Darvas-Tech Dynamic Breakout System

Family: breakout · Regime: trending · Complexity: medium · Asset classes: Equities (Tech-heavy), US Indices (NAS100) · Timeframes: 1H, 4H, 1D

Thesis

Market breakouts are more likely to yield profitable trends if the underlying equity sector (Regime) shows positive correlation and the breakout is backed by short-term price velocity (Confirmation), avoiding exhausted momentum (RSI) and targeting high-liquidity structural levels (Q-Levels).

Components

• V6 All Features Fixture (regime) — Acts as a sector-wide regime filter by fetching prices of MSFT, AAPL, and GOOGL to determine if the tech-market environment is supportive of a breakout.
• Darvas Boxes (Multi-Mode) (direction) — Identifies specific price consolidation ranges and provides the 'breakout' trigger signal needed for directional bias.
• Relative Strength Index (RSI) (entry) — Filters breakouts to ensure they occur with sufficient momentum but without being in an exhausted (over-extended) state.
• Q-Levels V2.2 (exit) — Provides discrete liquidity levels (gamma/resistance/support) to act as logical take-profit targets based on external market structure data.
• Chandelier Exit (risk) — Provides a volatility-adjusted trailing stop-loss to manage risk and lock in profits during trending moves.
• Profile dynamic series history block miss (confirmation) — Ensures that the current breakout price is significantly higher (for longs) or lower (for shorts) than the price 3 bars ago to avoid low-velocity false breakouts.

Known failure conditions

• Correlation breakdown between MSFT/AAPL/GOOGL and the traded asset renders the regime filter useless.
• Failure to manually update Q-Levels string leads to stale exit targets in a high-volatility environment.
• Market enters a multi-month tight range where Darvas boxes frequently overlap without expansion.

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