I just realized something quite interesting about how many successful traders use the Darvas box to catch strong price rallies. The principle behind it is actually quite simple but very effective if you know how to apply it correctly.

Basically, when a coin is in an uptrend, its price doesn't increase continuously in a straight line. Instead, it will retreat to lower levels and then rise again, creating relatively stable oscillations over a period of time. This oscillation zone is the Darvas box — with the upper limit being the peak and the lower limit being the trough.

To identify it accurately, you need to follow these steps: First, define the price range where the coin is moving the most currently—that's the first Darvas box. Then, if the price breaks above the initial box's top and continues to correct, a new box will form. The highest and lowest points during this phase become the new top and bottom. You should draw at least two boxes to be sure of the trend before taking action.

The beauty of this method is that the size of the Darvas box shows you whether the coin is experiencing strong or weak volatility. The larger the box, the greater the volatility. From there, you can decide to buy or sell more intelligently.

There are a few rules to remember when using the Darvas box: Don't buy when the market is in a downtrend; only enter when the coin is in an uptrend. Don't blindly trust others' opinions or rumors—monitor the actual market developments. Buying at a high means you should sell at an even higher price. And most importantly, always set a stop-loss to protect yourself.

In practice, the Darvas box has been very helpful for me when analyzing coins on Gate. If you haven't tried it yet, start with coins that have good liquidity and carefully observe the formation of the boxes. Good luck applying it!