The following is a book review by Stephen Burns.

I spent $150 on Wall Street: The Other Las Vegas to buy it used before this new version was published, and I have zero regrets about paying a premium to own this book. After reading over 150 books on stock trading and studying many of the greats, in my opinion Nicolas Darvas is one of the greatest stock traders there ever was.  No one that I am aware of has made more money in such a short span of time, while starting with such a limited amount of capital. His starting balance was only $2,000, yet his 1st stock quadrupled in a few months. Within a few years of trial and error, he turned $8,000 into $100,000 then finished out his final 18 months turning that into $2.4 million dollars. (This is about 13 million adjusted for inflation). He then cashed out because of a weak market and the lack of stocks meeting his trading criteria while avoiding the bear market of the early 60′s. On his journey he never lost any of his initial capital, only losing a portion of his previous winnings.

I love this book and his previous one because he gives specifics, including dates and quantity, combine with his exits. His books are bibles for trend followers and momentum traders. In this book he discusses how brokers and tip services make money off each generation of suckers in Wall Street and how to keep from being ripped off. I agree with his point that if your broker or the tip service were so great, they would be following their own advice and making a killing in the market instead of working and selling you services and information for a few dollars. It is very important to be very careful inside the Wall Street casino and not get conned. This book goes deeper into the details of exactly how to use his techno-fundamentalist system.

His varying methods of stock investment:

TECHNICAL

  • Only buy stocks that have consistently moved through established  price boxes.
  • Buy stocks as they move into higher boxes on increased volume.
  • Buy stocks breaking into all time new highs after coming out of a previous solid price box.
  • Set on stop buy orders to enable you to buy the stock as it breaks out of the box into the next one.

FUNDAMENTAL

  • Trade stocks in smaller companies with small floats to enable greater price appreciation’
  • Look for a greatly increased volume of trade and an increasing share price
  • Buy stocks in strong industry groups.
  • Buy stocks that have the greatest expectations of future earnings.

Even though this book has not been recommended by Willim O’Neal and IBD, they did recommend Darvas’s other book, “How I made $2,000,000 in the stock market“. It is an excellent companion book for followers of the CAN SLIM method of stock trading. Darvas encourages us to bet on the fastest horse with the best record, not to worry so much about the kind of hay it eats or spectators opinions.

I made $8,000 in one month using these methods and you will to. This book is a jewel in the ocean of stock trading books.

Warning: Although Darvas’s system can make you a fortune in the hottest stocks in the market or in a strong up trending bull market, be sure to stand aside in bear markets or range bound markets,  just like Darvas himself did and keep your profits.

Stephen Burns a trend follower and break out trader that specializes in the Darvas System. To learn more about him and his  trading style you can pick up his recent book at Amazon.com

Related Book Reviews:

Trade Like an O’Neil Disciple

One Good Trade by Mike Bellafiore Reviewed

Universal Principles of Successful Trading Review

3 Responses to “Wall Street: The Other Las Vegas”

  1. abdul Says:

    Appreciate your recommend. Many thanks.

  2. Jack Damn Says:

    Anyone know what kind of Stop Loss Darvas used (if any)? Percentage, points, trailing, fixed?

    Thanks.

    =^.^=

  3. franc Says:

    @Jack Damn… his stop losses usually began at 10% and raised them to reflect any gain.. According to Darvas, stop losses were probably his single biggest weapon to his success. In my opinion, his work is worth checking out If you are a momentum trader. His simple plan is easy to follow, clear and concise. and void of hype and self grandious statements. You won’t be disappointed!..
    Thanks Zentrader, for reminding me of this wonderful work!

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