There is no doubt that among Deriv synthetic indices, Boom and Crash are unique due to their price spikes (Boom) and drops (crash) that occur in a series of 1000, 500, or 300.
They are completely different in design from Deriv volatility indices and, as a result, should be traded differently. There have never been indices like Boom and Crash before, which is why there is so much interest in Boom and Crash trading.
There is also a sizable community of synthetic traders looking for the best Deriv-Boom and crash best strategies.
You will know the best Boom and crash strategy that works by the end of this article.
DERIV-BOOM AND CRASH BEST STRATEGIES
To have a Deriv-Boom and crash best strategy you need to:
- Focus on market structure and patterns
- Follow the dominant trend
- Trade on support and resistance zones
FOCUS ON MARKET STRUCTURE AND PATTERNS
Since Boom and crash are not influenced by market hours and global events, market structure and patterns are the first steps to successful Boom and crash trading.
After identifying a market structure, wait for a breakout in structure.
See the image below:
FOLLOW THE DOMINANT TREND
Follow the trend, the trend is your friend; we hear it all the time. This rule is often ignored by traders. Following the trend is synonymous with following the order flow.
To follow the trend, you must examine the market from a higher timeframe (H1 and above)
Following the trend would allow you to distinguish between the market’s dominant trend and a minor pullback.
See the image below:
TRADE ON SUPPORT AND RESISTANCE ZONES
Support and resistance zones are important indicators to look for when trading financial instruments, especially at higher timeframes.
In terms of best strategies for Deriv-boom and crash, Boom spikes and crash drops easily break through support and resistance in lower time frames, which is why they work best in higher time frames.
You place your entry at the break of support and resistance, as well as a retest of the broken zone. All of this will be applied in the direction of the dominant trend until the market reverses.
See the image below:
BOOM AND CRASH SPIKE STRATEGY
Is there a boom and bust spike strategy that ensures consistent profit? In the financial trading world, there is a saying known as the Holy Grail, which means that there are no perfect trading strategies.
One thing is certain in trading: the market will always react to price action and market structure, especially for the Boom and Crash spike strategy.
That being said, rather than looking for a Boom and Crash strategy, focus on understanding the fundamentals of technical analysis trading, as Boom and Crash are unaffected by global news.
This would allow you to determine the best time to place a trade for a Boom and crash.
At the top of this article, you will find image examples of Boom and Crash spike strategy.
BEST STRATEGY FOR BOOM AND CRASH
When it comes to trading boom and crash, it is important to trade from a higher timeframe paying attention to support and resistance zone for possible market entry.
Having a good strategy for boom and crash is beyond using a bunch of indicators because they lag. There are certain rules that govern financial trading and boom and crash respect those rules. These rules require MT5 free default tools.
So here are the tools and rules you need if you want the best strategy for boom and crash.
- Market structure knowledge
- Learn how to use The Fibonacci tool.
- Top down analysis handling multiple timeframes.
Note that in market structure you will find support and resistance, chart pattern, and more.
BOOM AND CRASH 1 MINUTE STRATEGY
If you want to see consistent returns on Boom and crash then you have to focus on trading on higher timeframes.
Like I said before, support and resistance are easily broken on lower timeframes so I will not recommend you trade Boom and crash on 1 minute.
IS BOOM AND CRASH MANIPULATED?
Many synthetic traders believe that boom and crash is manipulated; however, it is difficult to say that boom and crash is manipulated because there are many participants involved, both winning and losing traders.
In my years of trading Boom and Crash indices, I’ve discovered that the index responds very well to price action technical analysis on higher timeframes.
That being said, if you pay attention to price action trading, you will also be on the winning side.
BEST INDICATOR FOR BOOM AND CRASH
If there was a best indicator for boom and crash then every synthetic Boom and Crash would be making money.
There is no Holy Grail in trading. The best boom and crash trading system is price action.
WHAT MOVES BOOM AND CRASH INDEX
Boom and Crash is highly influenced by pure price action, if you want to trade Boom and Crash successfully naked trading is the way. I don’t recommend indicators for Boom and Crash trading because they lag.
With price action, you get to see the price real-time and catch early market entry and tighter stop loss.
WHICH INDICATOR IS BEST FOR BOOM AND CRASH?
The best indicator for Boom and Crash is no Indicator. Naked trading is the way to trade Boom and crash.
A naked Boom and Crash chart will enable you easily spot the market dominant trend and all the support and resistance zones.
With a naked chart, you can see the swing highs and lows and apply your trend line properly to touch the swing levels.
HOW DO YOU PREDICT SPIKES IN BOOM AND CRASH?
A reliable method exists for predicting Boom and Crash spikes.
- Look for spikes in zones of multiple price rejection on Higher timeframe (H1)
- Price breakout of chart pattern.
- spikes can be detected with trend lines on swing lows and highs
HOW DO YOU TRADE BOOM AND CRASH WITHOUT FEAR?
To trade Boom and crash without fear you need to:
- Use lot sizes that matches your trading capital (risk management)
- Do your market analysis on higher timeframes
- Enter trades on breakout and exit on support and resistance (on the trend)
- Sell on swing highs and buy on swing lows
- Follow the Dominant trend.
WHAT IS THE HARDEST MISTAKE TO AVOID WHILE TRADING?
There are many mistakes traders make while trading, I will list a few:
- Most traders mistake a pullback for the dominant trend
- False breakout from actual breakout
- Focusing on too many pairs
- Buying at a swing high and selling at a swing low
WHAT IS THE BEST TIME TO TRADE BOOM AND CRASH IN SOUTH AFRICA?
Because Boom and Crash are standalone indices and are not affected by market trading hours; therefore Boom and crash do not have a best time for trading rather the best time to trade Boom and crash is the break of market structure, especially on a higher timeframe.
To understand more about the best time to trade boom and crash in South Africa go read my previous articles regarding Boom and crash trading.
As a synthetic trader who wants to be successful in trading Boom and crash; the best first step to take is to learn that Boom and Crash is influenced by price action and market structure.
Indicators such as moving average are not the best bet for trading Boom and Crash because they lag.