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Nicolas Darvas: the dancer who traded stocks by telegram

In the late 1950s, a professional dancer touring the world's nightclubs traded the US stock market with nothing but a daily telegram of prices. His 1960 book said he'd turned his savings into $2 million. Months later, New York's attorney general said that claim was false.

Story · 7-minute read · Updated 2026-10-21

Who they were

Nicolas Darvas was born in Hungary in 1920. During World War II he left the country, by his own account on false papers, and later built a career as a dancer.

He performed with his sister, Julia, as a ballroom dance act. They toured nightclubs and theatres around the world.

By his own telling, he came to stocks by accident. In the early 1950s a nightclub offered to pay him in shares of a small Canadian mining company instead of cash. The deal fell through, but he bought the shares anyway. Their price rose, he sold, and he was hooked.

What happened

Early losses

His first years in the market, in his book's version, went badly. He followed tips from friends and newspapers. He listened to rumours. He bought what other people were excited about. Mostly, he lost.

So he started keeping records of his own trades, and studying what had worked and what hadn't.

The box

Darvas noticed that stocks often moved up in steps. A stock would rise, then bounce around inside a price range for a while, like a ball in a box. Then it would break out to a new range above, and form a new box.

His rules, as he described them:

• Buy when a stock breaks above the top of its box, with rising volume.
• Place a stop order just below the box. If the breakout fails and price falls back, the stop sells automatically.
• If the stock keeps climbing, move the stop up under each new box.

The idea is close to what's now called a breakout from Consolidation.

Trading by telegram

On tour, he couldn't watch prices. So his broker sent him a daily telegram or cable with the prices of the stocks he followed. He traded from that and nothing else.

He came to see the distance as a gift. Without the noise of tips, chatter and minute-by-minute prices, he made calmer decisions.

The book and the dispute

In May 1959, Time magazine ran a story on him. In 1960 he published How I Made $2,000,000 in the Stock Market. In it he said he'd turned an investment of about $36,000 into more than $2 million in about 18 months. Retellings give different starting amounts.

The book became a bestseller. Its popularity was linked to a change in rules: the American Stock Exchange stopped accepting some kinds of stop orders for a time, as readers flooded in with them.

In December 1960, New York Attorney General Louis Lefkowitz moved against the book's publisher and Darvas. His office said in an affidavit that the book's central money claims were false, and that it left out many trades and loans. In January 1961, Time reported that a court had ruled the attorney general's investigation improper.

So the famous number has never been settled. It was challenged in public, and the challenge was stopped on legal grounds, not proven or disproven on the facts.

The moment everyone remembers

The picture people remember: a dancer in a hotel room on the other side of the world, reading a telegram of stock prices, placing an order and going back to rehearsal.

It's a striking image of trading from a distance. He wasn't glued to a screen. He had a few rules and a stop under every position, and he let them do their work.

What it teaches

1. Every position needs a stop

Darvas's stop below the box was the core of his method. If a breakout failed, the loss stayed small. Our guide on how to set a stop loss covers where to place one, and the position size calculator turns it into a size.

2. Less noise can mean better decisions

He did better, by his own account, once he stopped listening to tips and stopped watching every tick. You don't need to watch charts all day. A few clear setups, checked at set times, is a plan. See trading with a full-time job.

3. Breakouts fail, which is why the stop comes first

Many breakouts fall back into the box. Darvas's method only worked because the failures were cut quickly. Our breakout vs fakeout guide shows the body-close test we use to tell a real break from a poke.

4. Keep your own records

He learned by studying his own trades, not other people's tips. A trading journal is the modern version.

What it doesn't mean

It doesn't mean the $2 million figure is a fact. New York's attorney general publicly called the main claims false. The matter ended on legal grounds. Treat the number as his claim, not a record.

It doesn't mean his method made the money. He traded during a strong rising market in the late 1950s. Critics have long said a rising market did much of the work, and many people who copied his boxes later didn't do as well.

And it doesn't mean you can trade from a telegram now. Markets today move faster. What carries over is the simple part: a clear rule to enter, a stop under every position, and less noise.

Timeline

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