How to Trade Boom and Crash Indices Successfully

How to Trade Boom and Crash Indices Successfully

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You don’t have to be a guru to understand how to trade Boom and Crash, but you do need a good understanding of price action to become a successful Boom and Crash trader. As it is in every trading adventure, you need a solid plan and a strategy to win in the market. But the truth is, there is no strategy that is 100% perfect, so how do you navigate the strange candles and become profitable?. In this article, I will share some tips that will guide you in your journey to become a successful Boom and Crash trader.

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First, what is Boom and Crash Indices?

If you are a newbie , you must have heard of Boom 300, Boom 500, Boom 1000, Crash 1000,  Crash 500 and Crash 300. For the sake of clarity, Boom and Crash are ‘synthetic indices ‘ that is found only under the Deriv.com platform.

With Crash 1000, Crash 500 and Crash 300 Index, there’s an average drop in the price series that occurs at anytime within 1000, 500 and 300 ticks respectively. With Boom 1000, Boom 500 and Boom 300 index, there’s an average of one spike in the price series that occurs at anytime within 1000,  500 and 300 ticks respectively.

How to Trade Boom and Crash Indices Successfully

A number of traders (both expert and beginner) have had issues with the market structure of boom and crash. This is because, unlike the currency pair, boom and crash have been structured to either buy or sell using spikes at an even period of tick.

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For instance, when trading either the boom (Boom 300, Boom 500 or Boom 1000) or crash (Crash 300, 500 or 1000) assets, one will observe that the boom market sells by default while the crash assets buy by default. However, when boom markets buy, it buys with long bullish spikes while crash markets sell with long bearish spikes. This characteristic feature makes the boom and crash unique but, also scary for beginner traders (See Figure 1 to 4).

How to Trade Boom and Crash

Figure 1: Boom 1000 chart showing a bullish spike.

How to Trade Boom and Crash

Figure 2: Boom 500 showing the default sell candles.

crash 500

Figure 3: Crash 500 chart showing a bearish spike.

How to Trade Boom and Crash

Figure 4: Crash 500 chart showing the default bullish buy candles.

Step 1: Develop a Strategy

Like in every forex market, different trading strategies are employed by traders to make profits. This includes scalping, day trading, swing trading, and position trading. As a trader opts for a particular type of trading strategy, foundational factors influencing such a choice include a person’s trading style, trading psychology, exposure, and experience. All these foundational factors anchor on two basic characteristics: Personality and Knowledge.

Trading Boom and Crash, My Story

When I began trading boom and crash markets, I began my trading adventure as a scalper. In fact, in the first year of my trading experience, more than 95% of boom and crash traders that I have been privileged to meet were scalpers. As much as I knew that there were other trading strategies, scalping was the basic trading strategy I felt was suitable for trading boom and crash markets. This was further confirmed by the way the market was structured, and also on low risk to reward ratio when day or swing trading with very small lot sizes.

For instance, in currency pair trade, using a lot size of 0.01 for a $100 account is a good risk management decision. However, trading boom and crash with a lot size of 0.01 is a difficult adventure that will demand more than 100 pips before a trader gets a profit of $1. For that reason, Deriv.com upgraded the lowest lot size in Crash and Boom market from 0.10 to 0.20 to enable profit maximation.

Generally, scalping the Boom and Crash market tends to be the norm due to the market structure and psychology. For that reason, many traders tend to focus on just lower time frames; precisely, M1 to M15. This rather makes it difficult to convince traders to look away from the spikes (which are so obvious and influencing in lower time frames) and put their focus on the general big picture of the market (the market trend).

However, the boom and crash market can still be ‘day or swing traded‘ if a trader has a good knowledge of the market psychology, price action, and good risk management. In fact, the best way to make profit lies in day trading or swing trading. This is because either of these trading strategies always respect the price action. Figure 5 to 7 shows the price action chart as observed in Crash and Boom markets.

 

How to trade boom and crash

Figure 5: Crash 500 chart showing price action chart.

 

Crash 500

Figure 6: Crash 1000 chart showing price action chart.

Crash 500 chart showing price action chart.

Figure 7: Crash 500 chart showing price action chart.

From the above setup, it is never wrong to begin trading boom and crash as a scalper but it will be wrong if you continue as a scalper. The aim of trading is not just in making profits but also in the personal development of one’s skill. Hence, as one sets out as a scalper, one should also endeavor to be part of the market’s big picture by improving to a day, swing, and position trading

Step 2: Develop a Winning Psychology

To be successful in Trading Boom and Crash you need to have a good trading strategy,  psychology and risk management. Strategy itself is not enough, that is why most traders fail to succeed in the market even with a very good strategy.

How do you develop a winning Psychology for Boom and Crash Market?

The first step in developing a winning psychology is to practice your strategy on a Demo account and understand the drawdown of your strategy before going over to your real account. When I started trading Boom and Crash, each time I lose a trade, especially if a series of spikes caught me, I will be scared of the market for days. And because of this, I will keep losing until I was able to develop a good trading psychology.

Like I told my mentees, don’t expect to win all the time, if you have like 10 wins out of 12 in a week, that is a very good week. For instance, before placing a trade, monitor your risk to reward ratio and place your take profit and the stop loss at the same time before clicking buy or sell on the market. If your take profit is 40 pips, your stop loss should be like 10% of your take profit level.

When your analysis is right, don’t be scared of losing a trade, that is while you have to test your strategy on a demo account before going out to your real account. Then, have a daily target for win/lose, once your real that target, leave the market for that day and review your trading history, monitor your chart and mark some point of interest that wait for the next day.

6 Things to do if you want to win in the Crash and Boom Market.

If you are currently struggling in the market, please don’t give up. I blow my account more than 3 times before I finally understand how the market works. Here is what you should learn from me:

1. Price Action is very Important.

I don’t know how to put this, but from now on before taking any trade, try and understand the market structure. If you understand the market structure, your success level will increase by 90%.

Read More: The Complete Guide to Price Action Trading Strategies

If you want to fully understand how to trade crash and boom indices successful, First, mark out all the higher high and Higher lows in the chart; study price action reaction at those point; (you can include a trend indicator e.g., moving average like EMA 48 or Bollinger band (default setting); analyze and trade with proper risk management.

For EMA , when price is above the EMA, the trend is up, when the price is below the EMA, the trend is down, in this situation, look for the nearest Double Bottom (to buy) or Double top (to sell).

For Bollinger Band, look for Buy Entry when the price touches the lower Bollinger band and a sell entry when the price touch the upper Bollinger band

2. Beware of Stop Loss hunt

When I started trading Boom and Crash newly, I was a victim of stop loss hunt. If I enter a sell trade on Crash 500 for instance at a double top, the market will push pass that point and I will be force to close in red, but after some minutes the market will reverse back to my entry point before deciding on the next direction. After understanding Stop loss hunt, I began to trade with patience especially when I have clearly study and understand the market structure.

3. Risk Management is Very Important

Know when to close a trade in blue or in red; This is a problem many newbie face; even as an experience and a profitable trader, I still close some trades in red; this is because sometimes, breakout can happen, and once you notice this especially from candlestick formation, minimize your loss and look for the next entry point.

4. Develop a target based trading strategy

To become in successful in trading Boom and Crash, you need to develop a strategy that is target based.  That is, having a daily profit target and sticking to it. Your strategy should include lot size, conditions for entering a trade, condition for exiting a trade and how to recover when you close in red.

5. Practice and Patience is Key

Before trading on your real account, practice first in your demo (if you don’t have a demo account, click here to open one). I study all my strategy first on my demo account at least one full week, monitor the result before trading on my real account.

6. Take Trading as your business

Trade as if you are investing to make gain, not gambling; because jumping in to get few pips for quick profit can land you in red. Trade only based on Market structure, and your strategy.

Some Frequently asked questions:

1. Which indicator is best for boom and crash?

Indicators are based on market history and may not accurately predict market movement. However, most traders has recorded huge success by using indicators like moving average to predict trend, Relative Strength Index to spot divergence, etc., but we will recommend that you understand price action. Understanding price action and actively using it to trade Boom and Crash is one of the best strategy, you can add indicator along the line to complement the price action

2. How much does it cost to trade boom and crash

You can open a trade for as low as $5 equity. The bottom line is to get the knowledge first, develop a strategy, back-test it before trading with your real account.

3. Can I make Money trading Boom and Crash?

Yes, you can make good money, but you can also lose all your money. Trading forex is risky, you can lose all your equity, that is while it is advisable to trade with money you can afford to lose. We have so many traders who are making a fortune trading boom and crash. Like I always say, focus on the getting the knowledge, have a mentor, build your confidence level, trade and you will make money from the market.

4. How do I set up Stop loss in Boom and Crash

Yes, stop loss works in Boom and Crash. But for all the boom and crash indices like Boom 300, 500, 1000 and Crash 300, 500 and 1000, stop loss is dependent on the length of the spike or crash that will happen close to your stop loss point.

For instance if you were buying Crash 500 at 3043 and it bought to 3050 and you put stop loss at 3047, and it crashes at 3051, where-ever the crash ends is where your stop loss will end. if it ends before your entry point, you will be in profit, if it goes below your entry point, you will be in red.

Final Thoughts on How to Trade Boom and Crash

You don’t need to trade all the indices to be successful, instead do the following:

  • Find one or two indices.
  • Look for a pattern that occur on each of them frequently (example M and W).
  • Study those pattern and understand it.
  • Build a strategy and a good to risk to reward ratio around the pattern.
  • Practice that strategy first on your demo.
  • Study the result from your demo before implementing it in your real account
  • Work on your psychology and allow trades to either hit stop loss or take profit level based on your analysis.

Goodluck in your trading journey. You can share your experience below this article.

Edited and Reviewed by Warren Ventekas

Risk Disclaimer

Deriv offers complex derivatives, such as options and contracts for difference (“CFDs”). These products may not be suitable for all clients, and trading them puts you at risk. Please make sure that you understand the following risks before trading Deriv products: a) you may lose some or all of the money you invest in the trade, b) if your trade involves currency conversion, exchange rates will affect your profit and loss. You should never trade with borrowed money or with money that you cannot afford to lose.


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209 thoughts on “How to Trade Boom and Crash Indices Successfully”

  2. Good evening sir
    Please I need help trading boom and crash.My account which started with 300 dollars is now 222 dollars . Please any help will be deeply appreciated
    Thanks OJ

    Reply

  7. Please i have lost over $2000 on this scalping method. How can you assist me because I am determined this is what i want do. I have listened to so many youtube strategies in vain

    Reply

  10. Good evening sir,Am Wilson..I trade on a 100+ live account… Pls I need your help on how to trade properly on crash500 and Boom500….
    +2347062348149-my WhatsApp contact.

    Reply

  19. Good day sir.
    I’m a newbie in forex, still trading with demo and making huge losses. I could really use your help right now.
    Here’s my WhatsApp contact : +2347045144423.
    Thanks a lot

    Reply

  20. Hello guys am mk if you are struggling to trade boom and crash am here to manage your accounts and you can buy my stratergy becouse its 99.99 percent wrkng whatsaap me +264815610861

    Reply

  25. Good day sir, though I have been using demo account in binary.com and I was able to link my binary account to mt5 account but I tried to to switch to real account on mt5 I find it difficult.

    Pls is there any way you can help me out.
    Thanks.

    Reply

  27. I’ve. Jst started trading crAsh n boom I. would really appreciate your help Sir with a strategy on how to trade these two

    Reply

  33. Good day people, I have developed a working strategy for crash and boom that gives u signal of a series of spikes, contact me at +263 777 249 390. I can happily share results

    Reply

  37. Good evening sir
    Please I need help trading boom and crash.My account which started with 300 dollars is now 222 dollars . Please any help will be deeply appreciated
    Thanks all

    Reply

  39. What is d minimum amount in dollar dat j can have in my deriv synthetic accout(real account)to start trading crash and boom.I have less than 10$ but it says ‘not enough money’ when I try to trade with 0.20 lot size.
    My mail is rayonh6@gmail.com.
    Send me link to your whatsapp group.

    Reply

  48. I want to learn how to trade on boom and crash. My account which I started with 100 dollar is now 15 dollar. Please help me, my phone no 08023963711

    Reply

  54. i like ur website and plz whats the best time of the week to trade indices like boom and crash and nas100 and vix75 and us30 and etcs?

    Reply

  55. 08028028455
    Plz help me out, i find it difficult to trade understand boom and crash market trending and successful trade.

    Reply

  58. Pls help me I can’t trade boom and crash and make successful trade I can join any strategy group also. ‪+1 (931) 610‑1174‬

    Reply

  61. Any one in kenya and is intrested in learning boom and crash trading (strategy), reach me on 0715860466 (whatsapp) and I will direct you accordingly. Especially those in Nairobi

    Reply

  64. Hi I’m having a good time trading boom and crash but I need to Learn more pleas help. Here is my what’s app number +27655998346

    Reply

  68. I AM INTERESTED IN TRADING BOOM AND CRASH AND OTHERS. BUT I HAVE NO IDEA HOW TO. I NEED HELP. I ALREADY HAVE BINARY.COM ACCOUNT.

    I NEED SERIOUS HELP AND MENTORSHIP.

    WHASSAPP NO: 08035423995

    Reply

  72. Sorry to say these article was not helpful in anyway. The heading of the article was “How to Trade Boom and Crash Indices Successfully”. But the is nothing pointed out on the article that tells how to trade the boom and crash. The article was only all about leman-explanation.

    Reply

    • What I don’t really understand is the bollinger band structure because it has 3line shown, the exm.here talks about only the up and down lines in bollibollinger, what about the middle line if Price touches it, what is the decision to take.

      Reply

  76. Henry, Happy new year to you. I followed your hints on boom & crash usi G moving ax. 9 a d allegators indicators. With the right signal one enters the trade with losize 2 and make 3stickz then exit. You said each candle stick gives $3. How go u get the m u used. Because I know m signifies minutes m m1 m5 m15 etc. Pls let me know how you set the mof $3.

    Reply

  78. hello author,
    While making practice on how to trade synthetic indeces on my demo account, I have faced some challenges on failing to understand how some syntheti indices such as Boom & Crash and Step and Range work especially when it comes to risk management and excecution of pending orders. For example when i put my stop loss somewhere and spiking candle breaks through against my direction, I tend to lose more than i expected. Another problem is that the pending orders tend to be pushed futher away from where i placed them. Please could you give more elaboration on these scenarios?

    Reply

  80. Please, how do I know when to enter the market on boom and crash
    Pls sir I need ur help to understand boom and crash.

    Reply

    • Hello Owuyile, Stop Loss and Take profit work the same way on Deriv. If you sell Crash 500, say at 6347, then put Take profit at 6345 and there is a long crash till 6340, your take profit will be at the end of the crash not at 6345 that was your initial take profit point.

      The same thing goes for Stop loss, if you buy crash at 5489 and put stop loss at 5480 and there is a long crash till 5476, your stop loss will be at the end of the crash not your initial point

      Reply

      • Dear I want to learn stop loss strategy, because at there boom and crash market they put limit of stop loss like 500 point and 1000 points limit. Is there is any other way to stop our loss in near of buying range.

        Reply

  82. Pls I need help with understanding 😔 😪 price action here is my WhatsApp number 0808 128 2964 thank 🙏 you and God bless.

    Reply

  84. Hello Mr. Henry, please I am a newbie in boom and crash trading. I need a strategy to successful to this. Thank you.

    Reply

  86. Dear I want to learn stop loss strategy, because at there boom and crash market they put limit of stop loss like 500 point and 1000 points limit. Is there is any other way to stop our loss in near of buying range.

    Reply

  90. Thank you sir for sharing a costly knowledge with us, sir I’m a newbie and I scalp boom and crash, but I have blow my acc for more than 3times and it hurts me so much sometimes I feel like to quit the FX trading, my challenge here is on the spikes on boom 1000, 500 and crash 1000, 500, so sir how will I know when spikes will occur in scalping this indices, sometime after being in a good profits, I land up loosing everything including my balance 🤦🤦 I have finished my money on buying indicators and it doesn’t still give me a perfect trade, some indicators doesn’t show when spike occurs, it’s after spike occured, de indicator will now indicate it and that’s very bad so I’m totally confused and tired so sir please help me, I need help only on how to know when spike will on a trade, I need a scalping strategy that will help me escape this long spikes on this indices pls sir 😭😭

    Reply

  92. Please sir… Does stop loss commands works in boom synthetic on DERIV..
    My account blow twice today … Irrespective of my stop loss been activated
    Please is there anything I might not b doing right?

    Reply

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