DarvasBoxes indicator for channel building
Continue the topic of the successful Darvas trader’s trading method. In the previous article, I told you about him. And today I would like to bring to your attention the DarvasBoxes indicator, which will do the most important work. He’s gonna build the top and bottom of the corridor. The trader will only have to track the optimal points for opening trades.
Installation of DarvasBoxes in MT4
Do it as usual. The copied indicator file is placed in the folder of the trading terminal, which is called “Indicators”. For those of you who don’t know where to find her, I’ll remind you of the procedure. To start with, click “Open Data Catalogue”. This menu item can be found via the “File” button of the terminal. In the data directory, open the “MQL4” folder. That’s where we’ll find what we’re looking for, the Indicators folder. After rebooting the trading terminal, go to the “Custom Indicators”, where the DarvasBoxes.
indicator will be located
With the settings, you won’t have to work because this tool has only two parameters that relate to the color of the channel boundaries. By default, it is the same for the upper and lower bounds. But for visual perception it would be better if the color of the borders were different. So I recommend you to change the color of one of them at once.
Watch the price and make trading decisions.
If we see that the price broke through the upper boundary of the Darvas corridor, we can consider entering the market at the opening of the next candle. It may look like this, for example:
Stop-loss is placed under the lower boundary of the corridor. As for the support of an open trading position, different options are possible here. For example, you can use trailing stop or set take profit. It can be 2-3 times larger than the size of the SL, or it can be set close to an important resistance level. In addition, it is allowed to use the additional indicator readings to close the deal.
The signal to open an SELL order is a breakthrough of the lower boundary of the Darvas corridor. Stop-loss places slightly above the upper limit. The recommendations for profit taking are the same as for purchases. Example of opening a SELL:
As we can see, the rules of opening trade orders are very simple. Still, you should not start trading on the signals of the indicator DarvasBoxes for real money at once. First of all, you need to test your strategy in demo trading. This rule applies to any technical analysis tools.
Download indicator DarvasBoxes: