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1 Darvas Boxes with Techni Filter Plus. 2 Disclaimer Brightspark does not have any knowledge of the investment needs or objectives of individual attendees.

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Presentation on theme: "1 Darvas Boxes with Techni Filter Plus. 2 Disclaimer Brightspark does not have any knowledge of the investment needs or objectives of individual attendees."— Presentation transcript:

1 1 Darvas Boxes with Techni Filter Plus

2 2 Disclaimer Brightspark does not have any knowledge of the investment needs or objectives of individual attendees. This Demonstration represents, training and information for attendees to use when evaluating and making investment decisions in light of their own individual investment goals and does not constitute specific advice. Technifilter Plus and this Darvas Box Implementation does not take into account the Investment Objectives, financial situation and particular needs of any particular person, and before making an investment decision on the basis of Technifilter Plus and this Darvas Box Implementation, a prospective investor needs to consider, with or without the assistance of a Securities Advisor, whether the advice is appropriate in light of the particular investment needs, objectives and financial circumstances of the prospective investor. Australian Financial Services Licence

3 3 Problems facing the Investor/Trader Which stocks to trade? Which stocks to trade? When to Buy? When to Buy? When to sell? When to sell? How much capital to trade with? How much capital to trade with? How much capital to allocate to a trade? How much capital to allocate to a trade? Confusing information from so called experts, insiders, magazines, Newspapers, tips … Confusing information from so called experts, insiders, magazines, Newspapers, tips …

4 4 Obstacles a trader must overcome No Plan of Action No Plan of Action Holding on to losers to long Holding on to losers to long Selling the winners to quickly Selling the winners to quickly Misconceptions about so called Blue Chips and long term investments Misconceptions about so called Blue Chips and long term investments Emotional involvement Emotional involvement Lack of discipline Lack of discipline Choosing the right tools Choosing the right tools

5 5 Blue Chip Stock? - HIH From $3.60 to 0.22c and then to 0 A Good Blue Chip long term Investment ?

6 6 Holding on for the ride Rocketed up from $0.90 to $18.35 Over 1900% increase in price in 12 months Crashed from $18.35 down to $0.28c Overstaying your welcome!

7 7 Is there a better way?

8 8 Charts & Technical Analysis Just as a medical team will study the charts of a patient…. You should monitor the health of your stocks and portfolio The charts are a historical road map of what has happened to a stock… But most importantly they also show the trend direction that the stock is moving in!

9 9 Whats the Trend UP or DOWN? ? ? Lets look at an easy to follow trend trading methodology

10 10 The legend of Nicolas Darvas Nicolas Darvas was a successful dancer who traded Stocks while touring the world in the 1950s He developed a trading methodology for buying the only strongly performing stocks He turned $36,000 into $2,000,000 in under 2 years with his methodology … Darvas Boxes

11 11 Buying High priced yet Cheap stocks He chose stocks that were performing strongly He chose stocks that were performing strongly Were in an industry with good growth potential Were in an industry with good growth potential He traded in a strong Bull market He traded in a strong Bull market All trades were protected with an initial stop loss All trades were protected with an initial stop loss Thereafter all profits were protected by trailing stops Thereafter all profits were protected by trailing stops

12 12 Darvas Boxes a Simple Methodology with Techni Filter Plus Takes Less than a Half an hour a day Takes Less than a Half an hour a day Both Buy an Sell Orders can be placed in market while it is closed – after hours Both Buy an Sell Orders can be placed in market while it is closed – after hours Takes the emotion out of trading Takes the emotion out of trading Only locates strongly performing stocks Only locates strongly performing stocks Filters can be adjusted to locate stocks based on: initial Risk, Value traded, Price range etc. Filters can be adjusted to locate stocks based on: initial Risk, Value traded, Price range etc.

13 13 Simple yet Clever Trading method Mechanical Trading System Mechanical Trading System Trade Stocks trading at their year high (250 days) Trade Stocks trading at their year high (250 days) A large volume spike in the last recent history A large volume spike in the last recent history Doubled in price in the last year Doubled in price in the last year The Entry point is defined in advance The Entry point is defined in advance The Exit point is defined in advance The Exit point is defined in advance Always use a Stop Loss Always use a Stop Loss Stop Loss Entry point New year High

14 14 Z The Darvas Box - Construction Box top and bottom defined well in advance 1. New Year High (Box) Top 2. Box High - Pull back for 3+ days 3. Box Low - Low not exceeded for 3+ days 6. Initial Risk can be assessed 4. Entry Level 5. Stop Loss level Entry Price $1.00 Exit Price $0.95 Initial Risk 0.05c or 5% EXAMPLE STOP LOSS ORDER PLACED IN MARKET ENTRY

15 15 The Darvas Box – In Action Stock makes a new year high and pulls back for 3 or more days – Entry point Stock makes a new year high and pulls back for 3 or more days – Entry point Forms a low which is not exceeded for at least 3 days – Stop Loss point Forms a low which is not exceeded for at least 3 days – Stop Loss point

16 16 Trading the Boxes Buy on Breakouts only Buy on Breakouts only Set Initial Stop Loss Set Initial Stop Loss Once a new box is confirmed raise the trailing stop. Once a new box is confirmed raise the trailing stop. Exit the trade when the trailing stop is hit. Exit the trade when the trailing stop is hit. BOX 1 BOX 2 BOX 3 BOX 4 Initial Stop Loss Raise Trailing Stop 1 Raise Trailing Stop 2 Raise Trailing Stop 3 Entry 1 Entry 2 EXIT

17 17 Stop Losses & Trailing Stops The main idea behind the STOP LOSS is to limit damage to trading capital The main idea behind the STOP LOSS is to limit damage to trading capital The main idea behind a TRAILING STOP is to lock in profits as the trade moves in our favour The main idea behind a TRAILING STOP is to lock in profits as the trade moves in our favour In fast moving markets Stop Loss & Trailing stops can be brought up to just under the Box Top to reduce loss potential or increase profit potential In fast moving markets Stop Loss & Trailing stops can be brought up to just under the Box Top to reduce loss potential or increase profit potential

18 18 The Darvas Box Set Up in Techni Filter Plus The Solid Red line is the Darvas Box Top The Solid Red line is the Darvas Box Top The Solid blue Line is The Darvas Box Bottom The Solid blue Line is The Darvas Box Bottom Traders can fine tune their Entries and Exits by adjusting the percentage above and below the bottom of the box suits their criteria BOX Top BOX Bottom Adjustable Trigger Adjustable Stop

19 19 The Techni Filter Plus Advantage In Minutes…. Scan the Entire Market (ASX has stocks) Scan the Entire Market (ASX has stocks) Filter and locate stocks in a Darvas Box Filter and locate stocks in a Darvas Box Filter and find stocks trading above a certain turnover E.g. >$1,000,000 Filter and find stocks trading above a certain turnover E.g. >$1,000,000 Filter for stocks below your maximum initial risk level (Difference between Entry and Stop Loss) Filter for stocks below your maximum initial risk level (Difference between Entry and Stop Loss) Filter and find stocks in a particular price range Filter and find stocks in a particular price range View the Charts, Save to a Watch list View the Charts, Save to a Watch list

20 20 New Darvas Real easy Simply type in numbers to: Simply type in numbers to: To run the market scans To run the market scans To view the Report To view the Report To view the charts To view the charts Its super fast!

21 21 The Darvas Setup Summarised Once a Box top and bottom are in place Once a Box top and bottom are in place A Potential trade can be assessed A Potential trade can be assessed Is the risk acceptable? (Difference between the Buy and Stop Loss) If the answer is YES? Is the risk acceptable? (Difference between the Buy and Stop Loss) If the answer is YES? Money Management rules should be applied Money Management rules should be applied A Contingent Buy order can be placed well in advance to catch the breakout! A Contingent Buy order can be placed well in advance to catch the breakout!

22 22 All the details are in the report The report indicates the following: Entry Price Exit Price Initial Risk % + more Potential Entry Price Stop Loss or Trailing Stop Initial RISK %

23 23 Sample Chart - Techni Filter Plus Trail the stop to lock in profits Trail the stop to lock in profits Raise the stop as each next higher box is defined Raise the stop as each next higher box is defined Exit the Trade when price falls below box bottom Exit the Trade when price falls below box bottom Stops can also be raised to just under the breakout to lock in profits on a strong move Stops can also be raised to just under the breakout to lock in profits on a strong move Exit Entry

24 24 Sample Chart No need to worry about what to do tomorrow… No need to worry about what to do tomorrow… The charts give you all the info needed to time your Entries and Exits.. The charts give you all the info needed to time your Entries and Exits.. Orders are placed in the market in advance Orders are placed in the market in advance 8.26 to % return from 28/07/03 – 11/11/03 Entry Initial Stop Raise Stop Current Stop Raise Stop

25 25 Sample Chart From.56 to /9/03 to 27/10/03 Over 80% Return (current price $1.01) Entry Initial Stop Raise Stop Current Stop Raise Stop

26 26 Sample Chart 8/10/03 $2.91 8/10/03 $ /11/03 $ /11/03 $ % Return 24% Return Entry Initial Stop Current Stop Raise Stop

27 27 Points to Note Not every stock breaks out of the top of the box, and keeps on running.. Not every stock breaks out of the top of the box, and keeps on running.. Some fall back in and then continue up Some fall back in and then continue up Some fall through the bottom the box - causing an EXIT of the trade (stopped out) Some fall through the bottom the box - causing an EXIT of the trade (stopped out) There are losses There are losses That is why all trades must be protected by predefined Stops to limit losses and protect profits and money management rules must be used to control risk and maximise profits! That is why all trades must be protected by predefined Stops to limit losses and protect profits and money management rules must be used to control risk and maximise profits!

28 28 Darvas Boxes – Bull Market Strategy Summary Most signals will be found in a Bull Market Most signals will be found in a Bull Market Easy used as a Mechanical system Easy used as a Mechanical system Positions can be added to Positions can be added to Logical approach Logical approach Removes emotion from the equation Removes emotion from the equation Can be used to locate strong performing stocks from small penny dreadfuls to the hi-cap stocks Can be used to locate strong performing stocks from small penny dreadfuls to the hi-cap stocks Easy to follow methodology Easy to follow methodology TIP: Cut losses short and let Profits Run Use Strict Money Management Rules

29 29 What is Techni Filter Plus? One of the Easiest to use and most powerful Technical Analysis Tools One of the Easiest to use and most powerful Technical Analysis Tools Scan & Filter the Market for trading Opportunities Scan & Filter the Market for trading Opportunities Back Test Trading Strategies Back Test Trading Strategies View Charts of Stocks View Charts of Stocks Monitor large numbers of stocks Monitor large numbers of stocks

30 30 How can Techni Filter Plus help you? Make informed decisions based on actual facts (Chart Price Action) Make informed decisions based on actual facts (Chart Price Action) Save you time Save you time Locate trading Opportunities – chart patterns and signals Locate trading Opportunities – chart patterns and signals Stop loss Positioning Stop loss Positioning Save you money – by cutting losses short Save you money – by cutting losses short

31 31 Secure On-line store Darvas! CD-Rom Filter Reports, Strategy Test, Chart Templates & 80 minute Tutorial for Techni Filter Plus NOW AVAILABLE Visit our On-Line Store to order

32 32 The End visit our home on the web Recommended Reading How I made $2,000,000 in the Stock Market by Nicolas Darvas Technifilter Manuals on Filter Reports and Automations Technifilter Multimedia Tutorials


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