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Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high
degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level
of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that
you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you
have any doubts.
HELLO TRADERS
This document is going to be guiding you on how to trade Boom 500 and Crash 500. I am
going to make it as simple as possible for many of you to easily follow. The main purpose of
it is to enhance your trading experience and also help you make numerous withdrawals
rather than deposits.
Fig 1 Fig 2
The information displayed in the above pictures is essential when you setup your indicators.
Basically what is needed are the 3 Moving averages and Relative strength index to start the
ball rolling. Fig 1 shows how you set up your EMA 200 (Exponential Moving Average), the
colour of the moving average you can put the colour of your choice. In Fig 2 it shows you
how you set up your EMA 50 but on this one you apply at median price please do refer to
the above picture. Moving on in fig 3, this is the Exponential Moving Average 9 you apply it
to close and you have to choose the colour of your choice. Lastly on setting up indicators we
have the relative strength index, use period 3 apply to close you have to put 3 levels. These
levels are as follows, level 10 is strong buy, level 50 is take profit or wait and lastly is level 90
which is strong sell and again you have to put the colours that you like. It will be much easier
if you use the same colours as mine such that it will be less confusing when you are
following my charts and examples later.
You should not be confused I only rotated my screen, having set up the indicators all you
charts should appear as one above.
As it can be seen in the above picture we can take positions from the information provided
by the use of support and resistance. Also take note of the Moving averages both EMA 200
and EMA 50. EMA 200 is giving us confirmation of the trend meaning that when taking sell
positions they must be taken when price level hits our resistance zones. Take note that
when market reverses you should wait until the reversal candle completes this is to ensure
that surely the trend is in the reverse mode. With the information presented above there
are several entry points that can be held.
Now let us look at another example, in the above picture we can see that two lines were
drawn and the candlesticks were moving in a channel, each time when the price level
reached support line it reversed upwards( left blue arrow). The line was acting as support
zones and it is seen later that support line was broken. As seen above it represents buying
opportunities (when price level touches support). If we look at the two arrows to our right
they shows a resistance line, market is reversing at that level and several retests has been
noticed hence they means entry points (perfect selling opportunities). Ladies and
gentlemen this information needs to be digested well, one should take more time grasping
these concept such that consistence profits can be made.
Moving on, in the above picture we can see the indicators we setup that they are now at
work. EMA 200(red moving average) has been telling us the direction of the trend. The chart
above is Boom 500 index chart and it is clearly selling all the way. The next question will be
how can we spot entries positions??? If you have been following you now know when to
enter. Those three arrows shows us the perfect time to execute trades. Since it is a down
trend we sell, if you get your entries right it therefore means that there will be no fear for
spikes as the market is on the downtrend.
The next thing that you should do is to set up your take profit; you should not be greedy as
the market can be disastrous if you try to take everything. You should know that boom and
crash do not respect stop loss, spikes are superfast that it can be hardly detected by our
normal computers maybe super computers can do the job therefore we should be cautious.
After we draw all necessary support and resistance we can go across all time frames and it
should be noticeable. This strategy applies to both Boom 500 and Crash 500 even other
trading assets, when you master the basics you have better knowledge about forex trading
as a whole. Furthermore after identifying support and resistance you can then come to the
1m time frame to see if you were accurate enough on identifying these zones. Below is the
example and I have used the same support lines/levels that I have already identified before.
From the above information we can notice that from the support line 9060.617 respected
the setup. It is clear that when price level hit that support zone it reversed not once but
more than two times check out the areas where I put blue circles. Boom and Crash 500
respects support and resistance. We can all ask when the RSI index starts to work, well here
is the example when you start to look at your RSI indicator
Firstly let us look at the purple arrow where it is pointing, it is actually pointing at strong buy
region and please note that at times it might go beyond strong buy region. With boom 500
index when you are trading spikes that’s the area that you will be focusing on the most,
then with crash 500 it will be the opposite will further look into it. Now look at the orange
arrow, it is pointing at the support line 9060.617 meaning that the market will reverse. You
need at least two confirmations for you to enter a position, when the price level was rushing
towards the support and when the RSI was also in the strong buy region one could take the
trade knowing a spike will come. The above chart is in 15min timeframe meaning one candle
is 15mins long.
Red arrow is showing us that the market entered strong buy and it stayed for a bit longer
and eventually it spiked upwards. We should take into consideration that whenever we
draw support and resistance lines accurately there is high probability that you will be in
profit. Use of right lot sizes is key, it will make you stay in the game for long and it also
makes it possible for you to withstand the small bearish candlesticks (Boom 500).
We now have to check out Crash 500 index, because we have been using Boom 500 as
reference now it is high time that we use Crash 500 index chart so that you can see it is
really easy to follow. Crash 500 index has small bullish candles and occasional bearish
candles. When trading this asset you have to adhere to support and resistance zones for
you to catch crashing spikes as they happen. I am going to insert more examples on crash
500 index for easy referencing.
From the above picture I have drawn a resistant line (10541.734) which is easy to see from a
distance such that anyone can notice the activity going on. The price level 10398.465 (blue
in colour) we also notice that it has been tested three times meaning one can draw a
support line at that zone. Furthermore the two orange arrows are showing where the
market reversed hence one can open sell positions when price action touches resistance line
(10541.734). Since it is a 15min timeframe when you catch those spikes it therefore means
you will be in good profits. Please bear in mind that we use bigger timeframes to draw
support and resistance and it can be 15min / 30min / 1hr and 4hr
When we check at our moving averages we see that the moving average that shows us the
trend’s direction is going sideways (check the formation of candlesticks inside the rectangle)
it therefore means that the market is consolidating. The only way to spot entries is to use
resistance and support areas. But again you should exercise great deal of patience so that
you can spot good set ups which will put a smile on your faces.
The above picture shows us a different case from what we were talking about, firstly we
look at the red arrow. It is pointing at the EMA200 and that alone can tell us the direction of
the trend (downtrend). At the beginning of this document I mentioned that the moving
averages can be represent strong resistance/support level, take closer look in the green
rectangle it is evident that the price level reached the EMA200 several times before it broke
through (each time when it touched the ema200 we were presented with clear sell entries).
Finally when the market broke the ema200 it went up until it reached the resistance level
10541.734 (blue arrow) and it reversed again (more downward spikes). This is how you
catch spikes guys, there is no HOLY GRAIL in trading Boom and Crash 500 that gives you
signals at your disposal. One should know that you have to employ the ideas that I have
been talking about to enhance your trading and increasing your success rate.
EMA 200 should be confirming the direction of the trend use bigger time frames
such as 30min, 1hr and 4hr.
When it is Boom 500 Index RSI should be above take profit zone (strong sell region).
When you are dealing with crash 500 it will be the opposite
You enter the trade for 2mins only after a spike meaning that you take two candles
and close your trade.
Avoid opening multiple positions
Use right lot sizes for example if you open $0.10 lot size after 2mins you would have
made 20 cents. But when you have huge capital when you open $50 lot size in 2mins
you make +$150
Identify resistance and support zones.
Use proper money management
Do not force trades rather trade right setups
After we are done with the trend’s direction we then go to 1min time to enter the positions.
Let’s refer to the picture below:
When we have a spike we then jump in the trade and sell two candles then exit. Let us look
in the red rectangle there have been 5 spikes which means that 5 entries. We also look at
the EMA 200 in the 1min time frame when it is above the candlesticks we can easily sell
without fearing spikes. Black rectangle also represents entry positions but at the same time
can you see that if you try to prolong time in the trade you might have hit those long spikes.
I encourage those starting Boom and Crash 500 to use demo accounts and perfect this
3strategy. As you practice it you get to understand the market better and it means that you
can even hold trades for longer.
Since we looked at Boom 500, let us now dwell on Crash 500 and put across all necessary
information to sell crash 500. If you have been paying attention on Boom then one should not find it
difficult to understand as it is just the opposite of what we have been talking about. We use the
support and resistance and moving averages to spot entries. As usual we look in the bigger
timeframes for zones of resistance and support. Let us look at the examples below
The chart above is 30mins timeframe I only drew one support /resistance line which
enabled to take trades. Compliance with the rules were met, EM200 must be above the
candlesticks to ensure a downtrend. In the green rectangle we can see that the market was
respecting both support and resistance (moving average 200). Since it is was a downtrend,
when the market reached the EMA 200 was a clear sell and by executing that trade one was
guaranteed many spikes.
As the trend continuing downwards let us look at the red arrows , there are series of spikes
at zones of resistance. First is the red arrow at your left, then market reversed a little and
when it got to the resistance and spiked down again. There is nothing more guys treat crash
I have reiterated that once you draw your support / resistance correctly you can use the
same zones for quite a while. Let us refer to the following picture below
About 2 weeks later we revisited the chart and check the same resistance we identified has
been respected several times. Look in the purple rectangle and look at the red resistance
line (10541.734). Market has been reversing at that point and for trading spikes it would be
again perfect spot on entries. The blue double arrow shows us that in indicator 1 window
RSI indicator confirmed that indeed a spike was coming since it was in the oversold region
hence a spike was imminent. Basically that’s what we look at when trading spikes.
Finally let us look at the last example on crash 500 which will be the 1min timeframe
In conclusion this strategy needs to be revisited over and over again until you understand
how the charts move. I urge novice traders to practice more in demo accounts or to trade
with small capital such that you can learn on handling emotions.
Boom and crash 500 respects resistance and support and these assets must be traded
carefully. All the listed rules that I talked about must be strictly adhered to. When trading
boom and crash you must use right lot sizes that will not lead to loss of capital in short
period of time.
Experienced traders are quite good and they do handle their emotions well. They exactly
knows when to trade the market and when it’s better not to trade. The below are the ways
how we all can handle emotions when trading.
To sum up, understanding three important things about Forex trading psychology can make
a big difference: Taking breaks when you are too emotional, always being aware of the
uncertainty in the Forex market and practicing wise risk management. Prevention is better
than cure
Once you have got three consecutive profit trades or losing trades, it is better to take a
break. If you get three consecutive profit trades, your fourth trade may be entirely
motivated by overconfidence. If you get three consecutive losses, your fourth trade will be
driven by an extreme need to earn back the money you have lost.
Money Management Tips
Invest funds that you can afford to lose: please do not take stupid risks by investing money
that you need for daily basics. This is because it’s possible to lose all your trading capital,
and secondly, because trading with funds you live on will add extra pressure and emotional
stress to your trading, compromising your decision making abilities and increasing the
chances of making mistakes.
Keep your risk consistent: Most novice traders usually increase their positions sizes as soon
as they make profits, which is one of the best ways to get your account wiped out. Keep
your risk consistent!
Do not become over-confident and less risk-averse Just because few winning trades doesn’t
mean that the next one is going to be profitable as past results do not guarantee future
results. When you worked on your trading plan, you had to set up rules to decide about an
effective size for your positions. This is just one step in establishing a successful trading
method, now you need to stick to and follow your investment plan.
Bottom line: These tips are just the cornerstone to better manage your risk – as you
research further, you’ll find other Forex trading tools and techniques for beginners or
professional traders that you can use to improve your trading career. Before using a live
trading account, try to back-test your trading plan on a demo account until you fully
understand how my two strategies works.
I WANT TO WISH EVERYONE THE BEST IN THEIR TRADING BUSINESS AND PLEASE PRACTICE
PRACTICE AND PRACTICE UNTIL YOU GET THE CONCEPTS IN YOUR FINGERTIPS. GOD BLESS