Billion Dollar Baby, page-134

I also have the Darvas book in my trading library. I haven't yet used his box breakout method. But the idea of buying new 26 or 52 week highs is consistent with what he did. The first half of the Darvas book describes what virtually every trader goes through after starting out. This is the beginner's cycle of losing money, buying stocks in downtrends, listening to mainstream financial media, averaging down, taking profits too soon, not having a stop loss, excessive large position size, etc. Darvas was fortunate to have above average intellect coupled with humility. Hence he was able to reverse engineer why he lost money in the beginning.

A stock like NEA, JIN, ALU, APX, BVS, IEL, or RMD is best initially viewed on a monthly chart. Note that there is no previous price overhang. They are all in blue sky territory free of any previous chart resistance. These are the growth stocks that repeatedly make new 52-week highs, consolidate sideways, then eventually go higher. The top 5% long-term gainers from within the ASX 500 have a similar long-term chart appearance. They are model or archetype stage 2 uptrend charts. But just because a stocks breaks out, it doesn't always keep going up. Some may retrace 20% before going up again. Some others keep going up. I keep a watchlist of all super performance stocks from within the ASX 500. I also scan for new 52-week highs at the end of every trading day.

The top traders have no more than 25% of their available trading capital in one stock. So minimum 4 stocks in a portfolio. 8 to 12 stocks seems to be the best compromise.