Darvas Forex Scalping Trading Strategy

Forex scalping is quite a popular trading style within the forex community, due to the vast opportunities that it creates and the high probability of getting an entry signal.

There is a whole army of forex scalpers who are trying to grab every conceivable break from these small price fluctuations.

The Darvas forex scalping trading strategy is designed to help you make more profits from small price fluctuations and a lot more to enhance your scalping experience.

Learn how to spot tradable buy and sell trade setups with this strategy:

Chart Setup

MetaTrader4 Indicators: Detrended_Synthetic_Price_goscillators.ex4 (Inputs Variable Modified; Change color on : = Change color on zero cross), darvas.ex4 (default settings), DEMA.ex4 (Inputs Variable Modified; PERIOD=100)

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute

Recommended Trading Sessions: London, New York, Tokyo

Currency Pairs: Any low spread forex pair

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Download the Darvas Forex Scalping Trading Strategy

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy entry if the following indicator or chart pattern gets displayed:

  1. If the red line of the DEMA custom indicator intersects the royal blue darvas.ex4 custom MT4 indicator line in a bottom up fashion, while price trades marginally above, a buy trend is said to be looming, hence trigger to go long on the selected fx pair will suffice.
  2. If the lime green filled line of the Detrended_Synthetic_Price_goscillators.ex4 indicator gets aligned somewhat above the 0.00 level within its window, a bullish trend is in the offing i.e. a trigger to buy the stipulated currency pair.

Stop Loss for Buy Entry: Place stop loss below rising red line.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions takes precedence:

  1. If while a buy signal is running, the red line of the DEMA.ex4 custom indicator intersects the royal blue darvas.ex4 custom indicator line as seen on Fig. 1.0, an exit or take profit is advised.
  2. If the line of the Detrended_Synthetic_Price_goscillators.ex4 indicator turns orange red in the course of a bullish trend, this is indicative of weaning bulls power, hence an exit or take profit is recommended.

Sell Entry Rules

Enter a sell order if the following holds true:

  1. If the red line of the DEMA custom indicator intersects the royal blue darvas.ex4 custom MT4 indicator line in a top downward manner, while price trades slightly below (check Fig. 1.1), a sell trend is said to be imminent, hence trigger to go short on the specified currency pair.
  2. If the orange red filled line of the Detrended_Synthetic_Price_goscillators.ex4 indicator gets aligned fairly below the 0.00 level within its window as shown on Fig. 1.1, a bearish trend is in the cards i.e. a trigger to sell the required forex pair.

Stop Loss for Sell Entry: Place stop loss above falling red line.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If while a sell signal is ongoing, the red line of the DEMA custom indicator intersects the royal blue darvas.ex4 custom indicator line as spotted on Fig. 1.1, an exit or take profit is warned.
  2. If the line of the Detrended_Synthetic_Price_goscillators.ex4 indicator turns lime green in the course of a sell signal, this is indicative of halting bears power, hence an exit or take profit is advised.

Sell Trade Example

Fig. 1.1

Free Download

Download the Darvas Forex Scalping Trading Strategy

The Detrended_Synthetic_Price_goscillators.ex4 was designed by John Ehlers and has numerous ways in which it can be used, one of which is as s trend finder.

The Darvas.ex4 custom indicator was designed in 1956 by Nicolas Darvas, an Ex-ballroom dancer.

A Darvas box is formed when the price of a currency pair surges past the previous high but dips back to a price level not far from that peak.

The idea behind the Darvas box is basically a momentum strategy.

The Double Exponential Moving Average (DEMA) was designed by Patrick Mulloy as a tool to better respond to changes in the market than the usual moving averages.

The computation of the DEMA is built around a single exponential moving average and a double EMA.

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