Ichimoku-Darvas Range Expansion System

Family: breakout · Regime: trending · Complexity: medium · Asset classes: Equities, Crypto, Forex · Timeframes: H1, H4, D1

Thesis

Market breakouts are only sustainable when they occur in the direction of the macro-regime (Ichimoku), are supported by institutional accumulation (OBV), and possess sufficient volatility to break away from local equilibrium (Boxline). The edge lies in filtering out 'exhaustion breakouts' by requiring alignment across these four independent domains.

Components

• Ichimoku Kinko Hyo (regime) — Provides the macro trend regime; ensures we are only trading in the direction of the dominant cloud bias.
• Simple Moving Average (SMA) (direction) — Acts as a secondary trend filter to ensure price momentum is aligned with the long-term average.
• Darvas Boxes MetaTrader 5 (entry) — Identifies institutional consolidation phases and triggers entries on momentum-backed range breakouts.
• SuperTrend (exit) — Provides a trailing stop-loss mechanism that tightens during trend exhaustion to preserve capital.
• ATR SL Finder (risk) — Calculates initial risk based on current market volatility to normalize position sizing.
• On-Balance Volume (OBV) (confirmation) — Confirms that the price breakout is supported by accumulation/distribution flow.
• Boxline (Dynamic Range Breakout) (volatility_filter) — Filters out low-volatility 'noise' by requiring price to be in an active expansion phase (new box formation).

Known failure conditions

• Breakout success rate falls below 35% during trending cloud regimes.
• Average slippage on Darvas breakouts exceeds 0.5 ATR.
• OBV shows persistent divergence during 3 or more consecutive winning price breakouts.

Explore the full interactive blueprint with parameter ranges and evidence on WOBR StrategyVerse, or generate this strategy as an MT4/MT5 Expert Advisor with QuantMogul AI Engine (free download).