Darvas trading technique is based on his method of a new trend detection.
Method of charts analysis developed by Nicolas Darvas is very popular in Europe and USA. Darvas trading technique is based on his method of a new trend detection. Buy signals are generated at the moment the bullish trend is confirmed and stop levels are set at the same time. Darvas used his method for trading on day charts. Therefore, his method almost ideally suits the traders with full-time jobs.
Darvas used a special filter for his work - Darvas Box. It helped Darvas to determine the importance of various market movements. The filter consists of the upper and lower borders of the area.
The brief method description is as follows: we should buy in case of the upper border breakout. At this very moment a stop level under the lower border is installed. In case a new area is formed, the stop levels are moved under the lower border of the new area. The reverse situation is for selling.
Author: Nikolay Kositsin
Darvas Box Technical Indicator
Developed by Nicolas Darvas
Nicolas Darvas is a famous Forex trader who made 2 million dollars
trading the stocks market. Darvas started with an account of 10,000
dollars and made a profit of over 2 million dollars.
This is one of the trading methodologies that Darvas combined to form
his stocks trading system. Along with this trading methodology Darvas
made accurate trading decisions.
This trading method is used to generate trading signals based on a simple breakout strategy of the Darvas Box lines.
If the price of a currency pair breaks out at the top box line , then this is a bullish signal
If the price of a currency pair breaks out to the lower line, then this is a bearish trading signal.
The example below shows a bearish signal generated from the Darvas Box Indicator.