Boom and Crash indices have been around for some years now, but yet, most traders still find it difficult to understand, talkless of trading it, what most people do, is that instead of them to seek for knowledge, they tend to use ideas of currency pair trading, which is not always applicable, and therefore lands their account into reds. In this post, I will try my best to break it down as much as possible, so that even a newbie will have a good understanding of it. Also, I will reveal proven methods of how to successfully trade them profitably. All you need to do is grab a glass of water or coffee and feel relaxed as you read through.
Table of Contents
What Exactly is Boom and Crash?
Boom & Crash indices are types of synthetic indices exclusive to only Binary.com/Deriv. They have distinctive and specific behavior. They are juicy markets and are very profitable when traders get the right knowledge and skill. The presence of Spikes makes them special from other synthetic indices.
They are of three (3) pairs and are:
- Boom and Crash 1000 Indices
- Boom and Crash 500 Indices
- Boom and Crash 300 indices
I will explain the pairs separately for better understanding:
- It is one of the special indices from Deriv
- It is of three types which are Boom 500, Boom 300 & Boom 1000
- Boom 500 will give twice what Boom 1000 will give you (under the same condition e.g. Lot size, time on entry and exit)
- Its normal trend is Downtrend; which means you have to place a Sell order to trade its normal trend profitably.
- It is the other special indices from Deriv
- It is the inverse of the Boom Index It is also of three types which are Crash 300, 500 & Crash 1000
- Crash 500 will also give twice what Crash 1000 will give you (under the same condition e.g. Lot size, time on entry and exit)
- Its normal trend is Uptrend; which means you have to place a Buy order to trade its normal trend profitably
How to Trade Boom and Crash Profitably
There are just two proven manual ways/methods of trading Boom & Crash profitably and are:
Trading The Normal Trends:
This involves placing a Sell order for Boom, and a Buy order for Crash. This method is very risky compared to the second method because, in this particular method, you will be trading against spikes.
However, with a proper and accurate analysis using Price-action Strategy, you can still trade it profitably.
Trading of Spikes:
This simply means trading against their normal trend i.e. placing a Buy order for Boom and a Sell order for Crash. This method is the safest and also fastest way to make your money if you know how to go about it.
You can watch the video below to have a better understanding.
Tips on How to Trade Boom and Crash Indices Profitably
If you want to trade boom and crash profitably, kindly make use of the following tips:
- Make use of the Top-down analysis method (i.e. start your analysis from a higher timeframe e.g 4 hours TF down to a Lower Time Frame e.g. 15mins TF
- Having done your analysis well, wait for a perfect setup to occur before you place an order/enter a trade
- Unlike currency pairs which can easily be affected by fundamental analysis like news, synthetic indices are not, mostly, they depend on Price action, Market structure, Supply, Demand, etc. Therefore if you can do your analysis well you won’t have any issues with trading boom and crash
These Four things I am going to mention below are very very important to your trading career
- Price Action
- Market Structure/Formation
- Risk/Reward Management
- Patience and Psychology
Therefore, do well to learn about the above-mentioned things, it will help you a lot in your trading career.
Having gone through this post, you should now be acquainted with boom and crash, the types we have, and how to trade it profitably.
Should in case any part of this post isn’t clear to you, or you have any other questions related to Forex Trading, feel free to put your question down in the comment section, I will attend to them as soon as possible.