In a simple word, the Darvas Box indicator tells you, in range-bound market share price trading in a range. after breakout or breakdown of the share price from the ranging market, this will be a trending market. D Box indicator will help you to find breakout and breakout and breakdown points.
What Darvas box indicator tells you,
- D box will appear in a range-bound candle where candle formation is range bounding.
- if this box high is low this means the stock price is less volatile.
Darvas box indicator setting
- ATH Lookback Period: 100.
- Exit Field: is closing price will take to calculate this indicator.
- Ghost Boxes: check/uncheck to enable /disable ghost box.
- Stop Levels: check/uncheck to enable / disable stop levels.
- Level offset: 0.01 offset of the stop levels line.
- Price Minimum: By default its 5.
- Volume spike: by default its unchecked.
- Volume % of average: by default value is 400%.
- Darvas: this is darvas box color.
- Ghost: this is for ghost box color.
- Level: Level color.
The default setting Is good using this indicator.
Darvas box indicator trading strategy
- When share D Box formed this means market is in range-bound, and you have to wait for some time. When share price will break D Box then you can enter to stock. It can be breakout or breakdown.
- if share price gives breakout from the D Box then you can buy stock.
- If share price Gives breakdown from D Box then you can sell the stock.
- When Stock is ranging Bound & if D Box height is low, this means the stock is less volatile. In less Volatility, if the stock price breaks the D Box then the trend could be for a long time. So that more long trend means more profit.
- similarly, More volatile Box generally gives a short trend.
Conclusion
Nicolas Darvas invented the Darvas Box indicator. This will helps when the market entering to trending market. so that you can enter to stock at the start of the trending market.
If share price falling after the breakdown of the D box, this is the sell signal. if share price rising after the breakout of the D box.
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