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 DARVAS BOX THEORY RULES
The rules of trading with the Darvas box theory is very simple, as outlined below.

 Look for stocks or securities that are making a new 52-week high

 Then filter these stocks or securities which have retreated from the 52-week high for three
consecutive days

 The new 52-week high is the top of the box. The breakout prior to reaching the 52-
week high is the low

 After the low is formed, price should not break that low for at least three days

 Buy the breakout of the box, i.e: stock breaks its recently formed 52-week high

 Sell if the breakout is at the bottom of the box

TECHNIQUE-4:-DARVAS BOX TRADING STRATEGY (2 WEEK CONSTANT

MOVE)
https://chartink.com/screener/darvas-box-perfect
https://chartink.com/screener/rkb-darvas-box
https://chartink.com/screener/darvas
CONDITION: -
Specifically, the stock's 52-week high represents the floor of the box.
When the stock price reaches a new 52-week high and then falls from
that high or at least doesn’t penetrate that high for three days, that new
52-week high becomes the top of the box. The idea is simple: when
the stock goes above the top of the box, buy the stock; when
the stock goes below the floor of the box, sell it.
A new box forms when the stock hits a third 52-week high, with the
second 52-week high becoming the floor. In this way, boxes can pile up.
Price and volume
His Darvas Box theory
Automatic buy stop orders – orders to enter the market above current price
Automatic stop loss orders – order to exit the trade below current price
Trade breakouts from the box in the direction of the trend
Trail his stop loss which will protect his open profit as price trends higher
Buy more as the trend continued to move upwards
 Take his profits or cut his losses when the trend reversed
This does not include the stock selection process or what type of volatility
measure to use to give the you the odds that the breakout has the
potential to succeed.
Most often in the stock market, volume would be used but you will have to
determine the type of volume you need to see.  You may want to test such things as
an increase in volume that exceeds the a 20 period average of the previous days
volume.

Darvis Box Trading Strategy

We covered a lot of information about the box theory and in essences, the trading
strategy for the Darvis Box looks like this:

1. Trade breakouts from the box in the direction of the trend

2. Trail his stop loss which will protect his open profit as price trends higher

3. Buy more as the trend continued to move upwards

4. Take his profits or cut his losses when the trend reversed

This does not include the stock selection process or what type of volatility
measure to use to give the you the odds that the breakout has the
potential to succeed.
Most often in the stock market, volume would be used but you will have to
determine the type of volume you need to see.  You may want to test such things as
an increase in volume that exceeds the a 20 period average of the previous days
volume.

1. When a stock fails to make a new high for three days, the most recent high
that is higher than the three subsequent highs becomes the box top.
2. When a stock fails to make new lows after three days, the most recent low
that is lower than the three subsequent lows becomes the box bottom. (We are
using the low after the high is formed)
Once the bottom breaks in an uptrend, the stock would be taken off the list until a
new box forms.

A break of the top would indicate a trading opportunity.