Profitable Trader

But what is excellent about him and this book - is his "cut losses quick" attitude. In the whole book, only once he got stuck in the position hoping that it will reverse and he exited losing EIGHTEEN PERCENT!!! His normal loss would be $.50-$1. Tell this to people who bought Nortel and still holding it. It took me 2 years of heavy losses to learn to always have a stop. And he seemed to have achived it so lightly and so effortlessly!!!

Another thing that he adheres to religiosly - "let your profits run" (with proper trailing stop of course).

And these 2 rules really what puts apart a profitable trader and an unprofitable one.

There seemed to be considerable falsification by omission. While Darvas proudly wrote of the profitable trades he had made, the investigation revealed a number of loss-making trades made by Darvas which never appeared in the book. If the loss-making trades made by Darvas - which never appeared in the book - were deducted from the profit-making trades - which did appear in the book - it was difficult to see how Darvas had made 2 million dollars in the stock market ... if he had made anything at all!Furthermore, the 'box system' which he claimed to have discovered bore a strong resemblance to a system advocated by the king of all speculators, Jesse Livermore, in his one and only book, The Livermore Key. One of the reasons that Livermore took his own life was the fact that the methods outlined in his book were no longer feasible in the United States following the introduction of the Securities and Exchange Commission and the imposition of various restrictions on share dealings.

By the time How I Made Two Million Dollars in the Stock Market was published, people had forgotten all about Jesse Livermore. Livermore had become the anti-hero of a bygone era along with the Crash of '29. After studying the findings of the Darvas investigation the Attorney General launched a criminal action against him, alleging that certain statements he had made were fraudulent. Darvas's legal advisers countered with an action against the Attorney General and the United States for defamation of character. Lefkowitz decided the public interest would not he served by embarking on a long, tedious and complicated trial that was likely to give Darvas even more attention than he had already received. He therefore decided to drop the criminal action on condition that Darvas withdrew his action, giving an undertaking never to transact any type of securities dealings in the United States, or to become in any way involved in the US securities industry. Darvas agreed. He then left the United States to become an exile in Europe.