Catching Boom and Crashe on Deriv Tradingview using Trendlines

14 Jun

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.