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Stox Box system
This system was designed after reading (re-reading) the book "How I Made
$2,000,000 in the Stock Market" by Nicolas Darvas.
Darvas viewed stock price movements as stepping upward (and sometimes
downward) through a series of "boxes". In modern times we would call these
congestion zones or base patterns.
The interesting feature is how the boxed are defined. If a stock makes an
all-time high we start counting. If 3 days or more have elapsed, this price
is now considered to be the top of the box.
With each new all-time high we also start watching the lowest low since that
high. If this low occured more than 3 days ago, then this price is now
considered to be the bottom of the box.
Once the top AND bottom of the box are in place, a buy stop order is entered
just above the top. The idea is to buy just as the stock moves up into the
next box.
The system will exit just below the low of the most recent box.
As you might expect, the it works best on actively traded, high Relative
Strength stocks. Allow more than one entry for some exciting pyramiding
action! The source code is given below.
TradeStation and SuperCharts users right-click here to download the ELA
file.
{Stox Box system}
{based on "How I Made $2,000,000 in the Stock Market" by Nicolas Darvas}
{Copy and distibute freely - not for sale}
{(C) Copyright 2000, PatternTrader.com}
inputs: setdays(3), fudge(0.1);
variables: avgrange(0), numshare(0), boxtop(0), boxbot(9999);
avgrange=xaverage(truerange,5);
numshare=500/(avgrange*bigpointvalue);
if currentbar>maxbarsback then begin
if h>value1 then begin {an all-time high}
value1=h;
value11=h;
value2=barnumber;
end;
if l<value11 then begin {lowest low since the high}
value11=l;
value22=barnumber;
end;
if currentbar-value2>=setdays and currentbar-value22>=setdays
then begin
boxtop=value1; {the top of the box}
boxbot=value11; {the bottom of the box}
buy numshare shares boxtop+fudge*avgrange stop;
end;
exitlong boxbot-fudge*avgrange stop;
end;
----- Original Message -----
From: "Erich Kohlhofer" <KohlhoEG@xxxxxxxxxxxx>
Subject: Darvas Box
> Hi all,
>
> I have seen some mail going around regarding Nicolas Darvas' method of
trading.
>
> A few years ago I searched the net for some Darvas info and came up a
method called Stox Box. It was written in Easylanguage or something, but I
managed to convert it to MS. I was quite impressed with the signals that it
gave. However, I lost this info during a computer problem. It was my own
fault since I had not backed it up.
>
> Anyway, a few months ago I came accross a site www.gerry.com. This guy has
designed a sate diagram for the Darvas Box. I spent some time going through
this and it makes sense.
>
> After this I took the trouble to write a MS expert using this method. It
is not the same as my previous one but it seems to be quite good. It is a
bit slow due to the fact that it uses the PREV function which the other on
did not. If you want this expert, I can mail it to you directly.
>
> By the way, does anyone have the info on the Stox Box method? If I can get
this info, I can always write the expert again.
>
>
> Regards/Groete
> Erich Kohlhöfer
>
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