Darvas Box Breakout
The Darvas Box is Nicolas Darvas's classic momentum method: a stock consolidates inside a "box" (a ceiling that holds and a floor that holds), then breaks out of the top - and Darvas bought…
The Darvas Box is Nicolas Darvas's classic momentum method: a stock consolidates inside a "box" (a ceiling that holds and a floor that holds), then breaks out of the top - and Darvas bought the breakout, trailing his exit under each successively higher box as the stock stair-stepped upward. This strategy buys when Close breaks above the current box's top and exits when Close breaks below the current box's bottom.
It is a medium-difficulty, breakout / trending, daily swing-trading strategy.
How it trades
| Ingredient | Meaning |
|---|---|
| DARVASUPPER() | The current box's top - the ceiling that held |
| DARVASLOWER() | The current box's bottom - the floor that held |
Buy (breakout above the box):
Close > DARVASUPPER()
Sell (breakdown below the box):
Close < DARVASLOWER()
When it works best
A classic momentum method, best on strong trending names that advance in a stair-step of consolidations and breakouts. Its documented weakness is slow box formation: both edges need multi-bar confirmation before a box exists at all, so fast, gappy moves can run without ever printing a tradable box, and in choppy markets boxes break down as often as they break out.
Backtest this strategy yourself
Build these rules on the Free plan, adjust them, and see how they would have traded.