How I Made $2,000,000 in the Stock Market
By Nicolas Darvas
A real-life story of a professional dancer who knew almost nothing about the stock market and turned a small trading account into a fortune. Darvas develops a simple yet strict trading method based on price movement, risk control, and iron emotional discipline.
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Book Summary
The book follows Nicolas Darvas, a professional dancer with no formal financial background, as he stumbles into the stock market and initially treats it like a casino. After a series of painful losses and emotional mistakes, he gradually develops his own method: combining growth stocks in promising industries with strict analysis of price and volume. Trading remotely while touring the world, far from the noise of brokerage offices, he creates his "Box Theory": stocks move in defined ranges, and a breakout into a new "box" signals a potential new uptrend. Using trailing stop-loss orders to protect capital and lock in profits, he learns to let winners run and cut losers quickly, all while detaching emotionally from individual stocks. Step by step, he turns a small account into $2,000,000 and discovers that the real battle is not against the market, but against fear, hope, and greed inside the trader.
Key Points
The dancer turned trader
Darvas arrives at Wall Street as an outsider and proves that discipline and clear thinking can beat experience.
Wall Street as a casino
The market is full of noise, rumors, and "experts" who profit mainly from commissions.
Box Theory
A stock trades inside a "box" (price range), and only a breakout above justifies a new position.
Distance as an advantage
Trading via cables from hotel rooms helps him stay calm and objective.
Aggressive risk control
Every trade starts with a predefined exit point, no negotiation.
Techno-fundamentalism
First find strong industries and fundamentally sound companies, then apply technical timing.
Learning from losses
Each losing trade is analyzed, documented, and turned into a rule for the future.
Core Principles
Wall Street behaves like a casino; without a clear method, you are gambling, not investing.
Consistent success cannot rely on luck, only on rules and accumulated experience.
Emotional control over fear, hope, and greed is essential before any technical method.
There are no "good" or "bad" stocks – only rising and falling ones.
Hold only rising stocks and sell quickly those that start to fall.
Profits must be much larger than losses, or commissions and mistakes will eat the account.
Losses must be limited in advance, often to less than 10%, via strict stop-loss orders.
Profits are a function of time – strong stocks need time to develop.
Focus on growing, dynamic industries rather than random companies.
In each strong group, look for the true leader stock.
Stock selection should combine strong fundamentals with clear technical signals.
A stock's quoted price is the only real measure of its value in the market.
It is better to buy "expensive" stocks making new highs than "cheap" falling ones.
Noise, rumors, and tips are dangerous distractions and should be ignored.
Automatic stop-losses also protect against broad bear markets.
Documenting and analyzing every loss is a key part of the method.
Important Insights
A stock's small reaction inside an uptrend is like a dancer bending before a higher jump.
Physical distance from brokerage offices can be a powerful psychological advantage.
The trader's ears are often his worst enemy; too much talk destroys clarity.
Sudden volume spikes with rising prices often signal informed buying.
Systematic stop-losses can pull you out of the market before major bear phases.
"Conservative" investors who hold falling stocks out of hope are in fact pure gamblers.
Practical Lessons
Define your exit level before entering any trade and do not move it emotionally.
Use trailing stop-loss orders to protect gains as the stock rises.
Avoid brokerage floors and constant ticker watching.
Buy only stocks breaking into new high ground, not "cheap" laggards.
Confirm breakouts with meaningful increases in volume.
After each trade, write down what went wrong or right and turn it into a rule.
Closing Message
To truly succeed in the stock market, you must treat it not as a lottery but as a disciplined battlefield: focus on strong growth stocks, enter only on clear price breakouts, and manage risk with strict stop-losses and emotional detachment.