VSATrader said:
Good idea with a Darvas thread.
If you want to know more about Darvas and his method, please read here:
http://www.nicolasdarvas.org/index.php
trendie
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this thread has incredible potential.
1: The box rules are absolutely clear, in ALL time-frames.
( as opposed to secret indicators, and special settings )
2: The trades can be easily, and objectively evaluated. ( data-quality permitting )
best of all;
3: Potential trades can be easily flagged in ADVANCE.
Point 3 alone can help newbies dip their toes in the water, and they will be able to see for themselves the trade forming, and have confidence to try, knowing more experienced traders are trading and posting D-Box trades.
Im sure, over a period of time, new nuances can be discerned, especially with so many eyes and minds trading so many markets.
Areas to discuss will be time-frames, and exits.
good luck with it VSATrader, and others.
1: The box rules are absolutely clear, in ALL time-frames.
( as opposed to secret indicators, and special settings )
2: The trades can be easily, and objectively evaluated. ( data-quality permitting )
best of all;
3: Potential trades can be easily flagged in ADVANCE.
Point 3 alone can help newbies dip their toes in the water, and they will be able to see for themselves the trade forming, and have confidence to try, knowing more experienced traders are trading and posting D-Box trades.
Im sure, over a period of time, new nuances can be discerned, especially with so many eyes and minds trading so many markets.
Areas to discuss will be time-frames, and exits.
good luck with it VSATrader, and others.
neil
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Darvas sources
Hi folks.
Here are some links relating to "Darvas Boxes."
Enjoy :cheesy:
http://www.elitetrader.com/vb/showt...22109&perpage=6&highlight=darvas&pagenumber=5
http://www.elitetrader.com/vb/searc...=1175770&sortby=lastpost&sortorder=descending
VSATrader said:
Hi folks.
Here are some links relating to "Darvas Boxes."
Enjoy :cheesy:
http://www.elitetrader.com/vb/showt...22109&perpage=6&highlight=darvas&pagenumber=5
http://www.elitetrader.com/vb/searc...=1175770&sortby=lastpost&sortorder=descending
JillyB
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trendie said:this thread has incredible potential.
1: The box rules are absolutely clear, in ALL time-frames.
( as opposed to secret indicators, and special settings )
2: The trades can be easily, and objectively evaluated. ( data-quality permitting )
best of all;
3: Potential trades can be easily flagged in ADVANCE.
Point 3 alone can help newbies dip their toes in the water, and they will be able to see for themselves the trade forming, and have confidence to try, knowing more experienced traders are trading and posting D-Box trades.
Im sure, over a period of time, new nuances can be discerned, especially with so many eyes and minds trading so many markets.
Areas to discuss will be time-frames, and exits.
good luck with it VSATrader, and others.
Ok, to put some time-frames to this. I am looking at trading the Darvas method based on a 5 min chart, however I have coupled this with various 'time zones' for breakouts. If a breakout occurs outside one of these 'zones' then I don't trade it.
For instance there is a time zone 9.10am - 9.15am (two candles here - the 9.10 & 9.15am - just to clarify positions).
Today there was a breakout on the 5 min chart at 9.05am - I didn't trade it, as it was outside the time 'zone'. It turned out to be a false breakout, with the main breakout happening 5 minutes later on the 9.10am candle and in the opposite direction.
What I'm trying to say here is that the Darvas method alone is not fool-proof and there are a number of false breakouts. But by trying to time these breakouts to known 'time zones' then the precentage win rate improves dramatically.
At the moment I have less than 4 weeks data on this though, so it is still work in progress, the time zones I have identified are
7.25 - 7.40am (4 candles on 5 min chart)
7.55 - 8.00am (2 candles)
8.25 - 8.30am (2 candles)
9.10 - 9.20am (3 candles)
9.30 - 9.35am (2 candles)
10.05 - 10.10am (2 candles)
10.50 - 11.05am (4 candles)
11.25 - 11.35am (3 candles)
12.20 - 12.40pm (5 candles)
13.00 - 13.10pm (3 candles)
13.55 - 14.00pm (2 candles)
14.20 -14.40pm (5 candles)
14.50 - 15.05pm (4 candles)
15.20 -15.35pm (4 candles)
Today these gave the following trades.
7.30am 5 pips
9.10am 10 pips
13.05pm 20 pips
Generally I try to take 5 pips from a trade, unless the candle is pushing through the breakout with some momentum. It seems the best breakout times for momentums are 9.10 - 9.20am, 12.20 - 12.40pm and 13.00 -13.10pm.
Perhaps Baruch may be able to enlighten me as to whether these are major news times.
JillyB
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indexgold said:
I totally agree, it isn't the Holy Grail - because there isn't one anywhere. No method, or strategy is 100% accurate and reliable. All you can ask for is that it's a percentage stacked in your favour.
Also you are correct about Darvas too, there was a certain amount of 'luck' in his trading and the leverage he obtained. Also the stocks he selected such as Texas Instruments - where he got in on the ground floor, so to speak.
A good strategy is what I'm looking for - one that gives some meaning to the Cable. I have struggled to understand it for so long - it doesn't behave like the Dow, or like a stock and none of the strategies I used would work on it. So I left it alone - until I found Darvas boxes and found that I could identify areas of consolidation ahead of a breakout. (That's all Darvas is really - areas of consolidation). These coupled with various 'time zones' to avoid false breakouts, seems to give a simple strategy that (isn't fool proof, or the Holy Grail) but certainly has a lot going in its favour.
Are D-Boxes better than other techniques ?
Trendie
I would appreciate it if you could elaborate on some points about Darvas. Darvas fans seem to have a tendency to litter their postings with URLs to other sites, so a summary reply to my points/questions would be appreciated rather than further links.
It seems to me that, in summary, they are a cross between support/resistance lines and congestion patterns. For example on the chart shown in post 5 we could have drawn a classic triangle and breakout.
How would you describe the underlying market action behind the box. Is it superiour, in your opinion, to other classic TA patterns, S/R etc and, if so, why.
Respectfully, should you not tone down or give the usual "Trading currencies is risky business ......." warning, as you seem to be implying that if newbies use D-Boxes they cannot go wrong. It will put them in the same bracket as experienced traders just by using them. This is how it sounds to me anyway !
Thanks
Charlton
Trendie
I would appreciate it if you could elaborate on some points about Darvas. Darvas fans seem to have a tendency to litter their postings with URLs to other sites, so a summary reply to my points/questions would be appreciated rather than further links.
Its true they are very clear.trendie said:
It seems to me that, in summary, they are a cross between support/resistance lines and congestion patterns. For example on the chart shown in post 5 we could have drawn a classic triangle and breakout.
How would you describe the underlying market action behind the box. Is it superiour, in your opinion, to other classic TA patterns, S/R etc and, if so, why.
What is the objective evaluation ? What level of success rate/% of potential profit is captured in comparison with other common Forex trading methodologies ?trendie said:
Again, along, similar lines to the above questions - how do the prediction of trades compare with other classic techniquestrendie said:
Experienced traders use a range of methods. What percentage (rough will do) would you say are using D-Box for forex ?trendie said:
Respectfully, should you not tone down or give the usual "Trading currencies is risky business ......." warning, as you seem to be implying that if newbies use D-Boxes they cannot go wrong. It will put them in the same bracket as experienced traders just by using them. This is how it sounds to me anyway !
Thanks
Charlton
one must remember Darves used to trade stocks and he liked volume to confirm. there is no volume to watch on the FX markets. further more darves was an end of day trader. when applying his method to day trading you will get a lot of false signal as JillyB pointed out.
Me personally I like buying low and selling high on extremes when trading intraday, with darves this is not the case.
Me personally I like buying low and selling high on extremes when trading intraday, with darves this is not the case.
Thanks for posting your work on the time zones JillyB. It will be interesting to see if the pattern holds with more observations. Certainly the more closely watched data reports in both the EU and US sessions are frequently times of false breaks / reversals; today's schedule included the German IFO Business Climate Index and the EUR Current Account reports at 9am and then the 3pm US Consumer Confidence. Volatility picked up considerably on these releases today, with the false break shortly after the 9am report and a reversal soon after the 3pm release.
My preference will be to trade out of areas of congestion on the 5min, outside the day's key reporting time(s). I'll plot a few pivots as the day progresses, such as high/low of the previous day, Asian and EU sessions, that might help further with profit taking beyond an initial 5 pips, especially with the stronger momentum trades.
My preference will be to trade out of areas of congestion on the 5min, outside the day's key reporting time(s). I'll plot a few pivots as the day progresses, such as high/low of the previous day, Asian and EU sessions, that might help further with profit taking beyond an initial 5 pips, especially with the stronger momentum trades.
indexgold said:
Indexgold,
Please call him with the right name: DARVAS, Nicolas. (And yes, Darvas was not a daytrader - but a "nighttrader". He made his decisions in the night when Wall Street was closed. He tried once to be a daytrader - and lost a lot of money).
Darvas - a short history:
http://curiouscat.com/invest/darvas.cfm
We're not alone in the Darvas world:
http://www.investorshub.com/boards/board.asp?board_id=1362
Last edited:
trendie
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Hi Charlton,Charlton said:
I think D-Boxes are simply another method of trading, not necessarily superior, just different.
A beginner may feel more comfortable with the unambiguity of the rules.
( personally, my only experience and comfort-zone is with MAs. )
I dont know what the success rate is.
I dont know how prediction rates are in comparison with other methods.
I dont know what percentage are using D-Boxes for FX.
tone down: I was being supportive and enthusiastic.
I dont use D-Boxes, I use MAs. I will be observant of D-Boxes, but not trade them.
I may occassionally point a Box forming, and see the response.
This thread should be seen as a project, where a set of rules are posted, and then to see if experience proves or disproves the effectiveness of D-Boxes.
The answers you want with regards to success rates, and prediction rates are unknown, but this thread could act as a study zone, where interested parties can pass on their knowledge, and to see if several people, all adding their bit results in improved performances.
I didnt intend to suggest the answers already exist, or that this method is superior, or not without risks. I am curiously to see where this thread will be in say 6 weeks from now.
( the Live Cable Thread started off with traders trying to prove how clever they were, and getting more pips than others, and eventually matured into exploring different ideas, and sharing strategies, and warning each other of news events, etc. )
hope that helps.
There has been a nice move in Cable this morning when it broke out of it's morning box.
PS. I don't understand why I should only take 5 pips per trade. Instead I - like Darvas did - use a trailing stop.
http://www.stressfreetrading.com/Article-on-Stock-Market/Nicolas-Darvas.html
PS. I don't understand why I should only take 5 pips per trade. Instead I - like Darvas did - use a trailing stop.
http://www.stressfreetrading.com/Article-on-Stock-Market/Nicolas-Darvas.html
