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Free QTUM Cryptocurrency Strategy – Darvas Box System
The Free QTUM cryptocurrency strategy will teach you everything you need to know to improve your investing method. This easy-to-use strategy makes use of the Darvas box system. It has helped Nicolas Darvas, a young dancer, grow $25,000 into $2 million in less than two years.
Our team at Trading Strategy Guides is working hard to put together the most comprehensive PDF guide to different cryptocurrency strategy. Previously, we covered NEO Cryptocurrency Strategy a moneymaking scalping strategy that uses a combination of two very precise scalping indicators
In his book, “How I made $2,000,000 in the Stock Market,” Nicolas Darvas documented how he developed a trend-trading strategy in the late 1950s. It is known as the Darvas Box System. Reading books about trading can inspire you. You can also learn from the mistakes and the success stories of professional traders.
The Darvas box method has stood the test of time. This trading technique makes use of the buying and selling forces that are behind the price movement of any market.
Next, we’re going to explain what cryptocurrency QTUM is. We will give you a quick overview of its main features. Plus, we’re going to share a Free QTUM cryptocurrency strategy using the Darvas Box system.
What is Cryptocurrency QTUM?
Cryptocurrency Quantum (QTUM) wants to build a bridge between Bitcoin and Ethereum. Ethereum can run smart contracts, but Bitcoin cannot. To solve this problem, Quantum intends to build another blockchain that will to link Bitcoin and Ethereum together.
The whole idea behind QTUM is to take the best features of both Bitcoin and Ethereum. The goal is to make this project ready to be used in the industry.
Since its inception, QTUM is doing very well. It is currently the 22nd most valued coin in the world. It’s a well-developed cryptocurrency with a valuation of almost $700 million in market cap.
Overall, the QTUM blockchain is very technologically advanced. It’s business-friendly and on top of that QTUM is executable on mobile devices.
Before we give you the step-by-step guide to the QTUM trading strategy, we want to make sure you understand the Darvas box.
What is Darvas Box
Nicolas Darvas created a simple set of rules to help him trade the stock market. You can apply the same trading rules to the Forex market, Futures, Commodities and even cryptocurrencies.
Darvas studied the price behavior and observed that the market has the tendency to move in a certain way. What Darvas found is that the stocks that did well showed the same specific price behavior. The price would continue to climb in steps or blocks all the way up until the end of the trend.
These steps would then become valid support levels for each rise in price.
In order to take advantage of his findings, he needed to define those steps in a repeatable manner. That’s how he came up with the Darvas box technique.
Basically, he drew a box around each period of consolidation, or range, to encompass the whole price action. When the price broke away from one of these boxes, it tended to form another consolidation. Then another box formed, like in the figure above.
One of the real keys to Darvas' success, and what made him $2 million, was patience and discipline to follow trading rules. Make sure you develop the habit to abide by your trading rules.
Now, before outlining the method on how to buy QTUM, we recommend taking out a piece of paper and a pen. Note down the rules of the Free QTUM cryptocurrency strategy.
For this demonstration, we’re going to look at the buy side.
How to Buy QTUM with QTUM Trading Strategy
Because the markets are fractal in nature, the Darvas method can be used on multiple time frames with the same degree of success rate. In this regard, you can also make short-term profits with QTUM trading strategy.
Like with all our day trading strategies, we’re going to give you the trading rules first. We will do this by going through an actual live trade example.
Step #1: Identify at least two Darvas boxes that are on top of each other
The first trading rule is to let the market develop at least two Darvas Boxes. Basically, the two Darvas boxes are showing that the market is starting to move in steps to the upside. So at this point, the market also should be making higher highs followed by higher lows, which is the basic definition of an uptrend.
In the real world, you’ll notice that the Darvas boxes don’t perfectly stack on top of each other. You’ll rarely find a series of Darvas boxes where the following box has the bottom perfectly aligned with the top of the previous box.
You can notice that the price range of the second Darvas box moves into the space of the first Darvas box which still qualify for a valid Darvas box.
Note* Big candle wicks are ignored when drawing the Darvas box. Use the closing price instead.
Now, there is one more critical element that needs to be satisfied before buying QTUM, which brings us to the second step of our Free QTUM cryptocurrency strategy.
Step #2: Draw a support line in the middle of the first Darvas box
We’ve noted that there is no such thing as perfection when dealing with the price action. And since the Darvas boxes tend to overlap, another characteristic is that in most of the cases the bottom of the current box won’t exceed the middle of the previous Darvas box.
In this case, we can anticipate that the third Darvas box will develop its bottom around the middle of the second Darvas box.
Now, all it remains for us to do is to outline how to buy Quantum (QTUM)
Step #3: How to buy QTUM: Buy when we test the middle of the 2nd Darvas Box
The original Darvas system is using a different entry strategy which buys at higher prices once we break above the top of the Darvas box. We don’t like to buy high. We want to buy low and sell high because that’s the rule number one to make consistent profits.
We buy QTUM as soon as the middle of the 2nd Darvas box is tested this will ensure that we buy on a retracement in an already proven uptrend.
This brings us to the next important thing that we need to establish for our trend-trading cryptocurrency strategy, which is where to place your protective stop loss.
Step #4: Place your protective Stop Loss below the second Darvas Box
Our improved cryptocurrency buy strategy comes with the advantage of providing us with a very tight stop loss. We can hide our protective stop loss below the second Darvas box.
A break below the second Darvas box will invalidate the whole price structure and it’s wise to get out of the trade as soon as possible.
Two things can measure the success of a trading strategy.
First, how tight the stop loss is and secondly the stop loss placement needs to be logical not just a random price coming out from over-optimization.
Last but not least, we also need to define where we take profits when trading cryptocurrency QTUM.
Step #5: Take profit needs to be 2 or 3 times more than your stop loss
Opening a trade is just the beginning; you also need an exit strategy to maximize your profits. It’s often said that it’s more important where you take profits than your entry strategy
The professional traders place more weight and attention on the exit strategy because that’s how they make money. Probably, this is one of the oldest trading secrets that smart money doesn’t want you to know.
Note** the above was an example of a BUY trade using the Free QTUM cryptocurrency strategy. Use the same rules for a SELL trade – but in reverse. In the figure below, you can see an actual SELL trade example.
If the Darvas boxes don’t overlap, use the previous box top/bottom to enter the trade.
Conclusion - Free QTUM Cryptocurrency Strategy
While being a full-time dancer, Nicolas Darvas needed a trading strategy to help him accommodate his 9 to 5 job. If you have a full-time job and you want a trading approach to fit around your current career, you can safely use our Free QTUM cryptocurrency strategy.
Our team at TSG has found that the slight variation from the original Darvas system works much better because we’re able to get into a trade a much better price. We highly recommend reading the book: How I made $2,000,000 in the Stock Market so you can grasp the full potential of the Darvas system and learn new trading tricks from an exceptional trader.
Thank you for reading!
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