Darvas Boxes Indicator

Darvas Boxes Indicator

Forex momentum indicator – Darvas boxes indicator for mt4. Breakout indicator for BUY SELL signals.

The Darvas boxes indicator for MT4 is designed based on Nicholas Darvas’ trading strategy. Nicholas’ strategy became popular after he turned a few thousand dollars of his trading fund into over $2 million in 19 months.

The indicator looks simple but very powerful in executing successful trades. It is a trend following MT4 indicator that targets a breakout in momentum to give BUY/SELL signals. But unlike a typical trend following system that tries to predict a market move, the Darvas Box indicator doesn’t. It rather reacts to the price movement of the market.

This reactive trading method is effective because the markets are irrational and don’t always move as predicted. The Darvas Boxes indicator paints boxes around the chart regardless if the market is trending or ranging. As a Forex trader, you use this indicator in conjunction with your strategy to pick high probability-winning trades.

Darvas Boxes Indicator BUY/SELL Signals

To start with, the Darvas Boxes indicator is more consistent in the higher time frames, say H1 or H4. But you can still use it to scalp fewer pips from the shorter time frames though.

To enter a valid buy setup, wait for the price to move up into the higher box before taking a BUY position. You can hold onto your position as the price continues to break into the higher box.

Take Profit is discretionary to all traders. Nonetheless, you may stick with the popular 1:1 trading plan. Your Stop Loss should ideally be a few PIPs beneath the upper band of your entry box after the price has moved into the higher box.

The same logic used for a BUY signal is also applicable for a SELL setup. A SELL signal is only valid after the price breaks out into the lower box. The screenshot above is an example of a valid SELL signal for EUR/USD on the H1 time frame.

Stop Loss is best placed a few PIPs above the upper band of your entry after the price moves to the next box below.

In essence, the Darvas Boxes indicator for MT4 helps you to take trades as the momentum of the market increases. Both BUY/SELL signals should come after the breakout from the boxes of a trending market.

Conclusion
The Darvas Boxes Indicator for MT4 is trend following, hence, would be of benefit to both new and experienced traders. Since it’s a momentum indicator, it can be incorporated into the intraday and swing trading style.

Though the indicator is powerful, it is not immune to false signals. No indicator does. So it shouldn’t be used in isolation – as a standalone indicator. You may use it together with price action or any other indicator(s) for the best result.