Darvas Box Breakouts with Moving Average and RVI Filters
Summary
This short-term trend strategy uses a Darvas Box channel to define breakout levels. It enters long after price crosses above the box top when price is above a multi-stage weighted moving average, and enters short after a break below the box bottom when price is below that average. The opposite side of the box sets the stop, while a profitable position may close when the Relative Vigor Index crosses its signal line in the opposite direction. The listed box length is five bars; published backtest settings specify BTC/USDT futures over a one-month period.
The document explains the entry filters, exits, and proposed parameter experiments, but reports no measured backtest results. It notes that box stops may be wide, pullbacks can stop out positions, and breakouts can fail. The source also contains a date-range input while its window function is always true, so the stated date filter may not be active. Performance claims should therefore be treated cautiously, with costs, sizing, and execution requiring separate assessment.
Key ideas
- A price breakout above or below the Darvas Box defines the directional signal.
- A weighted moving average filter confirms whether price agrees with the breakout direction.
- The opposite box boundary is used as a stop, while an RVI signal can close profitable trades.
- Box length, indicator settings, and exit rules are proposed for testing.
- Wide stops, false breakouts, and the absence of reported performance results limit the evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.