Darvas-Alligator Performance Hybrid

Family: breakout · Regime: trending · Complexity: medium · Asset classes: Equities, Forex, Crypto · Timeframes: H1, D1

Thesis

Price breakouts from structural consolidation (Darvas Boxes) are most likely to result in sustained trends when they align with expansionary volatility (Bollinger Bands) and smoothed multi-timeframe momentum (Alligator and Performance Table). The edge exists because the confluence of these factors identifies a transition from equilibrium to a high-conviction directional move, while the TSI_CD allows for capturing the majority of the momentum curve before mean reversion occurs.

Components

• Bollinger Bands (Standard) (regime) — Used to define the volatility regime; entries are only permitted when the price is outside the central SMA, indicating a deviation from the mean.
• Bill Williams Alligator (direction) — Ensures trade direction aligns with a multi-layered smoothed trend to avoid counter-trend Darvas breakouts.
• Darvas Boxes Modern/Classic (entry) — Provides the precise execution trigger based on structural price breakouts from consolidation zones.
• TSI Convergence Divergence (TSI_CD) (exit) — Uses momentum exhaustion (histogram color change) to exit before the trend fully reverses.
• Performance Table (risk) — Filters for assets with positive relative momentum and scales position size based on trailing performance metrics.

Known failure conditions

• Performance table shows negative 12M returns while 1W returns are excessively high (>20%), suggesting a terminal blow-off top rather than a sustainable trend.
• Price remains pinned to the Bollinger Bands while the Alligator lines remain intertwined (low-volatility grind).
• TSI_CD flips color every 1-2 bars for more than 5 consecutive instances, indicating a loss of momentum signature.

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