boom and crash relies heavily on technical analysis, can feel quite daunting to novice traders. However, by understanding the basic principles of trading synthetic indices for this year 2022 and by employing a solid risk management strategy, trading boom and crash might be an effective way to grow your equity account.
We’re going to give you the top secrets on how to trade boom and crash. We’ll explain what the boom the crash index is, how to trade boom and crash indices, and concepts that you need to understand, like boom and crash support and resistance.
While there is no single strategy that will provide you with a 100% chance of success, we’re going to provide you with some simple strategies that might help you trade boom and crash successfully. We’ll also answer some popular boom and crash FAQs at the end of the article.
But before we dive into boom and crash trading secrets, let’s first answer the simple question of what are boom and crash indices?
What are the boom and crash indices?
You may have heard of the boom and crash index. When trying to explain what are the top secret on how to trade Boom and Crash, it’s impossible not to expand the Boom 500, Boom 1000, Crash 500, and Crash 1000. These are synthetic indices used in foreign exchange (FX or forex) trading. Those numbers refer to the rise and fall (on average, 1000 to 500 ticks) of price movements.
A tick is the minimum increment that prices can change on the market and denotes the smallest possible price movement to the right of the decimal. Each increment in the price digit is a tick. The tick size is the price change between the consecutive bid and sell prices of the asset being traded.
Key Takeaways:
- Boom and crash indices are known for their sudden spikes. Hikes and drops occur rapidly and can be as big as 50+ pips.
- The boom phase occurs when an upside spike results in sudden price increases.
- The crash phase is when prices decrease extremely fast. Positions can close at the end of a spike, resulting in heavy losses quickly.
The difference between Boom 1000, Boom 500, Crash 1000, and Crash 500
The boom index (1000 – 500) is the average of a spike in price ranges occurring every 1000 – 500 ticks.
- On average, a spike occurs every 1000 ticks In Boom 1000, whereas a spike occurs every 500 ticks in Boom 500.
- The Boom 1000 index is more volatile than the Boom 500 index.
The crash index (1000 – 500) is the average price decline that occurs every 1000 – 500 ticks.
- In the Crash 1000 index, a price drop occurs, on average, every 1000 ticks.
- In the Crash 500 index, a price drop occurs roughly every 500 ticks.
- Unlike the Boom index, the Crash 500 is more volatile than the Crash 1000 index.
How to trade Boom and Crash?
Unlike forex pairs, trading boom and crash relies purely on price action charts and technical analysis without any influence from news, current events, or policy changes. The boom and crash index is completely independent of the currency and commodity markets.
Even though the synthetic indices market behaves like a traditional monetary market, it is simulated. The behaviour of the indices is created from randomly generated numbers.
Reasons Why Most Traders Quit Trading Boom and Crash Markets
Whenever I get this reply, I always smile because I can easily know what befalls those whose sole interest is to just make money.
Forex trade both it in the crash and boom markets and currency pairs is much more than just money making. It is a career on its own. Forex helps you know what is happening in the world. It is an easy way to know how the global economy is and how you can use the information for your ultimate good. In as much as making money is the ultimate aim of every business, your success or failure in Forex absolutely depends on how well informed you are or can be as regards the methodologies.
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Today, I will be sharing with you why people quit trading crash and boom markets. And I will interchangeably use Forex as a general market term for boom and crash markets. Somehow, I have this feeling that you will see the common mistakes and misconceptions you had about Forex; most of which could be the reason why you are not profiting in your trades. As you identify these pitfalls, I desire that you seek knowledge and grow.
Why Most Traders Quit Trading Boom and Crash Markets
1. Forex trade is for men and women who are not weaklings.
Forex is for the strong and courageous. If you are a type that desires approval or needs courage from others, then forget it. You will not survive for long in the market. This is because you need to draw courage from your within. You need to know that you can succeed and then find out how to succeed. To do this, you will need to remain courageous despite the days, weeks and months if not years of not having periodic returns from trades. This is because, without the courage factor, you will quit. To fuel your daily courage, I always encourage traders to invest in means that will bring knowledge. That is because, the secret of your success is in the pages of a books or in seminars and other lessons that could be drawn from a coach.
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2. People quit Forex when they do not make the type of money, they were told they could make in a short time.
Like I often say, Forex is not a get-rich-quick business. Forex does not make anybody rich quickly. Anybody that you have succeeded in Forex has spent time, energy, days and nights in study and personal development.
However, when you meet these guys in their glory days, they tell you the prospects of Forex without sharing the struggles. Do not be deceived. There is a struggle you will go through and if you are not patient with yourself to learn the basic skills, you will quit. I dare you to challenge anybody that quit Forex and you will be amazed that this is one of the main reasons.
But, does this mean that Forex cannot make you rich? Sure, it can. In fact, Forex will make you rich quicker than you can imagine (even when it is not a get-rich-quick business). How? Because when you have gained mastery of the basic hidden secrets in Forex, the losses and delay you encounter during the early period of the trade can be gotten back in a few weeks.
3. People quit Forex because of haste.
Haste as in, impatience. We are in a time where the rat-race of quick-quick syndrome has taken over everything. Even in the financial world, we see the quick-quick syndrome in our transactions and other financially related matter. Because of this, boom and crash traders go out scouting out for new strategies daily. They neglect the culture of growing their trading skills. Without proper understanding of the boom and crash market, traders use these new strategies to rush into the market with a belief that they will come out smiling with massive profits. And like a joke, if you rush into the market, the market will make you to rush out.
This is because, Crash and Boom markets does not operate the way many traders assume. You need (not necessarily new strategies but) patience to have a timely entry and exit (strategy irrespective). Timely entry and exit can only be in place when impatience is taken care of. It takes patience to wait for the market to show you when to enter and exit. So, avoid haste!
4. People quit Forex markets because of consistent losses.
In every business, profits and losses are the end result of transactions. However, consistent losses seem to be the bane of many traders of boom and crash owing to the presence of spikes and drops per every 500 to 1000 market movement (tick). Well, nobody loves to be on a draw down. But, when it becomes a part of your daily trade, it then becomes a problem. How do I know this? Because, I have been there.
Losses make you either quit and look for something else to do with your money or, make you find out why you are not succeeding. Many traders rarely want to know why they are losing. They are not just happy that they have lost. Without trying to know what they did not do right, they quit. If you find out why they lose consistently and tell them the right thing to do, it is either too late or just another empty promise.
This is the main reason why Forex traders will tell you that Forex trade is not for everybody. Now, you know who Forex trade is not for. These group of people (quitters) are the ones telling you, Forex is not for me. Trading is not my thing. But, if they know what you now know, will you think like them? Yes, there are other set of people who quit trading because of time and other demands or personal interest. These ones may encourage you to make out time to learn. Forex is not for ‘assumers‘. Its hard work. The truth is that, many traders who are successful today have, in more many occasions than you can imagine feel like quitting. Myself inclusive. What makes them continue is PROOFS. Proofs that there is a way to succeed in trading and then following the rules.
If Forex has made anybody rich, you can be the next to share your proof.
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