Darvas Box on Kospi

R

Roark

Anybody ever try Darvas boxes on Kospi? With the Darvas box, you can never quite tell when to fade the box boundaries or to go with the break. For example, in the attached screenshot, I lost on the fake breakout and had a decent score on the real breakout that occurred a few minutes later. In the screenshot, purple indicates that the Darvas box is established and when price passes past the purple line there has been a breakout from the box.

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=3095566">
 

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If I recall an article I read many years ago, Darvas made a fortune using this technique. However, he was operating in a trending market.

The Darvas Box is just another breakout trading strategy. Success comes down to whether the market is trending or in a trading range. If you could accurately predict that the market is going to trend, you would take the breakout triggers. And if you could accurately predict if the market is ranging sideways, you would fade the market at the range boundaries.

Most indicators and patterns are dependent on this determination of trending vs ranging. That's really the challenge you need to tackle, and is the holy grail for traders. The particular indicator you use is secondary.
 
I would think that boxes that are short in length, i.e., short along the x-axis, indicate a trending market. The boxes are short because it is one breakout after another in the direction of the trend.

Long boxes would indicate a ranging market with no real trend. However, breakouts from a long established range tend to be powerful.
 
Quote from Roark:

I would think that boxes that are short in length, i.e., short along the x-axis, indicate a trending market. The boxes are short because it is one breakout after another in the direction of the trend.

Long boxes would indicate a ranging market with no real trend. However, breakouts from a long established range tend to be powerful.
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Agree. But that only describes the price history, not what happens next. Trends can continue or become ranging, and ranges can continue or start trending. It's all about what happen's next ... that "hard right edge" of the chart, as they say.
 
I'm going to hang it up for today. I did all right with Darvas boxes and don't want to spoil it with a big loss in the last half-hour of trading. I'll have another go at it at Monday and see if I can repeat the same success. I'm still trying to figure out a consistently profitable strategy to use with Kospi trading, so this is with my IB simulation account.

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=3095652">
 

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Well, the Darvas box method wasn't as profitable in this trading session. I'm going to call it a day here. I was down about 500,000 KRW and caught a couple of winners to erase the red ink. There is still close to an hour of trading left, but I don't want to go home with a loss. Hope your President's Day isn't too boring.

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=3098134">
 

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Which way do you think price will break? Up or down? I don't think it will stay in that range for the entire trading session. Will it be a fake break? Break for one or ticks through the bottom and then reverse?

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=3099191">
 

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Price broke to the down side. Now which way, up or down?

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=3099250">
 

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You're were right this time. Price broke down. Now which way, further down or a bounce up? There is still an unclosed gap from the open.

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=3099299"
 

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