Darvas Box Breakouts from Recent Daily Highs and Lows

Summary

This strategy defines a trading box from recent daily price extremes and enters when the daily close crosses beyond its boundaries. A close above the top box triggers a long entry, while a close below the bottom box triggers a short entry. The box length is adjustable, with the published setting using five periods. The accompanying discussion frames these breakouts as a way to participate in moves into new price ranges and suggests validating signals with volume or moving averages.

The document describes placing stops near a prior box boundary, but the supplied code contains no stop-loss logic, so that risk-management rule is not implemented there. It also calls the approach a 52-week strategy even though the stated lookback is five daily periods. A BTC/USDT futures backtest interval is provided without results, and the text notes that sideways conditions can lead to repeated small losses and that price gaps can exceed stop protection.

Key ideas

• The strategy forms a box from recent daily highs and lows.
• A daily close crossing above the top box triggers a long, and crossing below the bottom triggers a short.
• The box length is adjustable, and the published setting is five periods.
• The discussion suggests using volume or moving averages to validate breakouts.
• The prose mentions stops, but the supplied code does not implement them, and no backtest results are reported.

Tags

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