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The Darvas boxes indicator is MT4 based on Nicholas Darvas’ trading strategy. He made a lot of money from his trading fund and turned it into more than $2 million in just 19 months.
Although the indicator appears simple, it is very effective in the execution of successful trades. It is a trend-following MT4 indicator that targets momentum breakouts to give BUY/SELL signals.
But unlike other trend following systems that try to predict market movements, the Darvas Box indicator does not forecast them. Instead, it reacts to price movements.
This reactive trading strategy is very effective as markets can be unpredictable and do not always move in the predicted direction. The Darvas Boxes indicator draws boxes on the chart, regardless of whether the market is trending/ranging.
As a Forex trader you can use this indicator together with your strategy to identify high-probability winning trades.
Darvas Boxes Mt4 Indicator Signals
The Darvas Boxes indicator tends to be more consistent over longer time frames (H1 and H4). However, it can still be used to scalp less pips in shorter time frames.
Wait for the price to rise into the higher boxes before you take a BUY order. You can keep your position if the price breaks into the higher boxes.
All traders have the option to take profit. However, it is possible to stick with the popular 1:1 trading strategy. Your Stop Loss should be at least a few points below the upper limit of your entry box once the price has moved into the greater box.
The same logic is used to take a BUY signal can also be applied to a SELL setup. A SELL signal will only be valid if the price breaks into the lower box.
After the price changes to the box below, Stop Loss should be placed at least a few PIPs higher than the upper band of the entry.
The Darvas Boxes indicator MT4 allows you to trade as momentum increases. Both BUY/SELL signals should be sent after the breakout of a trending market.
Conclusion
Darvas Boxes Indicator MT4 is trend-following and would benefit both novice and experienced traders. It can be used in both intraday and swing trading styles as a momentum indicator.
The indicator can be powerful, but it cannot be immune to false signals. No indicator does. It should not be used as a single indicator. It can be used in combination with price action and any other indicator(s) to get the best results.
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