The Definitive Guide To Find Darvas Stocks(With Codes)

In this post, I’m going to show you how to find Darvas stocks.

In fact, this exact method I used to find these kinds of stocks.

And today you’re going to see how I did it.

I had just read about the Darvas box in stock trading when I created my scanner.

Well, I am going to share it with you today so that you can use it.

You can find Darvas stocks by screening stocks daily with closing prices within 20% below the 52-week high. Also, look for stocks that double from the 52-week low recently to find it.

My readers always ask me to show them how to find these kinds of stocks.

So I created this tutorial for them. If you like, you can read it to the end.

From previous research, Nicolas Darvas trading is reliable in trading and investing.

The real question is what software to use to scan Darvas stocks.

If your trading in a market with thousands of stocks, you have to use a stock screener.

For that, I use Amibroker every day to apply my Darvas box trading strategy.

Also, even in small markets, it is useful to use stocks screeners to find stocks to trade immediately.

In this Darvas box software, Amibroker can find Darvas stocks in the stock market to set-up your trades.

Well, I felt like I need to show this strategy to my readers.

What is the Darvas Box Theory?

According to Investopedia, the theory targets stocks with increasing volume, drawing lines on the recent highs and lows, and targeting bullish sectors.

The company must be in a stable industry group to increase your potential profits.

In Nicolas Darvas box theory, you’ll buy the stocks when the price breaks out above the box.

In this Darvas box strategy, you can set your stop-loss 10%-20% below the top of the box to minimize your risks.

Does Darvas Box Theory Work?

The Darvas box Theory often works on some stocks because stocks have their characteristics.

Because each stock has a characteristic, there is a need to backtest the theory with a tool.

The tool that can do that is Amibroker.

Amibroker is a backtest and optimation software that traders can use for stock trading.

Aside from stocks, it is also useful on other types of securities.

Time Frame

According to Investopedia, the theory targets stocks with increasing volume, drawing lines on the recent highs and lows, and targeting bullish sectors.

Darvas box is a type of momentum strategy in stock trading to ride the trend.

Also, in a sense, the system is largely technical, but, strong company earnings is also a factor.

Well, Darvas looks for unusual volume in stock to have an interest in it.

When that happens, he will draw the box at the high and low of the narrow range, yet he will not buy until the price breaks the high.

Many traders have criticized the Darvas’s strategy in trading to reveal that he had traded in a bull market.

Was it only luck?

Anyone can make money in a bull market to invalidate Nicholas Darvas strategy.

However, inverting his strategy in a bear market is possible in stock trading to find profitable set-ups.

So, you should backtest Darvas box in a down market.

Otherwise, don’t use it in a sideways market to avoid unsuccessful trades.

To determine the strong trend, Darvas divided the 52-week high by the low, yet only a few traders know about it.

If the value is equal to two or greater, the momentum of the stock in the market is very strong.

Who created the strategy?

The strategy was created by Nicolas Darvas in the 1950s while dancing around the world as a professional dancer.

His trading technique has been popular to all traders.

He made $ 2,000,000 in around 18 months of trading. Darvas box has been used by traders afterward.

Also, he designed the box to suit his trading style.

While most of wall street traders focus on financial ratios and dividends, he focused more on public enthusiasm.

He did not follow tips, broker recommendations and he never went to his broker’s office.

This shows that a trader can only be successful if he is independent.

Also, he created this strategy in trading to find stocks with strong momentum.

I’m a Darvas trader in the market because I don’t like trading every day.

Darvas Screener

You can download the stock screener here. It is simple to add it to Amibroker.

You can watch the video below to see how to set it up in Amibroker.

I like Nicolas Darvas trading strategy in stock trading to find high momentum stocks.

Well, I don’t have to monitor my portfolio every day to make money in the stock market.

To become a Darvas trader in the stock market, you can use Amibroker daily.

You can watch the video below today to know how to scan stocks.

In this Darvas box scanner, you’ll notice that it is pretty accurate to find this kind of stocks.

Sectors to Target

In this Darvas box screener, Target only bullish sectors to have more chance of profiting from each trade.

a1 = Highest(High); //all time high
nearalltimehigh=a1*.8;
dbl=Ref(HHV(High,252),-1)/Ref(LLV(Low,252),-1);
Filter=dbl>=2 AND C>.8*Ref(HHV(High,252),-1) AND C>nearalltimehigh AND V>100000 AND C>5;
Plot(a1,"All Time High",colorRed,style=styleLine);
Plot(Ref(HHV(High,252),-1),"52wkhigh", colorBlue,style=styleLine);
Plot(Ref(LLV(Low,252),-1),"52wklow", colorRed,style=styleLine);
Plot(nearalltimehigh,"20%",styleLine,colorBlue);
AddColumn(C,"Close");
AddColumn(V,"Volumne");

_SECTION_BEGIN("Price");
SetChartOptions(0,chartShowArrows|chartShowDates);
_N(Title = StrFormat("{{NAME}} - {{INTERVAL}} {{DATE}} Open %g, Hi %g, Lo %g, Close %g (%.1f%%) {{VALUES}}", O, H, L, C, SelectedValue( ROC( C, 1 ) ) ));
Plot( C, "Close", ParamColor("Color", colorDefault ), styleNoTitle | ParamStyle("Style") | GetPriceStyle() ); 
_SECTION_END();

You can use the above code in Amibroker daily to find Darvas stocks.

Also, take note of the volume. Darvas wants a stock that has increased volume.

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