THE ULTIMATE GUIDE TO TRADING BOOM AND CRASH INDICES

(CATCHING SPIKES BEFOREHAND)

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DISCLAIMER
Trading in the Forex market is a challenging opportunity where above average Returns
are available to educate and experienced investors who are willing to take Above
average risk. However, before deciding to participate in Forex trading, you Should
carefully consider your investment objectives, level of experience and risk Appetite.
Most importantly, do not invest money you cannot afford to lose.
Moreover, the leveraged nature of FX trading means that any market movement will
have an equally proportional effect on your deposited funds. This may work against
You as well as for you. The possibility exists that you could sustain a total loss of Initial
margin funds and be required to deposit additional funds to maintain your Position. If
you fail to meet any margin call within the time prescribed, your position Will be
liquidated, without prior notice to you, and you will be responsible for any Resulting
losses. Investors may lower their exposure to risk by employing proper risk
Management practice.
Trading Boom and Crash is just like trading any other indices. However, the nature of
boom and crash is a bit different from any other indices like vix 75, step indices. The
thing about the family of boom and crash is it is mostly traded in one minute time
frame. These indices are mostly traded using strategies and tools that will help you to
catch the spikes as they are the most important and profitable. They give you profits
in a matter of minutes than other indices and currencies.
BOOM AND CRASH can be traded using price action as well but it will need the aid of
tools to help and catch spikes. This strategy will help you to make profit consistently
and to be honest with you forex is not a win-win type of business they are loses that
are incurred but the main goal in forex is to have a better winning percentage than that
of your loses. Also, in forex, there is no 100% strategy … but if you follow this strategy,
you are guaranteed that 80% of your trades will make you profits.
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 BOOM VS CRASH: THE BASICS
The Crash 500 Index has on average l drop in the price series every 500 ticks, while
the Crash 1000 Index has on average one drop in the price series every 1000 ticks. In
other words, in a market with a Downward (Crash) trend, look out for a drop that
happens every I ,000 ticks on average.
The same applies for boom; For the Boom 500 Index there is on average l spike in the
price series every 500 ticks, and for the Boom 1000 series there is on average I spike
in the price series every 1000 ticks, in other words in a market with an upward trend
(Boom), look out for a drop that happens every I ,000 ticks on average.
Boom is for catching buy spikes and crash we always catch sell spikes whenever the
spikes appear we need to catch them. We don’t buy crash and sell boom. We only sell
crash and buy boom.

TRADING STRATEGIES PART 1: SPECIFIC MOVING AVERAGES

The moving average is a twofold indicator in essence:
1) It serves as support and resistance
2) It displays the direction or trend of the market; showing whether the market is an
uptrend or a downtrend.

We will work with two specific moving averages which are:

1) The 200 Exponential moving average
(EMA)
2) The l0 Simple moving average (SMA)

SETTING UP MOVING AVERAGES

For a PC we need to go to trend indicators as the arrow indicates on figure 1 a
Fig 1.a
When you click on “trend”, you will realize that there will be an unveiling of many
trend indicators. Locate the moving average and double click

Fig 2.c shows how you can set up the 200 exponential moving average. Period number:
200, method: exponential, style: yellow.
Then comes fig 2.d for the 10 SMA with period:10, method: simple, color: red.
Fig 2.d

Your chart should look more like on fig 2.e. do not forget to put your timeframe on a 1
minute.
Fig2.e
 MOVING AVERAGES AS SUPPORT AND RESISTANCE
By definition, Support is a price level where a downtrend can be expected to pause due
to a concentration of demand. On the other hand, resistance is a price level where an
uptrend can be expected to pose due to a concentration of supply. At support and
resistance, the price will either bounce back or change the direction, or breakout by
continuing with the trend; often- times after many difficulties.
So, these moving averages do act many times as support and resistance and because of
that we can know when to enter a trade and when to exit too.
Let us start with how we can use the 200EMA to our advantage and catch sudden
spikes
With the fig 2.j, you will see how boom 1000 did reject at support level many times. So,
if you enter a buy trade near the support level, you will most likely be able to catch a
spike.
However, note that it is not all the time that there will be an immediate spike as soon as
the 200EMA is touched by the price. It can take few minutes to make a spike after the
200EMA is touched but when a spike happens, you will make profit. Analyze the figure
below for a better understanding;

Through the above figure you will see that it took some minutes before there could be
any spike. There was no spike immediately the 200EMA was touched, but overall it
ended up in profit.
Let us also see the same behavior with crash. With the figure below, it acted as support
and made the price reject few minutes after the price hit the 200EMA. Black arrows are
for entries of trades and yellow arrows are for exits of trades.

Fig 2.k

Now let us talk about the 10 SMA. This specific indicator serves as support and
resistance in very particular instances:

For boom, there is a way of catching spikes through 10SMA when boom start going on
an uptrend. The uptrend is the overall direction of the market moving upwards. So
whenever at least 2 spikes have happened close to the 10SMA then get ready for 2 or
more other spikes around the 10 SMA.

The figure below shows with stars how you do spot signal spikes (in black stars) in
order to anticipate upcoming spikes (in red stars).

Fig 2.1
Let us get another example for better under- standing. The figure below shows boom
1000 going through an uptrend. Through the 2 first spikes, you can make more money
by anticipating the upcoming spikes...

Fig 2.n

Note that the same is applicable with crash. There should be a downtrend (i.e., the
overall direction of the market moving downwards) with at least 2 spikes around the
10 SMA in order to be confident to enter the third spike around the 10 SMA.
 MOVING AVERAGES AS TREND LINE

We stated earlier that moving averages can in- deed serve as trend lines showing the
overall direction of the market. It is important to know that the trend line is best
portrayed on a higher timeframe like l hour timeframe. Through the higher timeframe
you can detect the overall di- rection of the market.

Fig 2.n shows that boom is on a downtrend. This being so there will be less spikes in
the market. Because spikes on boom are directed upwards but as you can see for the
market to go down- wards, there has to be less spikes. This market can be traded but
one should be very careful to open positions anyhow.
Fig 2'.'o 'shows”'the direction"’ of the market as being an uptrend. For this case there
will be less spikes on crash 1000 because spikes are directed on the downwards
direction but the trend is up- ward. This being so, one should trade more care- fully and
not enter trades anyhow.
Understand that the other way round is also important to consider: boom in a
downtrend and crash on an uptrend show that there will be more spikes and you can
trade more safely and more swiftly.
Remember that despite seeing the overall trend, it is advantageous for you to go back
to the l min time frame in order to look for sniper entries. These will even help you
spot multiple spikes be- fore they happen.
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TRADING STRATEGIES PART 2: DYNAMICS SECRETS OF THE RSI YOU NEVER

KNEW
The Relative Strength Index (RSI) is a momentum oscillator that measures the
speed and change of price movements. The RSI oscillates between zero and 100.
Traditionally the RSI is considered over- bought when above 70 and oversold when
below 30.

Now try to set up your RSl indicator. By now you should be able to find indicators. In
case you forgot, kindly get back to the previous chapter and see how we did find
indicators.

For the computer, after you find the RSI, click on it. Settings will display. Follow the
template below then click "ok".

Wg3.b

FIRST DYNAMIC: RSI AS OVERBOUGHT AND OVERSOLD

From the beginning of the chapter, it was brought to our attention that The RSI
oscillates between zero and 100. Traditionally the RSI is considered overbought when
above 70 and over- sold when below 30.

Fig 3.d shows overbought levels “in red circles” and oversold levels "in white circles"

Fig 3.d
Since we would want to catch spikes, you can immediately see that as soon as the
overbought level was hit (see red circles), there was a potential sell opportunity and if
you entered a sell, you could have caught a spike and be in profit. Therefore,
understand that for boom we look for an overbought opportunity in order to enter a ‘r
sell" position. But on crash we look for an oversold opportunity in order to enter a
“buy” position.

SECOND DYNAMIC: RSI DIVERGENCE

Divergence is an important strategy that can read potential market reversals by
comparing the direction of an indicator in contrast with the market direction.
Divergence occurs when the price of the market and the indicator follow two different
directions. A figure will help you visualize what divergence really is:
Fig 3. I
See? The figure 3.f shows how the case number 1, the 2 PICS of the RSI pointed
downwards while the price of crash was going on an uptrend. That was a divergence.
The same happened in case number 2 and case number 3.
So, for crash, if as soon as the price of the market reaches the price of the previous pie,
and when you check on the RSI the direction is a down- trend, understand that there is
divergence and a spike is likely going to occur.
Now, if you draw a white line on every last peak and wait for the price to reach that
zone again. Whenever the price reaches the price of the previous peak, check your RSI
and see if it is on a deep downtrend. If yes, then enter a sell because a spike is more
likely going to happen.
Tip: This dynamic of the RSI has proven to be the most accurate among all other
dynamics.
For a better understanding, let us analyze boom and see how through divergence you
can spot winning opportunities.
Fig 3.g

See? As soon as there is a divergence, there is a high probability of a winning trade.

With boom, whenever the price reaches the previous lowest point, check your RSI.
Whenever there is a high probability winning trade, you can enter a buy position
without a lot of stress.
The reality behind divergence is the loss of momentum of a trend. Even if it does not
show on the chart that there is an exhaustion on the trend, the indicator reveals it
through a divergence.
Remember that there is no strategy that is 100% accurate, but there are strategies that
have a high level of accuracy and the divergence dynamic, when used properly, can
give you a row of outstanding winning trades. More winning trades, more profit; more
profit, more money.

THIRD DYNAMIC: TREND LINES, SUPPORT AND RESISTANCE IN RSI

The RSI can of course display strong support and resistance levels. In case you forgot
what sup- port and resistance is, kindly get back to the previous chapter where we did
give a proper definition of support and resistance.

Fig 3.h

Through fig 3.h you can confirm that there was a strong resistance on level 56 of the
RSI. This resistance level spotted many spiking entry zones. See? You only needed two
support areas in order to spot the two or maybe three other spikes...

This dynamic is even perfect when used on l hour timeframe;

Fig 3.i
Through the figure above one can identify the highest level on the RSI which acted as
resistance. Knowing the highest level, one can easily spot a strong probability of
reversal. You will be able to identify a change in the trend of the market and by
rebounce, adapt your strategy to the trend of the market.
We can also spot specific entries through trend lines drawn on the RSI
Fig 3.k

Through trend lines, one can also spot good entry points. However, these instances do
not occur all the time and they should be used with other strategies given above in
order to be more specific.
The other disadvantage of the trend dynamic is that you can miss out two first spikes in
order to catch out the third md the following ones...rea- son being that without two
first pics, on cannot draw a trend line.

Did you make it this far? Congratulations! Now to the best Part…

ALL STRATEGIES TRADED IN HARMONY

In previous chapters we discovered secret strategies that revolutionized our way of
trading boom crash indices. They can of course be traded separately, but it is an
advantage to combine forces for better results. Harmony is key. This being so, you will
learn in this chapter various ways you can use the combined indicators to read future
movements of the market.

TRENDING
One important factor we talked about concerning the two set of indicators is that they
can unveil the trend of the market. Whenever there is a trend, one can confirm its
strength if both set of indicators point in the same direction of the trend. Let us take a
look at a figure for a better understanding.
Fig 3.a

On fig 3. l the big arrow points out the direction of crash 1000. Pointing out that it is a
down- trend. The first indicator which is the 200EMA in yellow has already approved it
because the current price and previous prices are below the 200EMA.
On the other hand, the RSI has confirmed it too with the first two pics rounded in
purple. Those two pics circled in purple are enough to draw a trend line. When the
trend line is drawn, you can easily know the trend of the market.
As if that was not enough, when both indicators point in one direction, it will be easier
for you even to catch specific entries for spikes either through the 10SMA or through
the resistance level on the RSI. Remember this:
“The safest way is to set orders or entries in the direction of the trend. If the market is
on an uptrend, you are safer if you look for buy entries. If the market is a downtrend, it
is safer for you to look for sell opportunities”.
This initiative can be made possible with the combination of both moving averages and
the RSI. See? The IOSMA gave accurate signals together with the RSI. You could
eventually anticipate many spikes.
Even if the following parts of the charts were hidden to you, still you could have
anticipated the spikes because these indicators do not re- paint. An indicator Repaints
when it changes its past forms or data as soon as its expectation goes unfulfilled.
A good example is that of fractals that some- times disappear when a set resistance or
support is broken. So, you are safer with the RSI and mov- ing averages

THE DOUBLE ENTRY CONFIRMATION

On the previous section we identified entries through trend lines. Now let us spot en-
tries through support and resistance offered by the 200EMA together with the
overbought and oversold zones of the RSI.
Fig 3.b

Through the figure 3.b you can see how, with the first and the second instance, the RSI
released a signal as the price already reached the over- bought level (i.e., above the
level 70). This was confirmed sooner by the strong resistance from the 200EMA.
 PLAN B GAMES
Kindly pay attention:
Whenever you trade, you should follow our plan and be able to leave the trade when
your plan b is brushed off. Here the plan b is that if per ad- venture the price does not
spike at the first entry signal, wait for the second signal to occur. Now the market is
more likely to spike on the second signal.
But if does not, get ready to exit the trade even if you are in a loss. Remember that we
are trying to minimize losses and maximize profits.
Strategies given to you in this book do yield a higher probability of success, however
they are not the HOLY GRAIL that never fails. We are trying to save you from losses
caused by greed and lack of discipline.
In other words, when we follow the fig 3.b, on the crash 1000 chart, we realize that the
first indicator that gave the signal was the RSI. How- ever a spike did not occur as soon
as it did reach the overbought zone. The plan B here is to wait until it reaches another
signal which is the resistance of the 200EMA.
This also happened on the second instance that is seen on the fig 3.b, where after the
first signal did not deliver as expected, we held the trade hoping it rejects either as
soon as possible, or as soon as it reaches the resistance level set by the 200EMA. When
our plan A was wavering, our plan B took over and succeeded: there was a rejection on
the resistance area set by the 200EMA.
Now note that there are few cases where even our plan B fails. And you need to be
humble enough to minimize your losses by exiting your trades.
This was supposed to be discussed in the “money management” chapter of the book,
but it is better to address it now so you understand how to manage your money in
accordance with the combination of strategies.

SUMMARY
Although strategies given in previous chapters can work interdependently, they work
efficiently in symbiosis. We discovered that there is a higher probability of success
when our positions are in line with the leading trend of the market; especially when
both the moving aver- age and the RSI confirm the direction. We also dealt with the
plan B alternative which is an extra arrow in Our quiver. We understood how to use it
and what to do in case it does not work out as expected.

MONEY MANAGEMENT
Money Management is one of the most important area in trading boom crash indices as
well as in trading at large. It helps you Control risks in a fashion that will allow you to
be consistent in your profits, grow your trading account balance and continue trading
through the inevitable dicey moments.
Money management is often non-intuitive and generally does not require charts or
figures. Of course, there are minor exceptions to the general rule; like the plan B game
that was talked about in the previous chapter. There is no cogent strategy that stand on
pillars without a set of money management in it. With trading boom and crash indices,
there are many people who have multiplied their account by 3, 5 and even 10 but have
lost everything again sim- ply because of greed and lack of money management.
This is why although it might be simple, it takes a lot of discipline to put money
management into action.
Money management is not for smart traders, but for disciplined traders. One can be
smart with the ease understanding of the market but does not have the discipline to
implement money management.
Since boom and crash indices do not respect stop losses stop orders (buy stops and sell
stops), it is paramount to find how to minimize losses with- out putting stop losses.

TRADING SPIKES IS ALREADY A MONEY MANAGEMENT METHOD

Trading spikes is already a money management method because when you look for
spikes, there is no spike that catches you by surprise so you can be in a loss. The price
that goes against you for a moment is calculated and you can know how much you are
willing to loose for any given position. But when you trade against the spike, in case it
happens, you got no idea how much you can lose neither do you have control over it.

MANAGING MONEY THROUGH LOT SIZES

It is important for you to know the approximate lot size that can be allowed with
different capital sizes.
To put it bluntly, a lot is simply the size of your trade

1) The approximate maximum lot size of

100$ is 3.

2) The approximate maximum lot size of

1,000$ is 30

3) The approximate maximum lot size of

20,000$ is 600

• The approximate maximum lot size of

100,000$ is 3000
This information is given to you so that knowing the maximum capacity of your capital
in handling lot size. Even though you are 100% sure on your entry do not put your
maximum lot size as at times you might be so confident with an entry and per
adventure it turns out to be the wrong move. If you are moderate in your lot size and
consistent in trading, you can make a 100% return on a daily basis. You can even make
more than that, if you use the strategy right and follow the right money management.
Money management is a very important factor in trading and yet it is very neglected,
especially by amateur traders who just started trading.

THERE IS A WALLET WITH BINARY.COM

The Meta trader account and the wallet are two different accounts. The wallet is for
mainly for storage (although in other instances It can serve as a trading account), while
the Meta Trader S account is mainly for trading. Whenever you make profit, transfer a
part of it in the wallet. Remember that although one can be consistent in trading, it is
very important for one to know that sometimes the unexpected can happen and
savings can make a difference.
This is also a good money management method. You cannot really be told how much of
your profit should be released. The choice is entirely up to you; after all it is your profit.
Make sure there is a backup money just in case.
WHEN PLAN B FAILS
There are times that even plan B fails. this being so, you should be humble enough to
recognize and accept the loss while it is still early then exit trades. Higher returns
never exclude losses. Higher re- turns only mean higher profits with minimized losses.
The way to minimize losses is by exiting in case plan B fails. Trading without plans
leads to successive failures. Whenever you know how to fight greed, it will be easier for
you to minimize your losses and manage your money effectively.

CONCLUSION
Now that you are empowered with knowledge, it is your role to put it into practice.
Consistency in trading is key when trying to perfect and sharpen the strategy at hand.
The more you trade, the more you develop a sub- conscious skill that will enable you to
make trad- ing decisions that are accurate. The consistency of trading makes you enter
trades without fear nor trembling.
Remember, better trades and better spiking entries are those that are spotted in a
sideways market or in the direction of the spike. For crash 1000 and crash S00, good
trading setups are when the market goes sideways or when the market is a downtrend.
On the other hand, the market is favorable for boom 1000 and boom 500 when the
market is goes sideways or is an uptrend.
Trading against the trend might still work but out well, but never for too long because
facing the waves is never too friendly. But diving in the direction of the wave has less
stress and resistance.
The best way to get to understand the main trend of any market is by analyzing bigger
time- frames like l hour chart or 4hour charts. When you are able to spot the leading
trend through bigger timeframes, then look for entries in accordance with the
corresponding timeframe.
Remember also that there is no successful trade without successful money
management techniques. To grow your account does not mean you will never make
losses; to grow your account simply mean that you will have minimized losses and
maximized profit. Do not be anxious for nothing when trading, stick to the rules and
manage your trades and your money well as you have been taught in the book.
A trader should be psychologically fit by not fall- ing in the trap of greed and the trap of
fear. The best way to overcome greed and fear and greed is by sticking to your trading
plan. Master all strategies but above all look out for the divergence strategy because
according to experience it has proven to give more accurate signals.
FINALLY: I wish you the greatest success as you delve enter into this amazing and
exciting journey of extracting money out of the boom crash indices. I believe you
eventually get the lion’s share in this market.

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