Darvas Box Breakouts Filtered by a 25-Period Moving Average

Summary

This trend-following system combines a Darvas Box with a 25-period simple moving average. It builds box boundaries from recent highs and lows over a configurable five-period window. A long signal occurs when price crosses above the box top while remaining above the moving average; a close below the box bottom triggers an exit. The box levels and moving average are plotted to make the signals visible.

The moving average is intended to filter breakouts that run against the prevailing trend, while the box bottom offers a reference for exiting. The document cautions that sideways markets can produce repeated failed breakouts and that waiting for a box to form or relying on a lagging average can delay entries. It recommends considering volume and volatility filters and adjusting position size. The published test settings cover one month of hourly BTC/USDT futures data, and no results are reported, so the material does not establish profitability or robustness across markets and timeframes.

Key ideas

• The system defines a Darvas Box using recent price highs and lows over a configurable period.
• A long entry requires a breakout above the box top while price is above the 25-period simple moving average.
• A break below the box bottom triggers the described exit from the long position.
• The box and moving average can delay signals, and repeated breakouts may cause losses in choppy markets.
• The stated test covers one month of hourly BTC/USDT futures data and reports no performance outcomes.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.