Kunal said:
Well, using the Darvas method you would be out of every bear stock market.
PS. I suppose the market is always choppy?
http://www.michaelcovel.com/archives/000418.html
JillyB
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Kunal said:
I suppose in a bear market you woul get more breakouts on the base of the box, instead of the top, but there should still be areas of consolidation that form the box just the same as on a bull market.
I'm only using a 5 min chart, so even a choppy market can consolidate for 20-25 minutes.
JillyB
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smbtnt said:
I didn't have a box at 25-08. I had a box further along starting with the 10.20 candle at 1.7840 top and 1.7820 base. It was broken at 10.55 (within a time zone) but only moved 8 pips in total. Less 3 pips for the spread - I suppose you could just about have taken 5 pips.
JillyB
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Baruch said:Well, in his first book ("How I Made...") Darvas' writes about a bear market, and how he's trailing stops got him out of the market. Yes, the stops was placed near the base of the box.
PS. Any trades today, Jilly?
Not as yet (but that was from 9am - not sure if there were any before then)
neil
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Charlton
Charlton - yes I have posted some url's NOT because I am a Darvas fan( I am not)(neither am I a litter lout) but because I came across the urls some time ago and sought them out again having assumed that those interested enough would read them and/or correspond with the authors to answer any questions they have. I think you will find this thread is exploratory and populated, not by Darvas box experts, but by those willing to share what titbits of info. they find and to experiment. So you will have to read the links, ask questions of the authors and do your own summary which you can share here with the work in progress of this threads contributors.
Personally, I am not a Darvas fan but I am happy to share what links to trading ideas that I have in my possession.
Charlton said:
Charlton - yes I have posted some url's NOT because I am a Darvas fan( I am not)(neither am I a litter lout) but because I came across the urls some time ago and sought them out again having assumed that those interested enough would read them and/or correspond with the authors to answer any questions they have. I think you will find this thread is exploratory and populated, not by Darvas box experts, but by those willing to share what titbits of info. they find and to experiment. So you will have to read the links, ask questions of the authors and do your own summary which you can share here with the work in progress of this threads contributors.
Personally, I am not a Darvas fan but I am happy to share what links to trading ideas that I have in my possession.
a_gnome
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Baruch said:
I'd like to pick up on this directional aspect of D-boxes: the orignal method required that the high be formed first, and then the low and this is how JillyB has said she uses them on cable. However the original method was designed to trade stocks where there is an upward bias and this sort of high-first rule would make sense.
Since FX doesn't have the same long-term directional bias perhaps one should allow either the high or the low to form first. As Jilly says, one will still get trades in a down move but you will miss some set-ups if you insist on the high forming first.
Just some thoughts, what do people think?
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Important Lesson Learned
Went long at 7840 on Cable based on breakout of Darvas Box.Quicly ran up to +15 pips -congratulated myself and decided to exit if it dropped back to +9 or continue with trailing stop if it continued to climb.
Dropped like a stone at 13.30 GMT - stupid Wanderer forgot to check for upcoming news
Lesson learned - always check the Economic Calander before and during a trade
Went long at 7840 on Cable based on breakout of Darvas Box.Quicly ran up to +15 pips -congratulated myself and decided to exit if it dropped back to +9 or continue with trailing stop if it continued to climb.
Dropped like a stone at 13.30 GMT - stupid Wanderer forgot to check for upcoming news
Lesson learned - always check the Economic Calander before and during a trade
JillyB
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a_gnome said:
I think I would have to test this theory out to see if it works. It is something that has crossed my mind, because say after a strong fall, the base would be formed first and then there is usually a small bounce which could go on to form the top. This would need exactly the same principles to be applied but just in reverse.
You're completely right when you say the FX doesn't really have the same long-term directional bias. As I said on the 'Live Cable Trading' thread, the FX is really just trading in a large range. It's never been higher than 2.50 (October 1980) or lower than 1.110 (February 1985). Since 1986 it's traded within a range 2.010 to 1.3682. So in that sense the Darvas theory isn't totally applicable.
However I do believe that it has it's uses on the Cable in sifting out potential areas of consolidation which are ready for breakout.
Today there was a breakout at 11.55 - but I didn't trade it as it wasn't in one of my 'time zones'. I reset this as the base and then waited. The breakout did come at 12.55 - again this isn't in one of my 'time zones' but I have highlighed it and if it becomes a more regular breakout time, the 13.00-13.0pm zone may have to be revised, or divided up.
As I've said this is very much work in progress and I'm posting what I see and what happens.
The breakdown at 13.30 on US news has formed a good base - I'm going to see if we can form a Darvas box in reverse here - with the base first - and I'll see what happens.
neil
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Baruch
No reason. I have not looked too closely at it albeit I am now popping by to see what develops.
One of several ways I trade is to I use consolidations etc which I think resemble Darvas boxes. The Asian range is one way I trade but I notice smaller consolidation blocks may also be useful for grabbing 5 pips or so a throw. There are other ways I trade.
On another note - If I come across an interesting thread ( as here) and I have some info. in my possession to share then I will contribute because one never knows what new appoaches will emerge to the benefit of us all.
Baruch said:
No reason. I have not looked too closely at it albeit I am now popping by to see what develops.
One of several ways I trade is to I use consolidations etc which I think resemble Darvas boxes. The Asian range is one way I trade but I notice smaller consolidation blocks may also be useful for grabbing 5 pips or so a throw. There are other ways I trade.
On another note - If I come across an interesting thread ( as here) and I have some info. in my possession to share then I will contribute because one never knows what new appoaches will emerge to the benefit of us all.
Last edited:
JillyB
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The Wanderer said:Went long at 7840 on Cable based on breakout of Darvas Box.Quicly ran up to +15 pips -congratulated myself and decided to exit if it dropped back to +9 or continue with trailing stop if it continued to climb.
Dropped like a stone at 13.30 GMT - stupid Wanderer forgot to check for upcoming news
Lesson learned - always check the Economic Calander before and during a trade
Whoops!
There was a candle at 13.15pm with a long top shadow which should have sent a warning signal that there was mounting bear pressure at that level - time for a swift exit.
I always try and take 5 pips as this seems to be quite a safe trade. If there is a lot of momentum (long candles) then go with it and trail the stop behind. However when you start to see the momentum fade - as there was at 13.15pm - it's a signal to take the profits. You can always come back later to trade again.
To check the momentum if you're in a trade and to trail a stop up in a tighter fashion - especially when we get the huge drops as we did at 13.30pm, I'm wondering about looking on a smaller time frame - say 2 minutes, but only when you're in a trade. You could then (on a sell trade say) trail the stop down at the high of the previous candle.
Any thoughts on this?
The Wanderer said:Went long at 7840 on Cable based on breakout of Darvas Box.Quicly ran up to +15 pips -congratulated myself and decided to exit if it dropped back to +9 or continue with trailing stop if it continued to climb.
Dropped like a stone at 13.30 GMT - stupid Wanderer forgot to check for upcoming news
Lesson learned - always check the Economic Calander before and during a trade
Yes, always beware of majors news. You can see them here:
http://www.forexfactory.com/
neil said:No reason. I have not looked too closely at it albeit I am now popping by to see what develops.
One of several ways I trade is to I use consolidations etc which I think resemble Darvas boxes. The Asian range is one way I trade but I notice smaller consolidation blocks may also be useful for grabbing 5 pips or so a throw. There are other ways I trade.
On another note - If I come across an interesting thread ( as here) and I have some info. in my possession to share then I will contribute because one never knows what new appoaches will emerge to the benefit of us all.
Well, the box method is only a part of Darvas' strategy. That what we can use in forex trading. But for stock traders there's a lot more. Read his books - they are very funny to read, the best written about trading, and you learn a ton.
http://www.amazon.com/gp/search/103...y,-daterank&field-author-exact=Nicolas Darvas
