How I made 120% in the stock market in 6 weeks - working a day job!
Copyright 2006 http://darvas-investing.chambers-media.com
Hi - let me introduce myself. My name is Alex Chambers. I'm a UK medical doctor who has an interest in the stock market. I use a system first invented by a dancer called Nicolas Darvas in the 1950's. He made $2,000,000 working part-time - whilst travelling round the world on a dancing tour.
Why am I telling you this? Because his methods still work today. And they are deceptively simple to use. I used them to snag a lovely 120% gain on TZOO (NASDAQ) in 6 weeks in 2004 - using weekly data only and working my day job.
Nicolas Darvas was one half of a dancing team in the 1950's called Julia and Darvas. Dancing was his day (or night) job. His dance team was one of the highest paid dancing acts in the world and Nicolas Darvas was successful in almost everything he did - this includes playing championship table tennis and creating crossword puzzles.
However, the stock market was his true love and it is this that really fascinates me about the guy. He was self-taught in the market but managed against all odds to accumulate a fortune, working part-time, of just over $2,000,000 in 18 months. Nicolas Darvas started from a stake of about $25,000 and made his fortune whilst travelling round the world on various dancing commitments.
Darvas detailed his exploits and how he created his system in his classic 1963 text, "How I Made $2,000,000 in the Stock Market". It's a great read and I highly recommended it. Many investors regard the text as a classic. In it he provides an honest and open look at his experience from his naive start to his eventual success. He lays out, in great detail, exactly what he did and how foolish some of his actions were. Then he explains how he came to find success by focusing on the price and volume action of stocks.
A key message of his strategy is as quoted as follows:
"...My only sound reason for buying a stock is that it is rising in price. If that is happening, no other reason is required. If that is not happening, no other reason is worth considering..."
Sounds simple eh? The only other investor I know of before Darvas who used such a strategy was the legendary Jesse Livermore.
Also, remember that there was no internet in the 1950s and Darvas had to rely on outdated information in the form of a newspaper and daily telegrams on selected stocks to acquire information for his trading system. His broker mailed a copy of Barrons newspaper each week which contained weekly prices of stocks together with volumes for the week.
Darvas used a top down approach to investing - he only watched stocks from futuristic industries. In the 50's these were credit card industries and the jet age. Darvas realised that the expectation of earnings was one of the greatest lures to raise stock prices higher, and together with the futuristic industry screen, these were the only fundamental factors used in his Darvas Trading System. Today all you have to do is log onto Yahoo.com, go to Finance, and all this information is free.
Once he had satisfied his requirements for fundamentals, he tracked technical data in the stock. He liked stocks that were:
1) At or near their all-time high
2) Bouncing up and down in their "Darvas Boxes" (trading ranges - see below)
3) Had "Boxes" stacked on-top of each other like a pyramid
4) Showing an increase in volume with advancing prices
5) Priced greater than $10
He used "Darvas Boxes" as a way of entering and exiting stock positions. These are in essence a definition of a high and low trading range. A buy signal was created if the price just pushed through the top of a Darvas Box and the price reached a new all-time high. He used stop losses at the low of the trading ranges to protect the downside, and raised the stop loss as new higher boxes were formed. I believe Darvas was the first to use stop loss orders in such a way, and many financial institutions today still use Darvas Boxes as trading ranges, albeit on a smaller time scale.
That's essentially it. The story is utterly remarkable and has placed Darvas in the legends of investing history. If you're interested in more details and about how I use his system, please check out my website. All information is free.
To your stock market success also, Alex Chambers
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Alex Chambers is a UK medical doctor who likes to buy & sell profitable shares. He also likes to go out dancing and lie around in bed, as well as enjoy the company of ladies.
http://darvas-investing.chambers-media.com
Leverage Balance Transfers
The competition is alive and well between credit card companies, every company is working hard to invent new and exciting ways of attracting applicants to apply for a credit card with their company. No matter where you go, you will likely be given some sort of offer with any number of credit cards. For example, a credit card could inform you that they will offer you an unheard of interest rate with for an extended period, or another could offer you rewards of cash back on any item you purchase using their credit card. You will see these types of attractive advertisements often, you should bear in mind however, that even though these offers may sound extremely good, typically they do not offer these things for the consumers interest, instead they offer them to attract business.
Consumers often benefit from the fierce competition between credit card companies. Studies show that the average United Kingdom resident owes approximately £1,140 in debt with credit cards. Typically, this is for one or more cards and each card will carry a unique interest rate. The competition has led companies offering credit cards to offer a balance transfer at a 0% rate, this is in hope that they will attract consumers to apply for their credit card and transfer their existing debt onto theirs.
You may be wondering, what exactly is a balance transfer? This is the practice of taking the balance you owe on one card and transferring it to another. Typically, this is done to help you save money on the amount of interest you currently pay on the debt. Now before you run out and apply for that credit card that offers a 0% balance transfer you should be aware that usually that rate is only a promotional one. You will want to make sure that you understand what the rate will be once that promotional rate ends, as well as understand how long you have to pay the payments interest free.
Another thing you should do, is compare the cards that offer them, the reason for this is that one card could offer a longer balance transfer term than another. The ideal card will allow you enough credit that you will be able to transfer all of your existing debt to one card. This will allow you to have only one payment monthly with 0% interest. In essence, you will be able to pay the debt off at a faster rate because none of the payment is applied towards interest.
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Credit Card Security Measures
The chip and pin security features that credit cards offer is a very secure and simple integration that makes using a credit card safer and easier. This security works in way that allows the user to enter a PIN (personal identification number) during checkout. This is a wonderful security feature because with chip and pin security the instances of forged signatures will be drastically reduced. Too often retailers fail to make the effort of comparing signatures during check out, with this security feature without knowing the PIN a purchase cannot be made. CPS is excellent because even if your card were to become lost or stolen, unauthorized purchases could not me made since they would not know the PIN.
The credit cards that have implemented this feature, embed a chip directly into the card. This chip contains the PIN within it, when you arrive at any establishment in person, to make a purchase you will be required to enter the pin into a number pad provided to you at check out by the retailer. The credit card machine will then confirm that the chip has the same number embedded as the one you provided.
One specific drawback of the chip and pin security is that the added security does not prevent unauthorized withdrawals at an ATM. Even though a stolen card would be difficult to use in a retail setting for purchases, the added security will not apply to a thief wanting to withdrawal money using the cash machine. Additionally, not all retailers have adapted to this new security. At some retailers the chip and pin security will not make a difference, you may still be required to sign a receipt.
These new security features with a credit card, once adapted by all retailers will be an excellent deterrent for theft of credit cards, as well as identity theft. The instances of unauthorized purchases and credit card thefts will decrease in a dramatic way, especially if they can somehow implement the security feature for ATM withdrawals and online purchases. The chip and pin security only seems to work with retailers that have the system adapted into their own machines. It does not work with ATMS or online retail settings because the card must actually be swiped and read.
Implementing the security feature to work with these settings will be an excellent method of theft deterrent and add additional safety to our world.
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