As a self-proclaimed student of Darvas, he may have very well been buying/selling into any type of market -- he simply didn't care.Originally Posted by nickola.pazderic
What is most important about his strategies (in my opinion) is that you place your stop losses without wavering. His success was attributed (in part) to raising those stops as profits were attained. He didn't care about the instrument -- had he the ability to trade TZA he would have in a down market, as it clearly has departed a weekly box from the upper right corner at 57.90, a daily box at 54.93, as well as smaller-interval boxes. His time frame was on the daily close, so emulation at least on this time frame could be a worthwhile goal (and many, including myself, attempt this on an ongoing basis).
The primary concept behind Darvas' methodology is to catch a new breakout in a trend. A trend. We haven't had many long ones on a daily basis as of late, but in terms of swing trading on a 15m/30m/60m bar basis we have been able to capture these trends in the present climate. Darvas didn't have access to intraday quotes while on the road, but since we do, and since his methodology is not limited to time frames, we certainly can (and do) play the intra-day game.
Darvas had a beautiful sophistication in his methodology that I think stemmed from his right-brain dominance. Myself, as a trained engineer and scientist, lack this ability to abstract risk away such as he did (recall that he would often place a single (large) order and simply let it ride), and hence, I find it difficult to grasp (psychologically) his methodology with my complete portfolio and simply "do as he would have".
We must all define and walk down our own paths -- I'm only trying to do so following the broken branches and trodden ground of those before me.
Futures are down another -1% as I write... it's going to be an interesting day on the short side ...
Regards,
pgd
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