Pandini-Darvas Box Breakout Strategy

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

Thesis

Market trends typically manifest as periods of range expansion (breakouts) interspersed with consolidation (Darvas Boxes). By entering only when a breakout aligns with both a medium-term regime (HiLo Activator) and short-term price direction (Matrix-sort UDF), we capture high-velocity moves. The Chandelier Exit ensures that we remain in the trade during volatility that stays within ATR-defined norms, while the MACD provides a momentum-based 'early exit' to preserve capital when the trend's strength begins to wane.

Components

• HiLo Activator (Pandini Version) (regime) — Acts as the primary trend filter (regime), ensuring trades are only taken in the direction of the prevailing average-based trend.
• Unsupported matrix.sort method in UDF (Diagnostic) (direction) — Used to confirm the immediate 'Direction' by ensuring the sorted 1x1 matrix of the current close represents an upward or downward price vector relative to the previous bar.
• Darvas Boxes MetaTrader 5 (entry) — Identifies the specific entry trigger via breakout of a consolidated range (BoxTop/BoxBottom).
• MACD (exit) — Provides an early momentum-shift signal to exit before the harder trailing stop is hit.
• Chandelier Exit (risk) — Serves as the volatility-based trailing stop and the basis for position sizing.

Known failure conditions

• Frequent gaps through the Chandelier Exit levels in low-liquidity environments.
• Extended sideways 'sawtooth' price action where Darvas boxes overlap significantly.
• Regime change where HiLo Activator remains bullish while MACD and Price have entered a secular bear phase (divergence failure).

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