Darvas Box Breakout mq4 Strategy For MT4
Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.
The Darvas Box Breakout mq4 Strategy For MT4 is designed by using the simple concept of breakout. After installing the necessary indicators, you should see colored boxes. These boxes are used to identify the potential breakout in the price.
Darvas Box Breakout MQ4 Strategy For MT4 is a versatile breakout trading system that allows you to trade major and minor currency pairs. But if you intend to trade the minor currency pairs, you should look for the trade signals in the higher time frame. By doing so, you can offset the noise associated with the price movement in minor currency pairs.
Furthermore, the Darvas Breakout Box demonstrates the breakout trade setups in a very simple manner. But those who are new to the trading profession should trade the breakout which favors the existing trend only. By taking the trades with the major trend, you should be able to avoid most of the false breakout.
In this guide, we’ve briefly discussed the trading methods and rules of the Darvas Box Breakout MQ4 Strategy for MT4. Without any further delay, let's dive into the details.
Overview of The Darvas Box Breakout mq4 Strategy For MT4
- Darvas Breakout Box: The Darvas Breakout Box remains gives you the trading opportunity, 24x7. However, you should be using this trading system by using an organized trading routine.
The high of the Darvas box represents the breakout resistance levels. We should take the long trade once a bullish price candle successfully closes above the breakout resistance level.
On the other hand, the low of the Darvas box shows the breakout support level. If a bearish candle closes below the support level, we should take our short trade.
The box turns blue when the price moves in the direction of an uptrend. On the contrary, it turns red when the price intends to move in favor of the downtrend.
Aggressive traders directly often execute the trades after the price breaks out of the box range. However, we recommend you wait and see how the price candle closes after the break. Unless we have a strong bullish or bearish breakout, we should not take the trade.
Besides identifying the price breakout points, the breakout box also acts as support and resistance levels for determining the stop-loss areas of your trade entries. For example, if you execute a long trade, you should place the stop-loss limit below the breakout support level of the Darvas box.
- Breakout Arrow Signals: This indicator creates an arrow signal which gives us the confirmation to take the trade. This indicator creates an arrow mark whenever the price breaks out of the Darvas Breakout Box. A blue arrow shows up when the price makes a bullish breakout. On the contrary, a red arrow appears pointing downwards once the price breaks below the breakout box-low.
- Forex Fractals: It shows you the possible swing areas of the price movements. The blue fractal dot represents the end of the bullish rally, on the contrary, the red fractal dot suggests the end of a bearish drop in the price.
Long Trade Setup Using The Darvas Box Breakout mq4 Strategy For MT4
Figure: Execution of the long trade
According to this chart, the price was initially moving in a downtrend following bearish breakouts from the red Darvas Box. At a certain stage, the price stops moving further downwards and starts showing sideways movements.
During this period, we also notice several red fractal dots plotted below the candle-low, which is an early signal for an upcoming bullish move of the price. At the same moment, the Darvas Breakout Box turns blue which signals for a possible bullish breakout of the price.
After a while, the price breaks above the Darvas breakout box. Also, a blue signal arrow appears inside the box confirming the bullish breakout of the price. Based on the price action confirmation, we have taken the long trades with a stop below the blue support line. The take profit is set by using a 1:2 risk to reward ratio. you may use the nearest resistance level to determine the exit point for the trade.
Short trade setup Using The Darvas Box Breakout mq4 Strategy For MT4
Figure: Execution of short trade
According to this chart, the price was initially moving in a neutral trend and ranging between 1.1802 and 1.1834. Later, the price rejects the breakout resistance level and a blue fractal dot appears above the candle high. It is an early signal that we may experience a strong drop in the price.
After a while, the price breaks below the breakout sell level and also prints a bearish candle. Also, a red breakout signal arrow appears inside the box area confirming the bearish breakout of the price.
Once we get the above confirmation, we have taken the short trade with an SL above the resistance level. The TP is set to the nearest support level.
Summary:
By now you know the steps associated with the Darvas Box Breakout mq4 Strategy For MT4. But to keep your fund safe you should always trade with low risk. And try to learn the essential steps mentioned in this article in the demo account. By doing so, you will keep your real account safe.
Note that, breakout trading strategy is not suitable for everyone and you might have to deal with losing trades very often. So, trade this system via a demo account and get familiar. Once you feel confident in the demo trading account, you can start using it in the real market.
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