Deriv's Boom and Crash indices attract many beginner traders: spectacular moves, a market that never closes, small volumes within reach. They also attract a lot of false ideas, sold as "methods to catch every spike". Before choosing a strategy, you need to understand what this instrument really is.
What Boom and Crash are
They are synthetic indices: they do not track any real market. Their price is produced by a random number generator, with characteristics described by Deriv, which says it has this generator audited by an independent body. They trade 24 hours a day, weekends included, and do not react to any economic news.
- Boom: price drifts down slowly, in small steps, then from time to time makes a sudden jump upwards, the spike.
- Crash: the reverse. Price drifts up slowly and drops sharply from time to time.
The number in the name gives the average frequency of spikes. On Boom 1000, Deriv states that a spike occurs on average once every 1,000 ticks. On Boom 500, once every 500 ticks. Same principle for Crash.
"On average" does not mean "regularly"
This is the point that costs beginners the most. An average frequency is not a schedule. Deriv describes an average, not a fixed interval: nothing allows you to say a spike "must" come because the last one was 1,500 ticks ago.
Strategies of the "count the ticks since the last spike and enter when you get close to the number" type rest on this mistake. There can be 3,000 ticks without a spike, then two spikes a few ticks apart. A strategy that only works if spikes arrive "on time" eventually meets the streak that ruins it.
Three misconceptions to drop
"Just buy Boom and wait for the spike." Between two spikes, Boom goes down. While waiting for the spike, a buy position loses a little with every tick. If the spike is late, the accumulated loss can exceed the gain of the spike, especially with a stop too tight that gets hit just before.
"The spike is the trade." A spike often lasts a single candle on small timeframes. Entering during the spike means entering after the move, at the worst price.
"These indices are rigged against me." They are generated by an algorithm whose characteristics Deriv describes. What makes people lose on Boom and Crash is not manipulation: it is entry rules that assume a regularity that does not exist, and position sizes that ignore volatility.
Another way to look at the spike: a breakout
A spike is not just a price jump: it is a breakout. When it comes out of an area where price had tightened, it leaves behind a level that price may come back to test.
That is the idea behind the Spike Base Rebound strategy, taught on the channel:
- The base: price compresses over a limited number of candles, in a narrow area.
- The spike: a candle whose range clearly exceeds the average of the previous candles breaks this base.
- The retest: you do not enter during the spike. You wait for price to come back to the broken base.
- The order: the entry is taken on the retest, the stop goes on the other side of the base with a margin, and the target is a multiple of the risk.
The appeal of this approach: it does not bet on the timing of the next spike. It uses a spike that has already happened and the level it left behind, with a stop defined before entering.
What makes the difference in practice
Defining the spike precisely. "A big candle" is not enough. You need a rule: for example, a range above a certain multiple of the average of the last candles, with a minimum body. Without a numbered rule, every trader sees different spikes on the same chart.
Defining the base. How many candles at minimum and maximum? What compression? Is the base drawn on the bodies or on the wicks? These choices change the entry and stop levels.
Filtering the direction. On Boom, the underlying drift between spikes is downward. A trend filter on a higher timeframe avoids taking retests against the dominant move.
Letting zones expire. A base broken a very long time ago has lost its value. A zone needs a lifetime, beyond which it is ignored.
Setting the target as a multiple of the risk. A target of three times the risk, for example, lets the strategy be profitable even with a modest win rate. The calculation is detailed in our article on trading journal statistics.
Position sizing on Boom and Crash
Synthetic indices have their own contract sizes, minimum volumes and volatility. The lot is calculated as anywhere else, from the amount at risk and the stop distance, but with the values from the symbol specification in MetaTrader 5. Never reuse the lot of another index. The full method is in our article on position sizing.
Also think about the spread, which can be a large part of a short stop, and the swap if the position stays open for long.
What a strategy can honestly expect
- It will have losing streaks. A strategy with a distant target wins less often than it loses; that is normal as long as the expectancy stays positive.
- It will have periods without signals. Without a clean base and a clear spike, there is no trade, and that is a good thing.
- Its results on historical data describe a scope: one index, one timeframe, one set of settings. They do not automatically carry over to another index.
None of this is a flaw. It is what separates a strategy you can measure from a promise.
Automating the detection
Spotting every base, every spike and every retest by eye across several indices takes constant attention. The Boom & Crash Spike Detector applies these numbered rules: it detects the spike, marks out the base, draws the entry, stop and target levels on the retest, filters the direction on the higher timeframe and sends an alert. The robot that comes with it reproduces the same detection for execution.
The tool does not change the nature of the market: it applies rules without fatigue and without exception. Losing streaks and position sizing discipline are still up to you.
The takeaway
Boom and Crash are neither a rigged lottery nor a machine for regular spikes. They are random instruments of which only the average frequency is known. The approaches that last do not guess the next spike: they trade the structure a spike leaves behind, with a defined stop, a target as a multiple of the risk and a calculated position size.