Darvas Box: The best stock trading indicator you never heard of? // Darvas box strategy, darvas box tutorial, darvas box theory, darvas box method, darvas box forex, darvas box thinkorswim, darvas box indicator tradestation, darvas box trading method, darvas box theory tutorial, darvas box theory explained, darvas box scanner, darvas box screener, darvas box software, how to use darvas box indicator strategy david moadel
welcome to looking at the markets with
David Modell here's an indicator that
you may not be too familiar with and if
you like to trade breakouts then this
might be worth exploring it's called the
darvis box and let's take a look the
darvis box was used in the 1950s by
Nicholas darvis it's a visual way to
identify and trade tight range breakouts
and breakdowns when you notice a stock
price repeatedly bouncing between
vertical support and resistance lines
you can draw a box to show the range a
strong breakout or break down out of the
range can be a buy or sell signal
especially if there is heavy volume when
buying a breakout a stop loss order can
be entered just below the bottom of the
box you can draw more boxes as the stock
price creates new tight ranges alright
so let's take a look at some examples
and if you're going to be one of the
more traditional darvis box users then
there would probably be multiple boxes
on the same chart there would be box
after box after box but I'm just going
to focus on one box per screen here just
to keep it simple alright so this is
royal caribbean cruises and this is the
daily chart and I used stockcharts.com
so thank you to them for allowing me to
use their charts okay and as you can see
it was chopping around the daily price
action and then it went into a tight
range
and I really don't consider a range
until it until it bounces off the top
and bottom at least a couple times so
this would be a good example of a tight
range here and when I identified the you
know what some people might call the
support to the bottom part of the tight
range the resistance or the top part of
the tight range then I drew a box it's
pretty simple and then when it bursts
through the box with conviction meaning
when really just went right through it
not just a little bit I don't want it
just going a hair above the box I want
it to really go and there look at the
volume on there okay so that is a
convincing break a break out there and
as you can see it went up and up after
that okay so that would have been a good
buy point right there and you can put
your if you want to put your stop loss
you could put it right below the bottom
of the box there all right here is
another example of coals and again as
soon as I saw it bouncing around between
the top and bottom here of this range
here i drew a box and as soon as it
broke out good size volume here really
went above it not just a lot not just a
little bit but really went above it that
was a great time to buy and look how far
audit look how far up at wins now of
course you want to know when to take
your profits otherwise you could lose it
all very quickly
here's another example of target tight
range here just kind of bouncing and I
drew a box when I decided this would be
the range and as soon as it broke above
with conviction look that volume bar
there okay and it when I really went
above it and you would have done nicely
if you had taken your profits at the
right time all right now it could also
work to the downside here is Ford here's
a definitely arrange here bouncing off
the top and the bottom several times and
as soon as it broke below it heavy
volume bars here and it really broke
below it you want to get out of the way
you could even some people might even
short it that that's more of a risky
move but you know the you could do that
for sure okay I'm not telling you what
to buy or what to sell these are just
ideas and again this is not a perfect
indicator but as you can see sometimes
it does work quite well alright so
that's just a really brief introduction
and but if you'd like some help with
trading investing or putting together a
plan for your trading or investing
because you really you really need to
have one that you can you can definitely
contact me we can talk about that I hope
you like this video if you do give it a
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mentioned you can contact me if you need
help or would like help putting together
a plan for your trading or if you have
questions my email address is David
Modell @ gmail.com thank you so much for
watching and listening and I'll talk to
you again soon
you