Boom and Crash Scalping Strategy
This strategy focuses on trading based on trends and spike patterns.
Setup:
- Timeframe: Use the 1-minute (M1) timeframe for quick entries.
- Indicators:
- Moving Average (MA):
- Apply a 200 EMA (Exponential Moving Average) to identify the trend.
- Relative Strength Index (RSI):
- Period: 14.
- Levels: 70 (overbought) and 30 (oversold).
- MACD (Optional):
- Settings: Fast EMA = 12, Slow EMA = 26, Signal = 9.
Entry Rules:
For Boom (Buy):
- Trend Confirmation:
- The price should be above the 200 EMA (indicating an uptrend).
- Oversold Condition:
- RSI should be below 30 (oversold zone).
- Spike Anticipation:
- Wait for one or two small bearish candles, signaling a possible reversal.
- Buy Entry:
- Place a buy after spotting a small pullback or a flat consolidation area.
- Stop Loss:
- 5-10 points below the recent low.
- Take Profit:
- Exit after the first or second spike.
For Crash (Sell):
- Trend Confirmation:
- The price should be below the 200 EMA (indicating a downtrend).
- Overbought Condition:
- RSI should be above 70 (overbought zone).
- Spike Anticipation:
- Wait for small bullish candles signaling a reversal.
- Sell Entry:
- Place a sell after spotting a small pullback or flat consolidation area.
- Stop Loss:
- 5-10 points above the recent high.
- Take Profit:
- Exit after the first or second spike.
Risk Management:
- Use a risk-to-reward ratio of at least 1:2.
- Risk no more than 2% of your account per trade.
- Use proper lot sizes based on your account balance.
Additional Tips:
- Avoid Trading Against the Trend:
- Spikes in Boom indices are usually upward, while spikes in Crash indices are downward.
- Wait for Confirmations:
- Patience is key. Avoid entering randomly without confirmations.
- Test in Demo First:
- Backtest your strategy in a demo account to understand its strengths and weaknesses.
- Don’t Overtrade:
- Limit your trades to 3-5 per session to avoid emotional trading.
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