Forex Darvas Pointer Indicator

The Forex Darvas Pointer is a momentum indicator that tells about the trend’s direction. In this guide, we’ll talk about what the indicator is and its trading strategy.

What is the Forex Darvas Pointer Indicator?

The Forex Darvas Pointer Indicator uses the Darvas box theory to determine the direction of the trend. Nicolas Darvas developed the theory in the 1950s.

The theory suggests buying only those stocks that have a high volume. These high-volume areas are described as boxes. Darvas boxes are made by drawing a line between lows and highs.

As the highs and lows are updated, you may notice increasing or dropping boxes. Darvas box theory proposes only trading rising boxes and updating stop-loss orders based on the highs of the hit boxes.

The Forex Darvas Pointer is a bit different than the original indicator. The only thing common is they are momentum indicators. Forex Darvas Pointer creates volume bars below the chart. These bars are bullish (green) and bearish (yellow) and have a dotted signal line.


These dots form as a result of bullish and bearish moments. Along with the dots, the Forex Darvas also draw arrows.

Forex Darvas Pointer Indicator
Forex Darvas Pointer Indicator

Forex Darvas Pointer Indicator Strategy

To trade with the indicator, you have to combine volume and arrows. You can take long positions if there is a bullish volume and the indicator plots a green arrow. Conversely, if there is a bearish volume and the indicator shows a red arrow, you can look for short positions.

It’s important to note that Forex Darvas Pointer Indicator can plot random bullish and bearish bars within the trend. So, it’s best to avoid taking positions at that time.

Like many momentum indicators, the Forex Darvas Pointer Indicator can be prone to false signals, so it’s best to use other forms of technical analysis for further signal confirmation.

Similar to the traditional Nicolas Box, you can use the Forex Darvas Pointer Indicator on all timeframes.


Buy Signal

  • There must be a bullish volume.
  • The indicator should plot a green arrow.
  • Wait for the trend to continue and then enter.
  • You could place a stop-loss at the recent low.
  • You could set take-profit at a recent high or exit the trade when the indicator shows a red arrow.
Forex Darvas Pointer Indicator buy signal
Forex Darvas Pointer Indicator buy signal

Sell Signal

  • There must be a bearish volume.
  • The indicator should plot a red arrow.
  • Wait for the trend to continue and then enter.
  • You could place a stop-loss at the recent high.
  • You could set take-profit at the recent low or exit the trade when the indicator shows a green arrow.
Forex Darvas Pointer Indicator sell signal
Forex Darvas Pointer Indicator sell signal

Forex Darvas Pointer Indicator Pros & Cons

Here are the pros and cons of trading with the indicator.

Pros

  • The indicator can present clear entry and exit points.
  • It works on all timeframes.
  • It is easy to understand.

Cons

  • The indicator is prone to false signals.
  • You may need to combine the indicator with other forms of technical analysis.

Conclusion

The Forex Darvas Pointer Indicator uses the Darvas Box theory and combines volume and arrows to tell about the trend’s direction. The indicator can present clear trading signals with high buying/selling volume.

Free Forex Robot