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Strategies & Market Trends : The Darvas Box Thread - Using the Nicholas Darvas system
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To: darvasboxes who wrote (485)7/1/2005 11:54:33 AM
From: Bob V  Read Replies (1) of 498
 
Tight stops create too much whipsaw and psychologically I just can't handle for these whipsaws....

That’s a tough one. Have you reviewed your trades to see what would have happened if you had taken the losses from the tight stops and reentered the trades if they came out of the box again? I assume you are using stop buy and stop sell orders?

My personal experience: After 2 losing years I decided that before I could make money I had to stop losing money. I started using very tight stops. The theory being that if the stock took off as soon as I sold it, all I had lost was opportunity. However if it kept going down I would either sell it at a greater loss and lose money or try and justify my mistake by turning it into a long term investment, tying up my trading capital.

It’s said that most people lose money because they are more afraid of selling and missing a move than they are of losing money.

There must be a “Murphy’s Law” that states that a falling stock will not reverse until you sell it.

If you feel bad because you sold a stock for a 1% loss and it went back up right after you sold it, imagine how bad you will feel when you have a 10% loss and it does the same thing.

For what its worth I haven’t had a losing month since I changed strategies last October. I have fewer winning trades than I have loser. Running about 40% winners.

Good trading;

Bob
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