glennmercer

Darvas Boxes

Excerpt from TraderHQ: "Darvas Box is a great technical analysis indicator, with an interesting background and creator. Nicholas Darvas, a dancer by trade, made $2,000,000 in an 18-month period trading stocks using the Darvas Box method, while traveling the world on dance tours. The method is designed to capture emerging trends, and ride them for big potential profit, all while keeping risk contained."

Excerpt from Investopedia:
DEFINITION of 'Darvas Box Theory'
Darvas box theory is a trading strategy that was developed in 1956 by former ballroom dancer Nicolas Darvas. Darvas' trading technique involves buying into stocks that are trading at new highs. A Darvas box is created when the price of a stock rises above the previous high but falls back to a price not far from that high.

BREAKING DOWN 'Darvas Box Theory'
The Darvas box theory is essentially a momentum strategy. It uses market momentum theory and technical analysis to determine when to enter and exit the market, and it uses fundamental analysis to determine what to buy or sell. If the price breaks out of the box, it is a sign of a breakout. In this way, the Darvas box helps traders determine what price to enter and exit the market.
In 1956, Darvas turned an investment of $10,000 into $2 million over an 18-month period using this theory. While traveling as a dancer, Darvas obtained copies of The Wall Street Journal and Barron's, but he would only look at the stock prices to make his decisions. It has been said that Darvas was less happy about the profits that he made than he was about the ease and peace of mind that he got from implementing his system. Skeptics of Darvas' technique attribute his success to the fact that he was trading in a very bullish market. They also say that his results can't be attained if this technique is used in a bear market.

The Philosophy: What to Buy
The main idea behind Darvas' trading philosophy is to focus on growth industries. These are industries that are expected to outperform the market. Darvas selected a few stocks from these industries and monitored their prices every day. He looked for signs that the stock was ready to make a strong move. The main indicator he used to look for these signs was volume . A significant increase in volume increased the likelihood of a big move. Darvas looked for unusual volume on a handful of companies in industries he expected to grow.

The Trading Strategy: When to Enter and Exit
Once Darvas noticed unusual volume , he created a Darvas box with a narrow price range. The stock's low for the time period presents the floor of the box. The stock's high for the time period represents the ceiling of the box. When the stock breaks through the ceiling of the box, the trader is supposed to buy the stock. Likewise, when the stock goes below the floor of the Darvas box, it is time to sell."


Great trading strategy, and an indicator never before seen on TradingView!
Release Notes: New:
  • Customizable minimum breakout bars
  • Minor Bug Fixes
Invite-only script

Access to this script is restricted to users authorized by the author and usually requires payment. You can add it to your favorites, but you will only be able to use it after requesting permission and obtaining it from its author. Contact glennmercer for more information, or follow the author's instructions below.

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Comments

Could i use this scrip?
please thank you!
+10 Reply
Hi @glennmercer, can i try & read your code? Looks perfect for crypto (in bull market).
+8 Reply
Hi Glenn,
Can I try this script please?

Thank you!
+8 Reply
Hi there Glenn, it looks amazing!
Could you send the script for me please.

Thanks in advance
+5 Reply
Could I please get access? Thanks.
+4 Reply
please give access
+3 Reply
Hi ,

Can you give access to this darvas box
+2 Reply
Sir can i have the access please .thanks
+2 Reply
Hi Glenn, please could you let me access the script for this one ? I am trying to write a script for an overnight range breakout which I am currently having problems with so this would be an enormous help,

Many thanks !
+2 Reply
Hi Glen, I would like to try out Darvas Boxes V.1.0. Thanks for permission!
+2 Reply
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