Catching booms and crashes on Deriv using TradingView involves utilizing trendlines to identify potential reversal points and breakouts. Here’s a short guide on how to do this:
### 1. Understanding Boom and Crash Indices - **Boom Index**: Represents a market where prices tend to spike upwards occasionally. - **Crash Index**: Represents a market where prices tend to spike downwards occasionally.
### 2. Setting Up TradingView - Open TradingView and ensure you have the Boom or Crash index loaded on your chart.
### 3. Drawing Trendlines - **Identify Highs and Lows**: Start by identifying significant highs and lows on the chart. - **Draw the Trendline**: Connect at least two significant highs for a downtrend line and at least two significant lows for an uptrend line.
### 4. Analyzing Trendline Breaks - **Downtrend Breakout (Boom Index)**: Look for points where the price breaks above a downtrend line. This can indicate a potential upward boom. - **Uptrend Breakout (Crash Index)**: Look for points where the price breaks below an uptrend line. This can indicate a potential downward crash.
### 5. Confirming the Breakout - **Volume**: Higher volume during the breakout can confirm the validity of the trendline break. - **Candlestick Patterns**: Look for reversal candlestick patterns near the trendline to increase the accuracy of your prediction.
### 6. Risk Management - **Stop-Loss**: Set a stop-loss slightly below the breakout point for booms and slightly above for crashes. - **Take-Profit**: Determine your target based on previous highs/lows or use a risk-reward ratio.
### Example: 1. **Boom Index**: - Identify recent highs and draw a downtrend line. - Wait for a candlestick to close above the trendline. - Confirm with volume and possibly a bullish candlestick pattern. - Enter a buy trade with a stop-loss below the trendline and a take-profit at a previous resistance level.
2. **Crash Index**: - Identify recent lows and draw an uptrend line. - Wait for a candlestick to close below the trendline. - Confirm with volume and possibly a bearish candlestick pattern. - Enter a sell trade with a stop-loss above the trendline and a take-profit at a previous support level.
By carefully analyzing trendlines and confirming breakouts with additional indicators, you can effectively catch booms and crashes on Deriv's Boom and Crash indices using TradingView.