Darvas Boxes (DB) have:

Box Top - serves as resistance

Box Bottom - serves as support

To make a Darvas Box

1. Identify movement (Is it an uptrend or a downtrend?)
2. Find pullback or rebound (Pullback if uptrend, rebound if downtrend)
3. Establish box top if there is pullback, box bottom if rebound. Establish only if there is no
breakout/breakdown within 2 days.
4. Find rebound or pullback
5. Establish box bottom if there is a rebound, box top if pullback. Establish only if there is
no breakout/breakdown within 2 days

3 Kinds of Darvas Box

1. Normal Box - Connected. The 1st box top is the 2nd box bottom

2. Strong Box - Apart from one another. Has Fast MA Trail/ far apart MAs
 3. Weak Box - Intersecting with each other. Has Slow MA Trail/criss crossing MAs

Uptrend
- When the prices consist of Higher Highs and Higher Lows

Downtrend
 - When the prices consist of Lower Highs and Lower Lows

Break out
When price breaks out of an established resistance.

Breakdown
 When price breaks down from an established support

Parallel Darvas
- A previous DB’s box top or bottom can become a future support or resistance.

Role Reversal
- When one DB has a breakout, the box top can become new support and can create a
Normal DB. Same applies to breakdowns, the box bottom can become new resistance.

Darvas Bosses - These are Darvas Boxes that extend for a long period, the longer the period
the larger and stronger the breakout. There are 6 types:
1. 3 Month High
2. 6 Month High
3. 9 Month High
4. 12 Month High
5. Multi-Year High
6. All Time High
DB 50
- is a line in between the established Darvas Box, most of the time it’s in the middle of the
box. But, the DB50 will only be confirmed once it has been tested as support and/or
resistance several times.

Confirmation and Validation Candles

- When a breakout occurs, the previous resistance becomes support. If the next candle
touches the new support that is a confirmation candle. If the next candle rebounds or
goes away from the support that is a validation candle.

- If the next candle after the breakout doesn’t pullback from the support that’s a
continuation candle.

Darvas Entry Points

E1 - Darvas Box Bottom
- Buy on Support Opportunity (BoSO)
E2 - DB 50
- Buy on Breakout Opportunity (BoBO)
E3 - Darvas Box Top
- Buy on Breakout Opportunity (BoBO)
E4 - Confirmation and Validation Candles
- Buy on Support Opportunity (BoSO)

Additional Notes
1. 80% of the time, breakout will happen on the 3rd test of resistance
2. 80% of the time, breakdown will happen on the 3rd test of support