In 1995, Rosario Mantegna and Gene Stanley analyzed millions of records from the S & P 500 Index to calculate the return over a five-year period. General concerns about overvaluation of the stock market were blamed for the 1987 crash by assigning factors such as program trading, portfolio insurance, derivatives, prior news, and deteriorating economic indicators. In 2011, using statistical analyses of complex systems research at the New England Complex Systems Institute (NICOMSI) used the panic that led to the crash of the stock market which stemmed from the dramatic increase in investor imitation in the years leading up to the stock market crash.
One consequence of the 1987 crash was the introduction of circuit breakers and trading restrictions on the NYSE. Based on the idea that a cooling-off period would help prevent panic sales, mandatory market closures were triggered when a large, predefined market decline occurred during a trading day.
This makes it harder for brokers to play traders as the market alone is much more volatile. Those who are familiar with other trading strategies, such as scalping, are basic trading strategies which in my opinion are suitable for trading on boom and crash markets. Those who trade in synthetic indices and currency pairs and are not particularly good at fundamental analysis may find it easier to perform technical analyses and place trades profitably.
A number of traders, both experts and novices, had problems with the market structure during a boom and crash. There are many things that prevent you from getting the best results from trading in booms and crashes, such as inappropriate money management, trader psychology and strategies, but according to my research, the most important thing to do in trading is trade in physics, as it contributes 55%, money management 35% and strategies 15%. Currency pairs in a boom or crash are structured to buy and sell with spikes, planes, periods and ticks.
Trade booms and crashes can be challenging for beginners who don’t know what to do with them. If you want to trade the BOOM / CRASH index, this article is written for you. There is no rule of thumb or strategy that is 100% perfect, but I will try to give you a few tips that guide you on the way to becoming a successful dealer.
Boom 500 or Crash 500 is a synthetic index that is an aspect of foreign exchange trading. I think it is more likely you referred to the VIX Index, also known as the Greed or Fear Index.
Boom 500 / CRASH 500 is a market tick based simulation of stocks over the time of a single forward asset; it simulates 100 company shares; it has no known components, so it is difficult to study the tricks of the market and there is no 100% perfect strategy.
For example, you could trade assets like BOOM (Boom 500), BOOM 1000, CRASH (CRASH 500-1000) and observe BOOM and BOOM 500 by selling default and buying crash assets after default. The 500CRASH1000 and CRASH 500 indices are synthetic indices for all aspects of foreign exchange trading, with the 500 crash being the average of a price decline occurring every 1,000-500 ticks. In the 1000 and 500 boom indices, the average is the one that rises or falls in the series. With the BOOM-500 Index, you can trade in the area you focus the most on (Crash 500 and Crash 500-1,000) or it could be the other way around.
Sometimes it is difficult to study the tricks of the market, because there are no 100% perfect strategies. Trade boom and crash require good analysis, traders need to recognize support and resistance before entering a trade. If the structure of the market is confirmed, there will be spikes in boom, buy and fall situations, low risk-return ratio, day trading fluctuation and small lot sizes.
When we are caught in a quandary, we wait for the market to reach EMA9, and when it breaks through (no more than 3 small candles), we leave trading and apply the crash boom. During a trading boom the RSI indicator is strong above the price floor in the buying region, while it is stronger in the selling zone below the price limit in the crash 500.
For those of us who trade, we are looking for a spike that will devour more than 10 small candles that we will hold until the market reaches EMA9, if the market stops rising, we will cash in. The move we have seen with the EMA 200 candleholder means that it is on a downward trend compared to the BOOM 500, so it is not an ideal trade, but we are waiting for the market to give us the opportunity to trade.
Trading in booms and crashes, especially if you use the right batch sizes, will not result in a capital loss in the short term. The CRASH 500 has no respect for resistance and is a pillar of trade.