Replies to post #13 on The Darvas Method

[S Chun-Li]

Top is when stock has broken out from previous box and has subsequently not made a new high for 3 days.

Then bottom of box is any point after the top when a new low hasn't been made for 3 days. So the bottom is set after the top, but can be set before the top is known.

Consider the following daily price ranges below for an imaginary stock that prior to Day1 has an all time high of 19:

The top is at Day3. You only find this out on Day6, when Day3's top has not been breached for 3 days.

The bottom is on Day4. You only find this out on Day7, when Day4's bottom has not been breached for 3 days. It is the first daily low since the top was set on Day3 (even though this fact was not known until Day6) that has not been breached for 3 days. So the top is 27 and the bottom is 21.

The gerryco.com and sethi.org algorithms would have started looking out for the bottom on Day5 and Day6 respectively. gerryco.com would have the bottom as 22 set on Day5 and dicovered on Day8. sethi.org would have the bottom as 23 set on Day6 and discovered on Day9.

 
 Day1:  20 - 25 
 Day2:  22 - 26 
 Day3:  22 - 27 
 Day4:  21 - 26 
 Day5:  22 - 25 
 Day6:  23 - 26 
 Day7:  24 - 25 
 Day8:  24 - 26 
 Day9:  25 - 26 
 Day10: 24 - 26