#Darvas #Box is a simple and interesting strategy used by the trader. It is a momentum strategy with no technical indicators.
This learning thread would be on "Darvas Box Strategy"
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@AmitabhJha3
1/11
Darvas Box is named after Nicolas Darvas, who was a dancer and self-taught investor.
He discovered "Box Theory" after gaining experience from the market and he believed that the shares which move up and down the chart move in a specific box pattern.
2/11
There are some condition to use Darvas Box and we will discuss only buy strategy:
1. Stock should be trading near all time high levels
2. Fundamentals of the company should be good
3. Volumes play a crucial role
Prefer to use it daily time frame and above.
3/11
When the price is near all time high levels, if price consolidates then there is a range or box formed having a upside ceiling and downside floor. Price consolidates in this range before breakout.
Volumes during breakout is very important and it should be high.
4/11
Let's see some example now.
Dmart was trading in a range of 1955-2438 for six months.
After breaking this range upside, DMart price rallied from 2500 to 3200+ (Rally of 28% in 3 months).
During breakout volumes should rise and it should spike up.
5/11
