

He says that in 1962 one exchange alone made more then $ 2 million dollars a day in commissions by making sure stocks moved up and down causing more buying and selling and alot more commissions.

Wall Street is rigged !